Charles Edison

"Economics, politics, and personalities are often inseparable." - Charles Edison

Tuesday, October 11, 2011

Netflix losing its grip on the DVD rental industry?

CNN reported that earlier today Netflix released that it was cancelling its plan to split its services into to separate companies. This plan, originally released Sept. 18 would have customers use Netflix for instant streaming and Qwikster for mailed movie rentals. This would allow customers to choose between the two businesses or both for their movie needs. Upon releasing the statement however the online community flared with hostility towards the choice as well as Netflix all together. Many customers complained of being happy with the system already in place as well as their still unsubsided anger over the price increase. These many factors led to the online outcry that forced the company to reconsider. It was a very risky idea issued during a very risky time for the company and it backfired substancially. Netflix no doubt lost customers to their faulty timing and business planning.


Smith said...

Do you think Netflix can recover from this? How is this effecting supply and demand for online DVD orders?

Victor L said...

Netflix needs to maintain its status as the head of internet DVD sales. I believe they can recover but they need to maitain their current system. The present friction was caused by trying to fix what wasn't broken. The Netflix system was a good design at a good price. The price increase was hurtful to their community of fans but was still tolerable. The then sudden change of the design that led to another price increase was too much. These announcements lower demand while keeping supply the same. This causes a surplus and is very hurtful to the company.