Explaining Southern California's economy

Memo to Netflix: Just tell customers what you want to do

Netflix CEO Reed Hastings has stuck a fork in Qwikster, the briefly lived spinoff of the company's DVD rental business.

Netflix has backtracked on plans to spinoff its DVD-rental business into a separate company, Qwikster — a bad move that has been resoundingly ridiculed everywhere bad moves can be resoundingly ridiculed. The cost is that CEO Reed Hastings now looks like a nincompoop, whereas before the Qwikster debacle he looked like a man who knew the future.

That's part of the problem, of course. Hastings grasped that the DVD business wasn't sustainable over the long haul. The future lay with online streaming. But to build that business, Netflix needs to license more content from TV and movie studios. The game plan was to raise subscriptions to generate the needed revenue and begin to phase out the old DVD business.

Hastings has been speaking directly to customers via Netflix's blog. His message is small miracle of concision in the ongoing hell that has been the needless messing-up of once-beloved, now-embattled Netflix:

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Reportings: Grocery strike; Netflix screw-up; Jerry's veto

Still no grocery strike in Southern California. But you have to wonder why the union and the big chain stores — Albertsons, Ralphs, and Vons — couldn't figure out how to resolve the problems with a jointly administered health care fund before now. VoiceofOC.org provided a blow-by-blow back in June, explaining how the fund was allowed to rapidly move from surplus to looming deficit. (VoiceofOC.org)

 

Speaking of which, the LA Times thinks a strike now would be a very bad move for the chains: "Today, Ralphs, Vons and Albertsons have fewer stores in Southern California, and fewer employees. Albertsons has closed 67 locations since the 2003-04 strike and worker lockout. Ralphs has closed 48 stores, and Vons and Pavilions are down 47." (LAT)

 

Netflix CEO Reed Hastings' solution to the epic screw-up of raising prices on subscriptions: The smaller DVD-by-mail business will now be spun off into a new company, Qwikster, presumably allowing Netflix to restore its brand. How long did it take to think up that new name? (NYT)

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