Is Netflix Stoned?

For people, breaking up is often a difficult and potentially devastating experience. But for companies, splitting up is a little different. Splitting up can mean, for many businesses, a new beginning.

For Netflix, breaking up currently stands as an awkward time in their lives, like middle school. With their recent plan to split their dvd-by-mail services and online video-streaming services into two different companies, Qwikster and Netflix, respectively, the question is not whether or not this was a right move for their business. Instead, the underlying question for Netflix is: Are they high?

But as absurd as that may sound, judging solely by the Twitter account attached to @Qwikster, it may seem that yes, in fact, Netflix (or at least one of their interns) is stoned out of their mind.

Qwikster. The sober one.

I jest, of course. That account, run by Jason Castillo, is not in fact an official account for Qwikster. Unfortunately for Netflix, many of their users don’t seem to realize that, having ballooned the follower account for Castillo’s Twitter handle from a measly several hundred, to well over 10,000 in just a few days.

But truthfully, this move from Netflix has made a lot of critics and skeptics question whether or not Netflix is, well, you know.

For some, the splitting of their two increasingly alienated services seems to be an admission of defeat; a statement from Netflix that, despite their dvd-by-mail services being the foundation for what would eventually become the mecca of online movie streaming, they have conceded that it is no longer in their best interest to continue dragging their feet with the dvd-by-mail service that has since become a less-profitable, outdated venture for the company.

For others, it stands as a cry for help. Currently standing at the front page of Netflix’s blog is an apology letter by CEO Reed Hastings – or so it appears. But tucked slyly away, deep inside that apology, is the announcement that Netflix plans to spin-off its two distinctly services into two far more distinct companies.

It’s clever, but also slightly frightening. What that message appears to suggest is that Netflix, following the recent exodus of users with their 60% price hike, isn’t necessarily confident on the continued growth of their company. Slipping their decision to split the company into one of the latter paragraphs of an apology letter doesn’t necessarily exude confidence about the company’s future. Combine that with the fact that their streaming services are now losing some of Starz channel’s juicy streaming content after their deal expires in 2012, and the road ahead for Netflix doesn’t necessarily appear to be paved with cash.

Still, it could also be a new beginning for them; a brilliant decision by Netflix to further highlight the value of both of their markedly different services. Throw in the fact that they will also be adding videogames to their mailing options, and Qwikster suddenly becomes a lot more enticing.

But only time will tell if Netflix’s recent decision will work to encourage customers that have since been put-off by the service.

Do you think that Netflix and Qwikster will have what it takes to continue to attract customers and maintain their growth as a business?



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