Netflix's double oops: Pricing, Qwikster

Your customers love you and your stock is flying high. What do you do? If you're Netflix in 2011, you tick off subscribers with a 60% price hike and the launch of a new business called Qwikster.

The idea of Qwikster, announced in July, was grounded in sound long-term thinking: It would be for the DVD business, while Netflix would be all about streaming, and that's where the future is. But for customers, it meant potentially dealing with two accounts, two credit card charges, and two Web sites.

The backlash was swift. More than 1 million users canceled their memberships, and Netflix shares have dropped by nearly 75% in recent months. Just one month after announcing Qwikster, Netflix abandoned the idea.

"We berate ourselves tremendously for that lack of insight because it didn't need to be that way," CEO Reed Hastings admitted recently at a conference. "But you know, in three or five years, we aren't going to remember it. It's going to be, `Did we succeed at streaming?'"

Until then, the company will have its work cut out for it. -- JP Mangalindan

@CNNMoney - Last updated December 20 2011: 1:40 PM ET
Join the Conversation

It's been a hot and cold year for the stock market, but these Fortune 500 companies managed to float to the top.

Most Popular

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.