Why Netflix failed with Qwikster

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Why Netflix failed with Qwikster, a presentation done for an Interactive Media Studies course at Miami University.

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Why Netflix failed with Qwikster

  1. 1. Netflix QwiksterIMS 419 Surayya Hasan
  2. 2. In July of 2011 Netflix announced a price hike for their combined DVD and streaming service. The previously $9.99/mo subscription was now $15.99/mo with the assumption that more users would opt for the new streaming only plan priced at $8.99/mo due to the rising prices of postage. Netflix was ready to move toward being a streaming only service, however, their customers were not.
  3. 3. Enter Qwikster: a DVD by mail only service that would also include video games. This was in response to the price hike after realizing that pricing and marketing for mail orders and streaming were completely different. Qwikster and Netflix would have separate websites and credit card chargers. The reason for not integrating the two was because Reed Hastings, Netflix chief executive, felt that they would be able to give each service equal attention to improve both services.
  4. 4. Qwikster didn’t work for a variety of reasons: The name change, the website split, the price hike,the assumptions that mail orders were being put on the backburner in order to focus on something that wasn’t quite there yet (streaming). Qwikster would force Netflix users with combined streaming and DVD subscriptions to create separate accounts in order to manage them. The websites wouldn’t be combined in anyway, which would mean separate bills, separate ratings and separate preferences for Netflix and Qwikster, despite being owned by the same company.
  5. 5. Qwikster may have been designed to fail, but the idea itself wasn’t completely destined to fail. With a few minor changes and usability considerations, Qwikster might have been the hit Hastings was looking for.
  6. 6. Qwikster: The Name Where they went wrong: Qwikster, overall, is a stupid name. It’s incredibly easy to misspell and its common misspellings, ‘Quickster, Quikster, and Qwickster’ don’t redirect you to Qwikster. New users may not recognize that Qwikster and Netflix are owned by the same company, which could cause users to choose a completely different mailing service all together, losing Netflix potentially millions of customers. What they should have done: Netflix has been a recognizable name since 1997. In order to keep that brand in tact and keep customers at ease with the change, Netflix could have branched their company into two subcompanies called Netflix Streaming and Netflix DVD, two names consumers probably used unofficially anyway.
  7. 7. Qwikster: Separate Domains Where they went wrong: Qwikster would have it’s own website that wouldn’t be linked to Netflix in anyway. Users would have two separate accounts with two separate charges on their credit cards. All of those ratings and preferences on Netflix would have to be recreated on Qwikster, despite Netflix already having a record of that information. What they should have done: Ideally Netflix should have kept the same website for both services, but if a separate website was found necessary, they should have made the transition for users as smooth as possible by allowing them to sign in with their Netflix usernames and have their preferences transfer between the two websites seamlessly.
  8. 8. Qwikster: If it isn’t broken… Where they went wrong: The Netflix services as they were, were more user friendly than what Qwikster proposed. When they made the decision to split, Netflix still had a much bigger DVD library than streaming library. Users could see which titles were available for DVD and which were available for streaming. With the services separated, if a user was unable to stream their title, they would have to make a Qwikster account in order to get that title on DVD. What they should have done: If making the two websites seamless wasn’t possible, they could have used Netflix and Qwikster to promote each other. If a title wasn’t available on Netflix for streaming, an ‘on DVD’ button that linked you to Qwikster and vise versa would have saved the hassle of having to search both websites yourself.
  9. 9. Qwikster: Video Games? Where they went wrong: Qwikster would not only offer DVDs but also video game titles for Wii, Playstation 3, and Xbox 360. Sounds like a great idea, except the video games would be an optional upgrade. You wouldn’t get both DVDs and video games upon joining Qwikster. What they should have done: Both Redbox and GameFly are two popular companies that also offer video game rentals without having to go through a name change. If users already recognize these companies and are loyal to these brands, what incentive would they have to rent from Qwikster, especially when the service would be an add on. Ditch the video games.
  10. 10. Qwikster: Social Media Marketing Where they went wrong: The Twitter handle for Qwikster was already owned by Jason Castillo, whose feed was filled with tweets promoting his love for marijuana and his profile picture was of a pot smoking elmo. His account was essentially a marketing nightmare. Twitter doesn’t allow the sales of handles as it goes against their policies. Qwikster eventually obtained @QwiksterTweets, but as a 13 character handle it didn’t leave much room for users to tweet. And it isn’t unlikely that users would have tweeted @Qwikster anyway, thinking they were the company. What they should have done: While Netflix was able to get the domain name for the Qwikster website, they didn’t do a search to make sure they were able to obtain their name everywhere. Even if they had, they would have needed to register those names before announcing it in order to prevent people from grabbing those names only to try and sell them right back for money. Even if they didn’t intend to use every social media outlet, grabbing those names would help keep anyone from ruining their brand.
  11. 11. Qwikster: Pacifying the price hike Where they went wrong: Qwikster was announced right on the heels of a price hike for their combined services, which Netflix subscribers were very vocal about. Qwikster wasn’t a solution subscribers were looking for. Qwikster wasn’t going to lower those prices for consumers, they would just have to pay for the services separately. What they should have done: Netflix would have been better off announcing the price hike with a price and service split, not with a company split. I think they would have been able to receive less backlash and would have been able to retain most of their customers. Allowing customers to choose between three plans would have been a much simpler solution.
  12. 12. Qwikster: Discrepancy in Title Availability Where they went wrong: Netflix has been around since 1997, which naturally makes their selection of DVDs bigger than their selection of streaming titles. With the announcement of the split, DVDs was still the biggest seller for Netflix and their streaming hadn’t quite caught up yet. What they should have done: In order to make the company split worth it, Netflix would have needed to make their streaming service equal to their DVD service with the same number of titles and more titles that were available both on DVD and streaming. Netflix wasn’t ready to separate their services, and their customers weren’t either.

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