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Netflix about to make a big mistake.
netflix ^ | September 19, 2012 | -Reed Hastings, Co-Founder and CEO, Netflix

Posted on 09/19/2011 5:56:25 AM PDT by Usagi_yo

On Mon, Sep 19, 2011 at 7:49 AM, Reed Hastings, Co-Founder and CEO of Netflix wrote:

Dear Chris,

I messed up. I owe you an explanation.

It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming and the price changes. That was certainly not our intent, and I offer my sincere apology. Let me explain what we are doing.

For the past five years, my greatest fear at Netflix has been that we wouldn't make the leap from success in DVDs to success in streaming. Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us). So we moved quickly into streaming, but I should have personally given you a full explanation of why we are splitting the services and thereby increasing prices. It wouldn’t have changed the price increase, but it would have been the right thing to do.

So here is what we are doing and why.

Many members love our DVD service, as I do, because nearly every movie ever made is published on DVD. DVD is a great option for those who want the huge and comprehensive selection of movies.

I also love our streaming service because it is integrated into my TV, and I can watch anytime I want. The benefits of our streaming service are really quite different from the benefits of DVD by mail. We need to focus on rapid improvement as streaming technology and the market evolves, without maintaining compatibility with our DVD by mail service.

So we realized that streaming and DVD by mail are really becoming two different businesses, with very different cost structures, that need to be marketed differently, and we need to let each grow and operate independently.

It’s hard to write this after over 10 years of mailing DVDs with pride, but we think it is necessary: In a few weeks, we will rename our DVD by mail service to “Qwikster”. We chose the name Qwikster because it refers to quick delivery. We will keep the name “Netflix” for streaming.

Qwikster will be the same website and DVD service that everyone is used to. It is just a new name, and DVD members will go to qwikster.com to access their DVD queues and choose movies. One improvement we will make at launch is to add a video games upgrade option, similar to our upgrade option for Blu-ray, for those who want to rent Wii, PS3 and Xbox 360 games. Members have been asking for video games for many years, but now that DVD by mail has its own team, we are finally getting it done. Other improvements will follow. A negative of the renaming and separation is that the Qwikster.com and Netflix.com websites will not be integrated.

There are no pricing changes (we’re done with that!). If you subscribe to both services you will have two entries on your credit card statement, one for Qwikster and one for Netflix. The total will be the same as your current charges. We will let you know in a few weeks when the Qwikster.com website is up and ready.

For me the Netflix red envelope has always been a source of joy. The new envelope is still that lovely red, but now it will have a Qwikster logo. I know that logo will grow on me over time, but still, it is hard. I imagine it will be similar for many of you.

I want to acknowledge and thank you for sticking with us, and to apologize again to those members, both current and former, who felt we treated them thoughtlessly.

Both the Qwikster and Netflix teams will work hard to regain your trust. We know it will not be overnight. Actions speak louder than words. But words help people to understand actions.

Respectfully yours,

-Reed Hastings, Co-Founder and CEO, Netflix

p.s. I have a slightly longer explanation along with a video posted on our blog, where you can also post comments


TOPICS: Business/Economy; Computers/Internet; Miscellaneous; Music/Entertainment; TV/Movies
KEYWORDS: dvd; netflix
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The're going to take a well known and respected brand name and change it to a misspelled gimmicky name like Qwikster?

Dear netflix board of directors. Please call up your CEO Reed Hastings and fire him for being dumb.

1 posted on 09/19/2011 5:56:28 AM PDT by Usagi_yo
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To: Usagi_yo

This is what happens when one supports Barbara Boxer.


2 posted on 09/19/2011 5:59:32 AM PDT by netmilsmom (Happiness is a choice)
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To: Usagi_yo

Quickster????

You are right... they about to make a BIG mistake!

DUDE!... you order the DVDs ON THE NET!!! Why throw away one of the primary keys to your success????

2 different businesses??? that means 2 different accounts.

I for one will have only 1 account!... and that may mean you will lose both of mine.


3 posted on 09/19/2011 6:01:56 AM PDT by Safrguns
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To: Usagi_yo

I also hate the name “Qwikster” but I respect the strategy. The DVD-by-mail system is dead man walking. Broadband streaming is the future. This should allow netflix to focus on what’s growing and be able to cannibalize their own business model before someone else does. See Blockbuster.


4 posted on 09/19/2011 6:02:33 AM PDT by delapaz
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To: netmilsmom

That’s funny because Barbara “Check Kiter” Boxer is pretty dumb and the fact that she keeps on getting re-elected makes me believe that a majority of California voters are equally dumb.


5 posted on 09/19/2011 6:04:08 AM PDT by Usagi_yo
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To: Safrguns

Look at their stock since their announcement. No way I’m keeping both stream and dvd ... they priced themselves right out of the market, too bad. Amazing to see these “libs” trying to run a company. AOL buying Huffington ... (Stupid?) ... any IDIOT could know that wouldn’t work. Same kind of people running the admin economic team. All “ideas” and no results ... kind of like the global warming thing.


6 posted on 09/19/2011 6:05:35 AM PDT by ThePatriotsFlag
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To: Usagi_yo

Yup.


7 posted on 09/19/2011 6:06:33 AM PDT by netmilsmom (Happiness is a choice)
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To: Usagi_yo

He apologized, but the price hike is still in effect?


8 posted on 09/19/2011 6:07:00 AM PDT by Krankor
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To: Usagi_yo

http://www.campaignmoney.com/political/contributions/reed-hastings.asp?cycle=08

Hastings, Reed
SANTA CRUZ, CA
95060 Netflix/Executive/Mgmt $3,000 10/20/2008 P PEOPLE FOR THE AMERICAN WAY VOTERS ALLIANCE
Hastings, Reed Mr.
SANTA CRUZ, CA
95060 Netflix/CEO $28,500 08/22/2008 P OBAMA VICTORY FUND - Democrat
HASTINGS, REED
SANTA CRUZ, CA
95060 NETFLIX.COM/PRESIDENT & CEO $28,500 11/14/2007 P DEMOCRATIC SENATORIAL CAMPAIGN COMMITTEE - Democrat
Hastings, Reed
SANTA CRUZ, CA
95060 Netflix Inc $2,100 12/11/2006 P CHRIS DODD FOR PRESIDENT INC - Democrat


9 posted on 09/19/2011 6:07:11 AM PDT by listenhillary (Look your representatives in the eye and ask if they intend to pay off the debt. They will look away)
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To: Usagi_yo

Diluting your brand is never a good idea. And if you do don’t rebrand your original product.


10 posted on 09/19/2011 6:07:11 AM PDT by Mike Darancette (Psalm 109:8)
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To: delapaz

Well, if they simply had to change the name, it should be something coherent like Netflix by Mail.

I believe most parts of the U.S are not infrastructured enough to sustain streaming video for the majority of their customers.


11 posted on 09/19/2011 6:07:51 AM PDT by Usagi_yo
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To: delapaz

>>This should allow netflix to focus on what’s growing and be able to cannibalize their own business model before someone else does<<

Or go out of business because they can’t properly communicate with their subscribers.

Anyone can stream movies.


12 posted on 09/19/2011 6:08:33 AM PDT by netmilsmom (Happiness is a choice)
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To: Krankor

Just cancelled the DVD supply portion...going to streaming only for a savings of $16 per month...or a decrease in revenue to them of 60%.


13 posted on 09/19/2011 6:08:37 AM PDT by GRRRRR (He'll NEVER be my President, FUBO! Treason is the Reason! Impeach the Kenyan)
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To: Usagi_yo

Ok...I didn’t know this. My husband loves the dvd’s and I like the streaming. Maybe I’m mixed up but will we still get both? WHY can’t they leave everything alone????


14 posted on 09/19/2011 6:09:00 AM PDT by Cricket24 (Proud to be a CONSERVATIVE WOMAN!!!!!!!)
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To: listenhillary

http://www.campaignmoney.com/political/contributions/reed-hastings.asp?cycle=10

HASTINGS, REED
SANTA CRUZ, CA
95060 $-2,400 11/18/2010 G CITIZENS FOR ALAN KHAZEI - Democrat
HASTINGS, REED
SANTA CRUZ, CA
95060 $-2,400 11/18/2010 G CITIZENS FOR ALAN KHAZEI - Democrat
Hastings, Reed
SANTA CRUZ, CA
95060 Netflix $10,000 10/27/2010 P DEMOCRATIC STATE CENTRAL COMMITTEE OF CA - FEDERAL - Democrat
Hastings, Reed
SANTA CRUZ, CA
95060 Netflix/CEO $30,000 04/22/2010 P CALIFORNIA VICTORY 2010 - Democrat
HASTINGS, REED
SANTA CRUZ, CA
95060 $-2,400 01/17/2010 G CITIZENS FOR ALAN KHAZEI - Democrat
HASTINGS, REED
SANTA CRUZ, CA
95060 NETFLIX/EXECUTIVE $2,400 11/02/2009 G CITIZENS FOR ALAN KHAZEI - Democrat
HASTINGS, REED
SANTA CRUZ, CA
95060 NETFLIX/EXECUTIVE $2,400 11/01/2009 CITIZENS FOR ALAN KHAZEI - Democrat
HASTINGS, REED
SANTA CRUZ, CA
95060 NETFLIX/CEO $2,400 09/09/2009 P FRIENDS OF BARBARA BOXER - Democrat
HASTINGS, REED
SANTA CRUZ, CA
95060 NETFLIX/CEO $2,400 09/09/2009 G FRIENDS OF BARBARA BOXER - Democrat


15 posted on 09/19/2011 6:09:02 AM PDT by listenhillary (Look your representatives in the eye and ask if they intend to pay off the debt. They will look away)
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To: Usagi_yo
Most companies that are great at something – like AOL dialup or Borders bookstores

Um, dude, Borders is going OUT OF BUSINESS. Oh, and we won't forget your snarky comments about Americans being self absorbed when asked how we "American's" might feel about a discount you were giving Canadians. Netflix CEO: American's self absorbed

16 posted on 09/19/2011 6:12:49 AM PDT by JaguarXKE
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To: delapaz

Broadband streaming is only viable if you stream content people actually WANT to watch.

Chinese movies and re-runs of old tv shows aren’t going to cut it.


17 posted on 09/19/2011 6:15:10 AM PDT by Dead Corpse (For those who fight for it, life has a flavor the sheltered will never know.)
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To: Cricket24

Just checked my email and I got the same email as above!


18 posted on 09/19/2011 6:15:18 AM PDT by Cricket24 (Proud to be a CONSERVATIVE WOMAN!!!!!!!)
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To: listenhillary

I checked my billing and realized that my $16.99 bill in January 2011 is now $23.49.

I am dropping these guys as soon as cable gets hooked up (Which will hopefully be this week.) I was a subscriber for over 8 years but am not going to accept a 36% price increase in one year.


19 posted on 09/19/2011 6:16:30 AM PDT by american_ranger
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To: Usagi_yo; All

I got over the pricing change, but NOW I have to go to different websites to access my DVD and streaming stuff?

That makes me mad.

I would have already left if it were not for some old TV shows I want on streaming. Just ridiculous.

They can have separate teams and still be on the same website and be called the same.


20 posted on 09/19/2011 6:16:52 AM PDT by rwfromkansas ("Carve your name on hearts, not marble." - C.H. Spurgeon)
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To: Dead Corpse

I like watching the old TV shows. That said, I don’t watch them much. And it ticks me off they have so few new movies.


21 posted on 09/19/2011 6:19:29 AM PDT by rwfromkansas ("Carve your name on hearts, not marble." - C.H. Spurgeon)
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To: Usagi_yo

In July I received their notice of the separation of business and the price increase. I told a friend of mine who has their stock that the company just made a huge mistake and the stock was about to tumble. He didn’t believe me. He thought I was just pouting.

But, I cancelled my membership, it was just priced out of my budget, and have since learned that many others have cancelled theirs. I sure hope my friend sold his stock early.


22 posted on 09/19/2011 6:21:35 AM PDT by Jemian
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To: Usagi_yo

Why can’t a business raise prices? Why apologize for it? If it costs too many customers - then reverse it. But why look foolish and weak with an apology, and trash your own brand name?


23 posted on 09/19/2011 6:21:44 AM PDT by montag813 (http://www.StandWithArizona.com)
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To: Usagi_yo

Does netflix have a decent HD selection in streaming yet? Last time I checked it didn’t appear that they had much.


24 posted on 09/19/2011 6:21:50 AM PDT by RockinRight (Carter Obama and Reagan the nation!)
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To: Safrguns

Here is my first impression of the new name:

Quickster => Quickstar => Amway

People who throw away successful branding are insane.


25 posted on 09/19/2011 6:21:57 AM PDT by Suz in AZ
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To: Usagi_yo

What a terrible idea!

If I want to watch something, I do via streaming if that’s available, and put it on the dvd queue if not.

How is it helping me to make that two separate services, two separate web sites??


26 posted on 09/19/2011 6:21:57 AM PDT by NRPM (We have to come to terms with the fact that governments have made promises they will not keep.)
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To: delapaz

Separating the two branches is the first step toward winding down or selling off the old DVD delivery system.

Also, it would allow a bankruptcy in the old branch without it affecting the new branch.

There are too many other streaming only competitors cropping up out there. In order to survive, Netflix has had to make some bold, albeit unpopular decisions.


27 posted on 09/19/2011 6:25:00 AM PDT by randita (Obama - chains you can bereave in.)
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To: Usagi_yo

Fed up with Netflix DVD crap, I dropped that and will retain only the live streaming aspect.


28 posted on 09/19/2011 6:26:42 AM PDT by Sea Parrot (Democrats creation of the entitlement class will prove out to be their very own Frankenstein monster)
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To: Usagi_yo

I just dropped the DVD portion of my account - no way in hell I’m maintaining two queues.

This is where they’re screwing up. No one wants to do the same searches twice.

People will drop one account or the other. Sure there will be some who keep both, but, in the end, this will be a net loss for Netflix.

And new sign ups? Who will sign up twice. This is a no win situation, for Netflix and for their customers.

Dumb.. just dumb..


29 posted on 09/19/2011 6:26:42 AM PDT by tje
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To: rwfromkansas

With so many sites streaming movies and TV shows for free, it was going to be hard for Netflix anyway.


30 posted on 09/19/2011 6:26:42 AM PDT by icwhatudo ("laws requiring compulsory abortion could be sustained under the constitution"-Obama official)
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To: montag813

>>Why can’t a business raise prices?<<

They can, however if they want to keep customers, they give an explanation and treat their customers with respect. Netflix dropped a bomb on customers that had been loyal for years.

Just as a business can raise prices, a customer can drop the service. Most businesses work to keep those people.

Oh, and this was far from an apology. It was am “explaination” that the CEO gave with a smary smile on his face. It was an announcement of the split. Watch the video. I’m surprised he didn’t have a teleprompter or two.


31 posted on 09/19/2011 6:27:10 AM PDT by netmilsmom (Happiness is a choice)
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To: Usagi_yo; NRPM

This looks bad to me too, especially since Amazon now has a service too. I am thinking of the switch if convenience is compromised, considering I get free shipping from anything I buy on Amazon on top of the streaming.


32 posted on 09/19/2011 6:27:10 AM PDT by PrincessB (Drill Baby Drill.)
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To: GRRRRR

Ditto, same thing here, I too had the 3 DVD plan, no longer, livestream only now.


33 posted on 09/19/2011 6:30:04 AM PDT by Sea Parrot (Democrats creation of the entitlement class will prove out to be their very own Frankenstein monster)
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To: Usagi_yo

Or even Qwikflix is better than Qwickster. And if they just had to call it Qwickster, they should’ve spelled it Qwixter.


34 posted on 09/19/2011 6:30:08 AM PDT by EnquiringMind
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To: Usagi_yo

Indeed. If they had to split them, they should have kept Netflix for the DVD’s and named the streaming business Quickster.......

Double dumb!


35 posted on 09/19/2011 6:30:32 AM PDT by Arlis (- Virginia loghome/woods-dweller/Jesus lovin'/Bible-totin'/"gun-clinger")
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To: Krankor

Is this one of those “I’m sorry *you* misunderstood me.” sorts of things?


36 posted on 09/19/2011 6:32:34 AM PDT by Betis70 (Bruins!)
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To: Usagi_yo; All
Earlier thread:

Netflix Plan to Lure Back Subscribers: Confuse Them with a New Name "Qwikster"

37 posted on 09/19/2011 6:32:38 AM PDT by Virginia Ridgerunner (Sarah Palin has crossed the Rubicon!)
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To: Dead Corpse

Got to admit, Wife and I enjoy South Korean movies. They have a great sense of humor and they play it in even into serious flicks etc.


38 posted on 09/19/2011 6:33:48 AM PDT by Sea Parrot (Democrats creation of the entitlement class will prove out to be their very own Frankenstein monster)
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To: delapaz
The DVD-by-mail system is dead man walking.

Only to all you city folk. Here in the sticks we ain't got broadband and probably won't for the next 10 years or so. Streaming is out of the question for thousands of us. I love my DVD by mail, saves me the 50 mile round trip to the Redbox.

39 posted on 09/19/2011 6:34:02 AM PDT by ozark hilljilly
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To: Usagi_yo

Give the old product a new name and give the new product the old name? What fool thought that was a good idea?


40 posted on 09/19/2011 6:34:52 AM PDT by pepperdog (Why are Democrats Afraid of a Voter ID Law?)
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To: Usagi_yo
I just got Netflix 2 months ago. I don't get DVDs just streaming. I am disappointed in the selections, I thought there would be more movies to choose from.
41 posted on 09/19/2011 6:35:23 AM PDT by Ditter
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To: Usagi_yo

I was just in it for the DVDs. I cancelled months ago when they had the first price increase.


42 posted on 09/19/2011 6:36:11 AM PDT by andyk (Income != Wealth)
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To: Usagi_yo

I just dropped the DVDs-by-mail. I’ll keep the streaming for now.


43 posted on 09/19/2011 6:37:52 AM PDT by Alice in Wonderland
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To: Usagi_yo

I’m so glad I got the same email. It reminded me to go cancel my subscription. 8.99 -> 16.98 in a year. No thanks.

The streaming content was already BAD enough but once the Starz shows disappear since their contract expired (and not renewed) it’s about to get pathetic.

Qwikster is about as bad a name as you can get. Sounds like a convenient store or something. Tip for Mr CEO maybe something like ‘MailFlix’ or something to at least stay in the same branding realm.


44 posted on 09/19/2011 6:39:36 AM PDT by Rezod21
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To: Usagi_yo
My God you people are the BIGGEST bunch of whiners.

The company NEEDS to make a change. DVD's are dead. Streaming is the future. A GREAT service is trying to survive is a RAPIDLY changing market....and y'all just whine that you want it the way it always was.

Too friggin' BAD.... Drop their service. Find something better. Start your OWN business.

But, GADS man, stop the whining....you sound like a bunch of liberals who can't comprehend that business needs to MAKE MONEY and want them to subsidize YOUR way of life...

45 posted on 09/19/2011 6:39:44 AM PDT by KeepUSfree (WOSD = fascism pure and simple.)
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To: Usagi_yo

I’m so glad I got the same email. It reminded me to go cancel my subscription. 8.99 -> 16.98 in a year. No thanks.

The streaming content was already BAD enough but once the Starz shows disappear since their contract expired (and not renewed) it’s about to get pathetic.

Qwikster is about as bad a name as you can get. Sounds like a convenient store or something. Tip for Mr CEO maybe something like ‘MailFlix’ or something to at least stay in the same branding realm.


46 posted on 09/19/2011 6:40:03 AM PDT by Rezod21
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To: Usagi_yo

I love the streaming movies. I don’t even bother much with DVDs. But they need to get the best stuff on streaming to make that work. The took deadliest catch off, and I’m sure it was because the producers wanted to sell DVDs. A lot of good movies out that Netflix hasn’t gotten into streaming yet. Unless they fix that, it wont work.


47 posted on 09/19/2011 6:40:03 AM PDT by LevinFan
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To: netmilsmom

Agreed, which is why netflix streaming business needs to focus on that side of the business, and the mail business can focus on areas where they can win, like the aforementioned rural areas.

I’m just saying, I think it’s a good move, although netflix and mailflix would’ve made more sense as names.


48 posted on 09/19/2011 6:40:42 AM PDT by delapaz
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To: Usagi_yo
What a bunch of idjits.

Why not NetlixDVD.com and NetflixNet.com or something like that? Qwikster? Sounds like Shyster.

49 posted on 09/19/2011 6:41:48 AM PDT by IYAS9YAS (Rose, there's a Messerschmitt in the kitchen. Clean it up, will ya?)
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To: Usagi_yo
There are no pricing changes (we’re done with that!). If you subscribe to both services you will have two entries on your credit card statement, one for Qwikster and one for Netflix. The total will be the same as your current charges.

Does this mean they've cancelled the recent price hike, that we will be paying the same for streaming + 1 DVD as we did last month, only now with a separate CC charge for each?

50 posted on 09/19/2011 6:43:50 AM PDT by kevao
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