The Netflix Company first emerged in the market in the year of 1997. In 1998, it began offering high quality DVDs for rental and sale. By the year of 2000, it underwent some serious investment projects by Group Arnault and started its first subscription plan. Netflix was able to introduce some new ideas to the customers. For a very low subscription fee, customers were able to get high quality DVDs via postal services and return them at their convenience without having to pay late fees or any other penalties unlike the Blockbuster’s policy. In addition, by partnering with Warner Brothers, Columbia, Sony Pictures and many other giant filmmaking companies, the assortment of Netflix movie library was constantly growing. Soon, it was possible to watch many new theater releases as well as TV shows on Netflix.
By the year of 2008, after being a public offering company and having over 1,000,000 subscribers, Netflix introduced Internet video streaming. It has soon become one of the biggest sources of web traffic in the USA. By partnering with Starz Entertainment, the selection of instant play grew even more making Netflix one of the most popular and successful companies. However, in 2011, it was announced by the company that instant watch and DVD rental would be split in two separate services with different names, renaming the latter on to Quickster. At the same time, the subscription prices were increased by almost 70% which, despite still being comparatively low, caused a great wave of disappointment among the subscribers. Many of them decided to cancel their subscriptions due to inconsistent and shady policy within the company. Taking into account such negative effect, the management of Netflix quickly decided to cancel all new changes but kept the increased prices. As a result, the company had suffered considerable losses in their revenues.
Obviously, such policy within the company was not productive. It is extremely important for any company to always listen to what their customers want and address their needs. For that reason, any major decision within the company has to be coordinated with consumers first. It would be extremely helpful for the management to actually organize several surveys prior to implementing such serious changes and learn if the market was responding to such innovations. In addition, financial part of the subscription should also remain consistent. Such jumps in prices during the period of global recession were not helpful. It should have been taken into account that any increases in prices need to be smooth. For that reason, if the company does not take these recommendations into account and continues its policy without involving consumers in the decision making, they will fail very …