Posted on Monday, October 10, 2011
In a concession to the flurry of customer complaints that accompanied the recently announced separation of its DVD and streaming businesses, Netflix just notified its customers that it would not be separating the streaming and DVD customer service websites.
As I argued in a recent post, Netflix’s plan to quickly separate the two parts of the business didn’t make sense for customers. To me, Reed Hastings’ instinct to separate into two businesses had merit from internal and investor standpoints, but he should have taken the awful customer and investor reaction to the initial plan and pricing changes as a signal to stop, or at least wait, on the reorganization. He didn’t at that point, but now seems to have learned the right lesson.