18/03/2021
From Before Netflix was an OTT platform, it has been the premier DVD-by-mail rental platform since 1998
When Netflix was looking to transition from DVD delivery to a streaming service, it had a few missteps along the way.
At first, members had the option of subscribing to both streaming and DVD delivery services for $10 per month
Then company built a system in which its streaming and DVD delivery services would become different entities with separate billing agreements.
But the split meant a 60% price increase for current members who wanted both -- the new system’s fees were $8 each month solely for the DVD service, plus another $8 per month for streaming
What’s worse, the company didn’t really provide a clear explanation on the price hike
The change meant a price increase that customers weren’t happy about. People enjoyed having the option of signing up for multiple services with one bill
Three weeks later, CEO Reed Hastings issued an apology- “Okay, you’re right. Having two billing systems was a bad idea, and we’re doing away with that.” Netflix did suffer some initial damage, with a loss of 800,000 members and a falling stock price but recovered after that.
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