A potential alliance between online video streaming company Netflix Inc <NFLX.O> and cable companies could spur cable television’s biggest premium player HBO to consider its options beyond the set-top box and go directly to customers on the Web.
Customers tired of abuse from cable companies found a refuge in Netflix, the video rental service that won over Wall Street with a fast-growing and fiercely loyal stable of subscribers wowed by great customer service.
The old cable narrative has always been about cable cowboys acting like typical old world monopolies: providing poor customer service (here’s a video of a Comcast technician having a nap on the job), terrible user experience and still having the nerve to raise prices every year. Cable companies have changed and evolved in the last decade but not enough for many customers.
Netflix was supposed to be different — very different.
It had a responsive customer service, a pleasant user experience and also fairly simple pricing. It was the opposite of cable. In no time at all users were telling their friends about Netflix.
That might have all changed.
Netflix has angered so many customers it was forced to lower its fourth-quarter subscriber projections, and CEO Reed Hastings offered an apology for the company’s handling of a recent price increase.
Hastings acknowledged many subscribers “felt we lacked respect and humility” when the company announced in July it was raising the cost for DVD subscribers by as much as $6 a month, or 60 percent. He said he “messed up” and “slid into arrogance based upon past success.”
Hastings did not, however, roll back the price increase.
Many customers weren’t buying the apology, with negative reactions piling up on the Netflix blog. Plus, Hastings provoked more anger by moving the DVD business to a separate website from the streaming service. That will force customers of both services to visit two different sites.
We caught up with Netflix CEO Reed Hastings at the movie rental company’s event where it awarded a $1 million prize after a contest aimed at improving the accuracy of movie recommendations. He spoke about his hopes of working with Apple on the iPhone, the possibility that YouTube will beef up its movie service, and the future of the DVD.
from Fan Fare:
Netflix Inc <NFLX.O> apparently didn't get the memo: there's a recession on.
The online DVD rental company is aiming for "at least" 12 percent net earnings growth in 2009 and will invest any "surplus profit" -- terms not heard much on Wall Street these days -- in growing its subscriber base and streaming content, Chief Executive Reed Hastings told investors on Monday.