Netflix CEO Apologizes and Announces Company Split

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Netflix CEO Reed Hastings is trying to win back goodwill lost by the company's recent price hike. In an email to customers, Hastings admits "I messed up. I owe you an explanation." In a video, Hastings introduces his head of DVD operations to explain the latest change -- splitting Netflix into two companies: one that will handle streaming video (to retain the Netflix name), and another to manage DVDs by mail, called Quikster.

Critics say that the deal was hastily put together, citing, among other issues, the Twitter handle @Quikster, currently owned by an individual represented by an image of a pot-smoking Elmo (reported by TechCrunch). 

Quikster Twitter 2

The Netflix blog post amassed over 15,000 comments within a day, reminiscent of the outcry after the July price hike.  Fans and former Netflix customers may remember the video parody about the public reaction.

Discussion Starters:

  • Looking at the Netflix blog, how well do you think the company is currently handling comments? What recommendations do you have for the CEO to improve communication at this point?
  • How successful do you find the video? What works well, and what, if anything, would you suggest that Hastings and Rendich change in their presentation?
  • How justified do you consider the public reaction to the news? In what ways is this different from the anger expressed earlier from Netflix customers?
  • Of Netflix's three main messages -- the email, the video, and the blog post -- which do you think is most effective and why?