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.
Telecom Industry Analyst
Colorful industry analyst sharing perspective on the changing industry for 25 years
770 579 5810
Other press releases from Jeff Kagan
- Apple iPhone Sales Weaker Than Expected | Jeff Kagan Industry Analyst - January 14th, 2013
- Will FACEBOOK Launch Phone This Week? | Jeff Kagan Industry Analyst - January 13th, 2013
- Nokia Not Out of Woods Yet | Jeff Kagan Wireless Analyst - January 10th, 2013
- Why Microsoft Windows 8 Holiday Sales Were Soft, Jeff Kagan Tech Analyst - January 5th, 2013
- Sprint Nextel Acquiring Clearwire for Wireless Data | Jeff Kagan Industry Analyst - December 17th, 2012
Contact InformationJeff Kagan
Title: Tech Analyst ~ Telecom Industry Analyst
PO Box 670562
Marietta, GA 30066
Phone: 770 579 5810