Netflix, long a darling of the burgeoning OTT video market, has made some serious missteps of late. Word today is that Netflix will abandon Qwikster, their DVD-by-mail spin-off, just three weeks after announcing its formation.
“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,” Netflix CEO Reed Hastings announced on their corporate blog today.
The initial move to Qwikster left many in the industry scratching their head and came on the heels of a significant price increase for Netflix, which met stiff opposition from customers. The backlash has caused dramatic customer defections and Netflix’s stock price has been hammered.
The change of heart regarding Qwikster demonstrates the unchartered territory of OTT video and its business model. Netflix initially tried to separate its legacy DVD-by-mail business to concentrate on what is presumed to be its core business going forward – streaming OTT video.
But as we are often reminded, sometimes painfully so, consumers and the market dictate which direction companies ultimately move. In the fast moving world of digital content distribution, even forward thinking companies like Netflix are at this mercy.