What is going on with Netflix?

 So, let’s backtrack a bit.

Over the summer, Netflix was unable to reach an agreement with Starz to keep their entire catalog available via streaming video; according to many published reports (like this one). Realizing that this would greatly damage their streaming catalouge, and by extension, their streaming business, Netflix knew they had to do something.

At the beginning of September, Netflix decides that they need a roughly 60% price increase to a) stay competitive, and b) gain enough revenue to show the movie industry as a whole that streaming video is not only the future, but the present as well. And, to improve on their number of streaming only customers, they decide to jettison the DVD business from the Netflix brand (creating “Qwikster”), and in doing so, again call attention to the ever-growing number of streaming customers. While everyone knew about the price hike, the new “Qwikster” brand was a total curveball to many customers, so much so that Netflix’s CEO felt compelled to send a “State of the Union” address to customers via email (forbes.com) explaining the rationale behind the move, and pointing out that Qwikster would include features that many customers have wanted for quite awhile (such as video games).

And now, a little over a month after the email explaining the “new direction”, things have changed once more. At this point, it really seems like a rudderless ship, which is amazing when you consider the sparse and weak competition they currently face. Luckily for them, consumers have few alternatives, and those alternatives (Hulu+, Amazon) have much smaller streaming catalouges.

But, as the competition starts to increase (which it certainly will), will Netflix have the direction and leadership to stay on top?