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

1. Netflix QwiksterIMS 419 Surayya Hasan

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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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.