The Netflix year of bad PR continued today. After the company had announced that it would make its already upset customers go to two websites. One for DVD and one for streaming movies it backtracked today. Netflix won’t be spinning off DVD-by-mail rentals into a new company called Qwikster.
This seems to be just a cosmetic stunt since internally the separation still be under way. The press release below does not say anything about the video game option as of yet. Therefore Gamefly can still continue to relax a little. While not splitting the company is a good mood. It should have never been done in the first place. The continued bad move after bad move followed by the CEO Reed Hastings handing customers yet another apology seems more like the boy who cried wolf. Stock holders may be speculating about the company’s true plans. At this point even Netflix might not know its own plans.
Since all the drama over price Netflix has announced a few new content deals with Discovery and AMC. Blockbuster and Amazon should this year as the year where playing David might work out in their favor. The Netflix Q3 earnings report is due October 24th. We think the stock might be headed lower for price and the bad PR will continue.
DVDs Will Be Staying At Netflix.com
LOS GATOS, Calif., October 10, 2011 – Netflix Inc. (Nasdaq: NFLX) today said it will not rename its DVD-by-mail service and that its US members will continue to go to the Netflix website for both unlimited streaming and unlimited DVDs.
Netflix said in a Sept. 18 blog post that its DVD by mail service would operate at Qwikster.com. Instead, U.S. members will continue to use one website, one account and one password for their movie and TV watching enjoyment under the Netflix brand.
“Consumers value the simplicity Netflix has always offered and we respect that,” said Netflix co-founder and CEO Reed Hastings. “There is a difference between moving quickly — which Netflix has done very well for years — and moving too fast, which is what we did in this case.”
Netflix today informed its U.S. members in personal emails and a post on the Netflix Blog on www.netflix.com