Will Netflix and Quikster Recover? | Jeff Kagan Tech Analyst

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Jeff Kagan

Tech Analyst

     

Netflix was a pipsqueak of a company several years ago when BlockBuster and Hollywood Video were king of the hill. Since then Netflix has continued to grow first as a mail order version of Blockbuster and then through downloading movies directly to the home.

Then not long ago Netflix raised prices significantly and their runaway growth hit a big pothole. Customers were saying goodbye in protest.

They have taken quite a bit of heat. The marketplace is an amazing thing isn’t it? When it votes, it leaves a deep impact. Think of the marketplace like an automatic seat belts.

In this case it put a hold on Netflix growth. Netflix which was always the underdog and was cared for and nurtured by the marketplace was suddenly the bad guy.

They announced a separation of their two businesses. New names were put into play. The first business of mailing DVD’s to the home will be called Quikster. The downloading of movies will be called Netflix.

Will Netflix recover? Will this have a long-term impact on their growth? Good questions. If this is the only mistake Netflix makes I think over time they will likely recover. If this is not the only mistake they make, perhaps the company will have a longer-term problem.

This is a good company with good people running it. They just goofed in guessing the reaction of the marketplace.

We’ll have to see what happens next.

Contact:

Jeff Kagan

Telecom Industry Analyst

Colorful industry analyst sharing perspective on the changing industry for 25 years

770 579 5810

jeff@jeffkagan.com

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