The Failure of Quickster
In September 2011, CEO Reed Hastings announced Netflix would be separating the movie streaming and DVD-by-mail services into two separate businesses. The streaming services would remain Netflix; the mail DVD’s would soon be called ‘Quickster’. The response to this news was so uniformly negative (from both customers and the press) that Netflix quickly squashed the idea and Quickster never came to be.
So…what happened and why was Quickster such a failed endeavor?
- A poorly defined problem. Quickster only made sense from an internal perspective: it was becoming unwieldily for Netflix to manage these two seemingly disparate business activities. There were whispers online of Netflix building up Quickster then selling off the DVD portion of the business. But, for customers and users, there was no issue. They were happy with both streaming movies on Netflix and having DVD’s sent to them via mail, all organized through one account. Netflix made the mistake of making their problem their customers’ problem….and trying to sell their customers on the solution. The incorrect assumption here was that solving an internal issue would somehow improve the customer experience.
- Bad timing. A few months prior to the Quickster announcement, Netflix told customers about a forthcoming price increase, from $9.99 a month to $15.98 a month. As a result, they were projected to lose close to a million customers. Stocks dropped by 50%. Following the price hike with the announcement that customers would soon be forced to manage two entirely separate accounts, on two different websites, created a huge backlash. It is easy to see in retrospect that Netflix was projecting into the future, where streaming technologies and options would be more robust and physical DVD’s would be less appealing to customers, but they were way ahead of both themselves, the market, and their customers.
- Lack of design process and empathy. The idea of Quickster, forcing customers to have separate accounts on two different websites, created questions, confusion, and distrust. Had Netflix engaged authentically with their customers much earlier in their design process, they might have landed on a solution that would have solved their problem in a graceful manner that also delighted their customers. Overall, it lacked strategy and was completely out of touch with the market and their customers.
Hastings was able to quickly pivot, cancelling both the price hikes and Quickster in a public email to customers, which helped their stock bounce back and restored confidence. It remains, however, a great example of why customer input and empathy are key to the design process.
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