Netflix's Epic Meltdown Reaches New Heights


Remember all that business about Netflix splitting into two companies -- one which would retain the streaming video service and the name and a second, called Qwikster, that would still send you DVDs by mail? Yeah ... about that. Um, just kidding. In an email sent to its subscribers on Monday morning, Netflix announced that it was scrapping plans to split the two services apart. Instead, Netflix will remain as it always has been. No price increases. No Qwikster. Sorry about all that, folks.

Here's the body of the email that hit subscriber inboxes this morning:

It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs.

This means no change: one website, one account, one password … in other words, no Qwikster.

While the July price change was necessary, we are now done with price changes.

We're constantly improving our streaming selection. We've recently added hundreds of movies from Paramount, Sony, Universal, Fox, Warner Bros., Lionsgate, MGM and Miramax. Plus, in the last couple of weeks alone, we've added over 3,500 TV episodes from ABC, NBC, FOX, CBS, USA, E!, Nickelodeon, Disney Channel, ABC Family, Discovery Channel, TLC, SyFy, A&E, History, and PBS.

We value you as a member, and we are committed to making Netflix the best place to get your movies & TV shows.

Mercy. It's worth noting that this is exactly what I said Netflix should do back when it announced that Qwikster would be a, um, thing. Why piss off the people who were sticking by you through the price increases? Why get rid of the streaming/by-mail queue integration? It just didn't make any sense, and if I could see it -- someone with no business background at all -- why couldn't the leadership there?

Some of the panic is understandable. The streaming world is a big, scary place right now. There's lots of uncertainty about where all this is headed and forces bigger than Netflix looming. But you know what, that's not an excuse. Good management is supposed to keep the rudder steady through stormy seas, not flip out and load and unload the whole crew into a leaky lifeboat 47 times as the ship sinks.

If there are people out there like me -- folks who were loyal to Netflix even as they increased prices but have lost faith in them over the last month -- I expect this move won't do a whole heck of a lot to get the company back in people's good graces. I've already made plans to drop the by-mail service, and I don't plan to change them even though Netflix is trying to hit the reset button.

I'd say I can't remember a company being managed this ridiculously before -- with unsteady leadership and constantly changing plans -- but I worked for AOL for almost six years. If Netflix isn't careful, they might be following the AOL path a little too closely in the coming years -- going from innovation to irrelevance.