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JoTo Out: You’re Out – Netflix

Our first JoTo Out goes to x-media and darling Netflix. In less than a week Netflix managed to screw up their rather divine position in the universe and ended up “drinking its own bathwater” (ancient Southern expression). First they announce a 60% price hike for their customers watching DVD’s and online video. Then they spin off their money-making, customer fave DVD-by-mail business into a separate service called Qwikster meaning that customers would have to have two accounts and pay for two separate services. Not very smart Mr. Netflix himself Reed Hastings – you just destroyed a successful working operation. Of course Qwikster was 86ed a month later but not before their stock crashed by 50%. But wait, that’s not all they compound the felony, they send out a press release to lessen the damage trying to explain away their faux pas. A press release – really? You don’t use PR to ‘splain your bad business sense… What are these people thinking?

TechCrunch: http://techcrunch.com/2011/10/25/netflix-loses-2-3-billion-market-cap/

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ZDNet: http://www.zdnet.com/blog/btl/netflixs-latest-show-when-creative-destruction-attacks/61786?tag=nl.e539


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