Whatever we thought of the terrible, ugly name ‘Qwikster’, we understood why Netflix decided to split its DVD and streaming business. Most exciting was that it was a rare and interesting example of a really big change in business strategy conducted in public.

Here in the UK we don’t get Netflix, so it was just a fun case study to watch, but the ire from the US was palpable. Usersstill reeling from a 60% price increase on some serviceswere enraged.

The main complaint was being forced to administer their disc and streaming services separately, on two different websites. The announcement was quite bold about this, pointing out that in future users would have to make any changes of address on each site. Of greater concern was having to maintain two separate lists, and one would assume two diverging versions of the famous recommendation engine. The reaction was so bad that the CEO had to come out and defend the new strategy on the Netflix blog.

Now on the same blog (but much more briefly) we see a u-turn:

This means no change: one website, one account, one password… in other words, no Qwikster.

Reed Hastings, CEO, Netflix

We’re unsure what to make of this. A worrying sign of corporate indecision? (There were some very good business reasons to split the legacy US disc business from the growing international streaming business). A laudable example of a company listening to its customers, admitting its mistakes and holding its hands up? A damning indictment of poor upfront research? A lot of poor communications and change-management? Or simply a lack of consideration for the user experience scuttling an otherwise workable plan?

Probably all of the above. But, one thing we can definitely take away is the importance of communication. We can definitely criticise the how, the why and the when of Mr Hastings’s crisis comms, but we absolutely stand behind his decision to come out and talk to his customers directly: when announcing the change, when responding to criticism, and to announce the u-turn. That deserves a little respect.

Posted by John on 10 October 2011