Netflix Goes Wobbly

October 10th, 2011

I guess Netflix wasn’t so confident in their decision to split off the DVD business:

It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs.

This means no change: one website, one account, one password… in other words, no Qwikster.

In May, John Gruber pointed out how effective Apple’s response to crises are. They take their time—what usually seems like too much time—to figure out the problem and how to respond, and then they respond. End of story. There’s no second response that completely upends their initial decision, because they took the time to decide what course they want to take before committing to it.

Apple’s response to the iPhone 4′s signal loss issue exemplified this. They took their time to investigate it, figure out their response and message, and then they delivered it: it isn’t as big a deal as people are saying, but here’s a free bumper if it is an issue for you. And even after an avalanche of ridiculous articles saying it wasn’t enough, the issue quickly died down.

Contrast that with how Netflix has handled this. They made a rather decisive decision to split their DVD business off into a separate service. People were, understandably, disappointed; this meant that they would have to go to two separate sites for streaming and renting DVDs, their movie ratings on one site would not carry over to the other, and they would have to maintain two different accounts.

Hastings knew that this would “make things more difficult” for their customers. That was kind of the point—to encourage them to use the streaming service, rather than go through the hassle of going to a site called Qwikster. So that means that they didn’t expect so many upset customers, nor such a steep drop in their stock, and now they’re trying to save it by reversing their decision.

There’s nothing wrong with quickly reversing mistakes, if you made a mistake. But there’s a big problem with not thinking through your next move before making it, or reversing what you believe is the right decision because people are angry.