Netflix Battered Again
Subscriber outrage over the decision by Netflix to spin off its DVD-by-mail business into a new company called Qwikster flooded movie-related websites on Monday, as shares in the company continued to plunge. In early trading today (Tuesday) they were down more than 5 percent to 136.29, hitting a 52-week low. In July they had hit an all-time high of $304.79. BTIG analyst Richard Greenfield noted on Monday that the Netflix moves appeared to fly in the face of its own formula for success stated in a presentation last May "If we keep subscribers raving about Netflix, we will prosper." But 23,000 unhappy Netflix subscribers have posted angry responses to what they seemed to regard as a mealy mouthed apology by company CEO Reed Hastings on Sunday (in which he also announced the separation of the DVD and streaming rental services). Furthermore, it now turns out that Hastings and company did not check to see whether @Qwikster was registered with Twitter. It is, and it's registered to one Jason Castillo whose Twitter site sports a doctored picture of Sesame Street's Elmo, smoking a marijuana joint and contains all manner of sexual and drug-related tweets. Castillo says that he wants a minimum of six figures to give up the name. Meanwhile, Blockbuster, which was recently acquired by DISH Network, is expected to make a bid for Netflix's alienated subscribers Friday when it unveils its own streaming video service as part of what it is touting as "the most comprehensive home entertainment package ever."