Netflix and Qwikster

What one of the biggest blunders in group decision making can teach us about the power of independent feedback

Photo by freestocks on Unsplash

In 2011, Reed Hastings, CEO of Netflix, was facing a big decision about what to do about their DVD rental and streaming businesses. It was clear the two had become separate businesses, with distinct strategies and trajectories. Separately, the trailblazing streaming business was starting to face competition, as services like Hulu entered the market.

Netflix needed to change their strategy.

In a blog post, Hastings announced their solution: They would split Netflix into two independent businesses. The streaming business would remain Netflix but the DVD rental business would now be rebranded as Qwikster.

It was a disaster. And, with the benefit of hindsight, it is obvious why.