Two Big Announcements, Two Different Results

Both Facebook and Netflix presently sit atop their respective industries (the latter’s position is a tad shakier after this week, but more on that shortly). Both dropped major bombshells this week. And both announcements were received with a collective, “meh.”

That may be where the similarities end, as both changes appear to be moving the companies in two separate directions; Facebook moving forward, and Netflix taking a step backwards.

Groupon and Living Social appear to have the daily deals market cornered and Twitter may have found its own niche as well, but Facebook, with its 80 million users, remains the premier social network. Netflix was making a run for a similar position in the DVD-by-mail and video streaming markets, but that has come to a screeching halt after this week.

It wasn’t too long ago that the future of Netflix looked blindingly bright. Striking deals with networks for streaming content and almost taking down the Blockbuster empire, Netflix seemed prime to shatter the ceiling that had previously been set for the industry.

After announcing a much-maligned price hike a few months ago, the company decided to reveal another shocker on Monday: it was splitting its streaming and DVD-by-mail services into two separate companies, Netflix and Qwikster, respectively. Already on shaky ground after the price increase, Netflix’ latest announcement was met with a bevy of mockery and public outcry. They couldn’t even secure the @Qwikster handle on Twitter!

The overwhelming sentiment across the Web seemed to be Why? Just when the company was starting to tighten its grasp on the DVD and streaming market, why add another brand to the mix? Even if the Qwikster brand is technically a Netflix company, why throw another name in the industry ring? Within days, the dying Blockbuster, now with the backing of Dish Network, could smell the blood in the water. It’s anticipated that sometime today Blockbuster and Dish Network will unveil a competitor for Qwikster.

On the Facebook end, Mark Zuckerberg & Co. already made several changes this week to the website’s homepage interface. Described by many as being “too busy,” the homepage now features more chat capabilities, news stories, pictures and even a familiar ticker. Facebook went on to make even greater redesigns with yesterday’s unveiling of the new Timeline feature. (Read all about the specifics of the changes here)

While both companies’ announcements drew some criticism from users, the major difference between the two is this; Facebook has a scorpion death lock on its market and Netflix thought it did. Despite the pleas for the old Facebook, millions of users will continue to log on daily. They may not like the changes, but they will come to at least tolerate them. That’s what gives Facebook execs the confidence and swagger to make these types of epic changes.

Netflix appears to have jumped the gun, believing it already had a Facebook-like foothold in its own market. The price jump didn’t endear the company to users and the introduction of Qwikster certainly hasn’t restored any faith. Just as it was finishing off it’s competition, Netflix and Reed Hastings gave their enemies new life.

*UPDATE, 10/10/11

Netflix and CEO Reed Hastings announced on Monday that the company would be scrapping the plans to split its DVD-by-mail and streaming services into two separate entities. And so ends the saga that was Qwikster…

Read the official  release from Netflix here.

 

by Daniel Sweeney | posted | in News
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