Netflix announced Monday that they're canceling their plans to split into two brands, Netflix for streaming and Qwikster for DVDs by mail, though there will still be an internal separation.
"Saturday Night Live" had a Netflix sketch planned that got cut for time, but they put it up online. It takes a shot at Netflix's public apologies, particularly this video. While the show elevates the situation for comedic effect, the setup isn't too far off from reality. SNL's Jason Sudeikis, playing Netflix CEO Reed Hastings, summarized what most see as Netflix's problems. "We raised our rates from $10 a month to $16 a month, but that's not all. We knew you loved Netflix because it was an easy to use website for all your movie needs. To make it better, we split it into two separate, slightly more confusing sites."
Those public apologies continued today. The New York Times quoted a Netflix spokesman saying "We underestimated the appeal of the single Web site and a single service," quickly adding, "We greatly underestimated it."
Can Netflix rebuild its reputation after months of blunders? The company's problems led to Netflix announcing that they were going to end the third quarter with 1 million fewer customers than they'd initially anticipated. A Goldman Sachs analyst even said that, if not for this about face, Netflix could have lost the majority of the 12 million customers who subscribe to both DVD and streaming services. Another analyst noted that "the company has lost a considerable amount of goodwill with customers," but that the company will continue to grow in 2012.