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Open Letter to Netflix: Why I Sold Netflix and Support Them No Longer As a Shareholder

Image representing Netflix as depicted in Crun... So as of opening bell, I’ll probably no longer be a shareholder of Netflix.   It’s been a good run, but in my opinion, Reed Hastings has finally gone off the deep end when it comes to leading his company.  It’s one thing to make one mistake.  But to follow it up with an entirely different one is complete corporate suicide.

Let’s first preface this with the fact that I’ve been supporting the business since June of 2003. Yes, I have had my hands in this awesome business due to the fact that they just knew what the hell the customer wanted and provided it. And it rocked. Asian films, anime, you name it, they had it. And their customer service was completely and utterly awesome. The first time they had credited me for something that I didn’t even expect to happen. And this continued on for years whenever THEY made a mistake. This is how you run a company.

Then the price hike came. There have been others, but older customers always got grandfathered in under their old plan. Not with this hike though. No, this one had no explanation, no reasoning, just… hey, we’re going to up the price because we feel that streaming is just as good as DVD distribution. I’ll say that using their streaming, it’s as good as 2003 Netflix but not as good as current, especially the new releases. Regardless, the price was the same for streaming as it was for DVDs. Big mistake number one.

So Sunday night, Reed Hastings committed big mistake number two. He wrote all of this apologetic stuff that no one really cares about since their stock price tumbled due to subscriber loss and he stopped short of making amends for the price hike. Everything he said was true, as far as the reasoning for the price hikes, but he didn’t do what every other customer service driven company does. He didn’t appease the customers. Instead, he split the company in two so that Qwikster will be the DVD distribution (owned by Netflix still) and Netflix will concentrate on streaming only.

The key screw up here? CUSTOMER usability. If you’re getting into a streaming only business, that’s fine. But one key thing about user experience in the Internet world is interoperability behind the scenes. Believe me, I deal with it every day with my own accounting software company. The key to everything is always the fact that the customer should NEVER… EVER… have to sign into multiple items, or have to do a two stop shop, just because you think it’s a brilliant move. Everything should be integrated on the forefront and the operations behind the scenes are split into two entities. I don’t care how you do it, via API, or not, but two different billings and sites will kill you if people looked to your integrated area for use before. Operationally, I can understand the split. But what has been reported is that it’s going to be two different sites.

I’m sorry, buddy, but that was the last straw. Currently I’m looking to see if that invested money can be put to good use in Coinstar owned Redbox. Maybe some other internet IPO will come along and we’ll take a look at that. But as a long time customer, and supporter, the moves being made are going to placate your company for months to come. You said that you “slid into arrogance based upon past success” but finally saw the light. I hate to break it to you but the rest of your email reminded me of my mother when I was a child whom told me what I wanted to hear and said that I had a choice in the matter, but at the very end, threw in an argument that completely contradicted the entire hour of time she had spent. So, you’re not really thinking about us, are you? You’re thinking about how you can get us, and Wall Street off your back about all of this. And I’m telling you that customer service and Wall Street go hand in hand. Oh well, maybe you’ll see the light. Maybe you’ll understand finally that there were a number of things at play that propelled Netflix into stardom and kept it there. It wasn’t the streaming idea, nor DVD releases. It was the fact that you guys did it seamlessly and had awesome service. Put those two things in any business, and they’ll still be rock solid. Anyhow, if you ever want to change things up, just look me up.

Why Mergers Rarely Create Jobs

WASHINGTON - MAY 11:  AT&T President and CEO R... It’s interesting that sometimes you read about politicians trying to sell a sales pitch that is completely false. In this case, five Democrats are pushing the President to push the AT&T merger through without any regards to the DOJ’s decision, and the FCC’s decision. What’s more is that in their letter, something blatantly jumps out.

Job creation.

I have never seen full-time jobs created for a merger. Granted, there are many jobs that are contracted out. These are usually the same jobs that are let go and then contracted back out for the transition period. There is never an actual merger that doesn’t require some heads being chopped. Just look at Sprint and Nextel. Sprint themselves did a study on this, and having been with one of the vendors that was severely hurt by the backlash of the merger, I can say from personal experience that Sprint knows what they’re talking about. What’s worse is that one of the Representatives find themselves at the top of the list…. from my state. Rep. Heath Shuler (D, NC) is one of the leads on the letter above, trying to point out how many jobs it would create.

Has he not seen that the the Wells Fargo buy out of Wachovia meant that Wachovia laid off people along with temp jobs being created for the transition? Does he not know about the 2,000 jobs that are about to be lost due to the Duke Power and Progress Energy merger?

Sometimes, you have to wonder whether people actually do their homework when serving SIGs. If you’re going to push for someone that isn’t hiding their money trail very well, it’s probably a good idea to not be affiliated with them. In this regards, every party that has been rooting for AT&T has actually had cash donations to their causes.

Outside of antitrust, and monopoly ruling, I believe that AT&T chose the worst possible time to try to pull off this merger. When times were better, it would have probably been a no-brainer for the government to push it through unless they had some severe antitrust issues. But in the state of bad economics when unemployment numbers are even skewed lower than the reality (contractors, and P/T people are not counted in those figures), and people are hurting, they try to roll themselves back into Ma Bell of which was the original antitrust suit that broke them up. The irony.