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Netflix Kills Qwikster; Price Hike Lives On

Netflix has backed off its unpopular plan to split its service into two offerings — one for streaming video, and one for sending DVDs by mail. CEO Reed Hastings is seen gesturing in this file photo. i i

Netflix has backed off its unpopular plan to split its service into two offerings — one for streaming video, and one for sending DVDs by mail. CEO Reed Hastings is seen gesturing in this file photo.

Paul Sakuma/AP hide caption

itoggle caption Paul Sakuma/AP
Netflix has backed off its unpopular plan to split its service into two offerings — one for streaming video, and one for sending DVDs by mail. CEO Reed Hastings is seen gesturing in this file photo.

Netflix has backed off its unpopular plan to split its service into two offerings — one for streaming video, and one for sending DVDs by mail. CEO Reed Hastings is seen gesturing in this file photo.

Paul Sakuma/AP

Bowing to customers' anger and confusion over its move to divide its streaming and DVD video offerings, Netflix is reversing itself, snuffing the plan to offer DVDs by mail via a new service called "Qwikster." News of the backpedaling move was published on the company's blog early Monday.

Netflix had announced the separation in July, when it also outlined a price increase for customers who prefer to watch videos on the company's streaming service as well as receive DVDs by mail. The base price for the two combined services effectively went up from $10 to $16 — a rate hike that remains in place.

The decision to split the services was wildly unpopular among Netflix subscribers. Reacting to the announcement on Facebook, a customer named Willie Williams summed it up in a way that 1,877 people agreed with:

Individually your DVD and steaming services do not offer enough to justify their expense. As a bundled service they supplement each other and provide the value that made Netflix wonderful. DVDs allowed you to view newer releases in a fairly timely manner. Streaming allowed for viewing of the older catalog of movies that come up when you think of it but might not be worth waiting for to arrive in the mail....

By separating these services I fear you are weakening Netflix as a service and subsequently the brand. Together these services made Netflix a success, separated you lack the availability and pricing of your competitors.

For whatever reason, those insights were not available in the offices of Netflix — and when the company said it would be branding the new DVD service as Qwikster, the plan was met with derision. Within days, the term "Qwikster" began to sound like the 2010 word for "New Coke" — Coca-Cola's ill-fated replacement for its flagship product.

If you're curious about similar corporate missteps — like Crystal Pepsi, or Apple's "Lisa" computer — you can see a short list, and view vintage TV ads, at the Grow Think website. And here at NPR, we created this slideshow of bold, and in some cases misguided, attempts at "re-branding":

  • 2011: Facebook Insitutes New Round Of Changes To User Pages. The changes included a real-time ticker and new ways to personalize your page. The Facebook blog says of the changes, the "News feed will act more like your own personal newspaper." The company also announced new partnerships for music, movies and TV. You'll be able to see which movies and TV your friends are watching, what mus...
    Hide caption
    2011: Facebook Insitutes New Round Of Changes To User Pages. The changes included a real-time ticker and new ways to personalize your page. The Facebook blog says of the changes, the "News feed will act more like your own personal newspaper." The company also announced new partnerships for music, movies and TV. You'll be able to see which movies and TV your friends are watching, what music they're listening to and what news items they're reading.
    Paul Sakuma/AP
  • 2011: Netflix Separates Its DVD, Streaming Business. Internet video streaming has become a priority for Netflix. As a result, it has raised prices by as much as 60 percent. Recently, the company announced it will break off its DVD mail service as Qwikster. Netflix CEO Reed Hastings apologized for the way the company communicated earlier price changes but not for the hike itself. I decide...
    Hide caption
    2011: Netflix Separates Its DVD, Streaming Business. Internet video streaming has become a priority for Netflix. As a result, it has raised prices by as much as 60 percent. Recently, the company announced it will break off its DVD mail service as Qwikster. Netflix CEO Reed Hastings apologized for the way the company communicated earlier price changes but not for the hike itself. I decided to simplify to just streaming and walk to Red Box for more recent DVDs. And if Netflix doesn't get more current releases quickly, I won't be streaming anymore either.
  • 1985: The Coca-Cola Co. Replaces The Original Formula For Its Soft Drink. The consumer backlash was so great that Coke was forced to bring back its original recipe and brand it Coca-Cola Classic. Many people believe the change was a marketing ploy because the company made millions off changing back.
    Hide caption
    1985: The Coca-Cola Co. Replaces The Original Formula For Its Soft Drink. The consumer backlash was so great that Coke was forced to bring back its original recipe and brand it Coca-Cola Classic. Many people believe the change was a marketing ploy because the company made millions off changing back.
    Marty Lederhandler/AP
  • 2006: Sesame Street Has Cookie Monster Eat Fruits And Vegetables.  Sesame Street decided to start airing Healthy Habits For Life segments. Cookie Monster explained that his new philosophy was that cookies were "a sometimes food."  PBS Viewer Services responded to viewers' concerns with an email saying the show had no plans get rid of Cookie Monster, and he would continue to obsess over t...
    Hide caption
    2006: Sesame Street Has Cookie Monster Eat Fruits And Vegetables. Sesame Street decided to start airing Healthy Habits For Life segments. Cookie Monster explained that his new philosophy was that cookies were "a sometimes food." PBS Viewer Services responded to viewers' concerns with an email saying the show had no plans get rid of Cookie Monster, and he would continue to obsess over the cookie, but would also eat fruits and vegetables. It's great to promote healthful eating habits, but can't Grover or Ernie do it?
    Sesame Workshop, Richard Termine/AP
  • 2010: The Gap Decides To Change Its Logo.  According to company spokesperson Louise Calagy, the new logo would be "classic, American design to modern, sexy, cool." A week later, The Associated Press reported that the casual wear chain was reverting to its original logo. The new logo irritated consumers, who complained about it online. Gap North Amercam President Marka Hansen said Gap did...
    Hide caption
    2010: The Gap Decides To Change Its Logo. According to company spokesperson Louise Calagy, the new logo would be "classic, American design to modern, sexy, cool." A week later, The Associated Press reported that the casual wear chain was reverting to its original logo. The new logo irritated consumers, who complained about it online. Gap North Amercam President Marka Hansen said Gap didn't handle the change correctly and missed an opportunity to have shoppers offer input.
  • 2009: Tropicana Debuts New Packaging.  Owing to a huge customer backlash, the company was forced to return to its original packaging. According to Neil Campbell, the president of Tropicana North America: "We underestimated the deep emotional bond [of the brand's original logo]." Unfortunately, this lack of understanding led to my father-in-law's breaking up with his girlfriend over the c...
    Hide caption
    2009: Tropicana Debuts New Packaging. Owing to a huge customer backlash, the company was forced to return to its original packaging. According to Neil Campbell, the president of Tropicana North America: "We underestimated the deep emotional bond [of the brand's original logo]." Unfortunately, this lack of understanding led to my father-in-law's breaking up with his girlfriend over the changes to the orange juice container. Seriously, it was the straw that broke the camel's back.
  • 1999: Actress Kerri Russell Cuts Her Trademark Long, Curly Hair.  Russell starred in the series Felicity. She went along with show producers' idea to cut her hair after her character had a rough breakup. The show's ratings declined and never recovered, and whether the show's moving to Sundays or the haircut was to blame was never determined. TV Guide ranked the haircut as N...
    Hide caption
    1999: Actress Kerri Russell Cuts Her Trademark Long, Curly Hair. Russell starred in the series Felicity. She went along with show producers' idea to cut her hair after her character had a rough breakup. The show's ratings declined and never recovered, and whether the show's moving to Sundays or the haircut was to blame was never determined. TV Guide ranked the haircut as No. 19 on its "25 Biggest TV Blunders" list.
  • 2011: George Lucas Releases A Blu-ray Box Set Of The Six Star Wars Films.  Many fans are urging a boycott of the set because Lucas made unwanted changes, including having Darth Vader scream "Noooo!" when he kills Emperor Palpatine. One review on Amazon.com says: "Adding Vader's 'Nooo!' is just going too far." As someone who missed the key scene in the movie theater when Darth Vader told ...
    Hide caption
    2011: George Lucas Releases A Blu-ray Box Set Of The Six Star Wars Films. Many fans are urging a boycott of the set because Lucas made unwanted changes, including having Darth Vader scream "Noooo!" when he kills Emperor Palpatine. One review on Amazon.com says: "Adding Vader's 'Nooo!' is just going too far." As someone who missed the key scene in the movie theater when Darth Vader told Luke Skywalker he was his father because I was 7 and had to go to the bathroom, I can relate ... a little.
    Kent Phillips/AP
  • 2011: University Of Maryland Debuts Its New Football Uniforms. According to the Two-Way's Eyder Peralta, the unveiling was met with a lot of disappointment. Some of the Twitter reviews from sports celebrities: "OH GOSH! Maryland uniforms #Ewwwwww!" (NBA star LeBron James) and "Man university of Marylands football team have some ugly jerseys lol" (soccer star Freddy Adu). If you want a cl...
    Hide caption
    2011: University Of Maryland Debuts Its New Football Uniforms. According to the Two-Way's Eyder Peralta, the unveiling was met with a lot of disappointment. Some of the Twitter reviews from sports celebrities: "OH GOSH! Maryland uniforms #Ewwwwww!" (NBA star LeBron James) and "Man university of Marylands football team have some ugly jerseys lol" (soccer star Freddy Adu). If you want a closer look, the university is still auctioining off the matching gloves and cleats from this ensemble.
    Rob Carr/Getty Images

1 of 9

View slideshow i

Netflix customers greeted the "Qwikster" news by keeping their promises to cancel their memberships altogether, turning to rival video streaming services from Amazon, Hulu and others. And by the time the mid-September switch arrived, Netflix announced that it had lost an estimated 1 million subscribers.

Two attempts at mitigating the damage — an admission by CEO Reed Hastings that Netflix had failed to communicate the changes well, and the renaming of its DVD-by-mail service as Qwikster — failed to appease customers.

And less than 1 month after the new plans were instituted, Hastings announced that Netflix would abandon the plan to separate, in a blog post that read, in part:

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 that news is sure to make some customers happy, the new prices that were announced in July will remain in effect. Monday, Hastings reiterated that the price hike of as much as 60 percent was "necessary."

 A screenshot shows Qwikster.com, the ill-fated DVD mailing service that Netflix discontinued Monday. i i

A screenshot shows Qwikster.com, the ill-fated DVD mailing service that Netflix discontinued Monday.

AP hide caption

itoggle caption AP
 A screenshot shows Qwikster.com, the ill-fated DVD mailing service that Netflix discontinued Monday.

A screenshot shows Qwikster.com, the ill-fated DVD mailing service that Netflix discontinued Monday.

AP

In addition to the loss of subscribers, Netflix has seen its shares lose more than half their value since July. After news spread Monday that Qwikster would soon be part of Netflix's past, the stock "rose $8.63, or 7.4 percent, to $125.84 in morning trading after rising as high as $128.50," according to the AP.

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