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Qwik on the Draw

On September 18, the CEO of Netflix, a guy named Reed Hastings, sent to his customers one of the weirder letters you'll probably ever get from the CEO of a billion-dollar company.

It began with an apology for the enormous price increase that The Netflix Team had announced in late July. Quickly, however, it became apparent that Reed wasn't actually going to do anything to ameliorate the situation; Netflix wasn't reverting to its earlier prices - he just kind of felt bad that people were so upset (because of him), and he wanted to apologize.

The weirdest part was that, in the midst of apologizing-for-but-not-fixing his prior error, Reed took the time to announce plans to commit a way more annoying error - he wanted to split Netflix into two separate branches, forcing customers to deal with two companies in order to receive the same services they'd previously gotten, conveniently, from one. And, amazingly, the error was obvious to everyone who read the letter but, apparently, not to him.

See, for several years, Netflix - which, as I'm sure you know, has been the nation's most successful video-rental company for a while - delivered movies and TV shows to its customers by two methods: streaming media, which the Internet transmitted into your home, and DVDs, which the U.S. Postal Service dropped into your mailbox. The streaming media and the DVDs filled different needs - the former gave you instantaneous (though limited) content, while the latter offered way more choices at a way slower clip - but the two services were perfectly integrated: from one website, with one account, you had access to both inventories, and when you searched for a movie, you knew instantly if it belonged to one or the other and could choose which way you wanted to receive it.

Unfortunately, Reed has decided to break up these two complementary catalogs: pretty soon, "Netflix" will deal only in streaming media, while its newly created sibling, "Qwikster," will handle the DVDs on a completely independent, un-integrated website. So, I guess, if you like DVDs, you'll have to sign up again, redo your queue, and, unless you cancel your Netflix account, spend the rest of your life logging into two different websites in order to obtain nothing different from what you used to get from just one.

This may sound to you like a minor inconvenience - and of course you're right, but what I think really gets to customers about it is that it's so obviously stupid, so strictly senseless that the change almost seems as though it were designed solely to annoy us, to show contempt for us. Netflix's stock, which traded at $300 two months ago, now sits at $130.

If you discard the notion that the company is bent on self-destruction, you have to wonder: what was the reason? Surely none of the empty ones listed in Reed's letter or its accompanying YouTube video ("When we looked forward at our business, we realized: over time, DVD and streaming were becoming more and more different" - they're not, and who says one company can't sell two slightly different products?) had anything to do with it. Some people have speculated that Netflix, having realized that streaming media is the future, is trying to distance itself from its DVD operation and will ultimately sell it off - but then, if that's the case (or even just the general perception in the industry), who'll want to buy Qwikster?

My guess is that some companies simply possess a cacoethes for change, a belief that, even though everything may seem fine the way it is, if you're not shaking things up, you're actually dying. You must move forward at all times, even if "forward" is actually backward (New Coke!). Witness Facebook's ridiculous new format, which eliminates the option of reading the items on your News Feed in a simple newest-to-oldest order; instead, Facebook now uses some mysterious algorithm to determine which "Top Stories" to show you first - as though anything on Facebook could rightly be called a "Top Story" - and allocates other, ostensibly less important information to a useless new box in the upper-right corner. The new Facebook is more than cluttered and confusing; it's arrogant, and everyone hates it. So why did Zuck do it? Why, moreover, did our beloved IMDb switch to a hideous layout that takes great care to hide nearly all of its content?

Well, I have no idea, but this sort of thing happens all the time - think of that restaurant you loved that inexplicably stopped offering its best dish. The important question, I guess, is this: did you stop going to the restaurant?

One of the great Facebook pastimes, I've learned, is threatening to quit Facebook whenever anything visibly alters. Of course, no one ever follows through. It makes me wonder just how pitifully devoted we really are to the corporations and goods and services that furnish our lives - to the pizza place that stopped being good years ago, to the TV show that ought to have been cancelled in Season Four, to the IMDb and Facebook.

The other day, I was complaining to a friend about Netflix's bifurcation, and he suggested I switch to another company - there are other good movie services, apparently, and he named one for me. And what surprised me was that, for all my rage, I actually wasn't remotely interested in switching to a different service. I didn't want anything new; I wanted Netflix, my Netflix, the way it used to be. As long as I remember how much I used to like them, I'll probably stick by them, like those people who continue dating certain boyfriends or girlfriends whom they no longer love, just out of attachment or habit or hope that someday the relationship will magically revert to its glory days. I'm not exactly sentimental about Netflix, but it's a part of my life. What can I do?

Lame, I know. As it turns out, I'm the reason companies get away with horrible decisions.

Tagged: Netflix, Reed Hastings, generation y