Ah, 2011… it wasn’t a fantastic year for many, and the seemingly-until-now untouchable Netflix was one of the casualties.
After some highs in the summer, Netflix stock began taking hits for a few factors, and the company seemed to hit a bit of an uncontrollable tailspin. The problems began with an unpopular rate hike in September, that doubled the cost of Netflix service for many subscribers. A large number of former Netflix fans threatened to quit the service in protest, and Netflix stock began to reflect the overwhelmingly critical consumer sentiment.
Then came Qwikster- the company’s failed attempt to spin off the DVD portion of the business from its popular streaming service, a move that garnered the company a double whammy of consumer outcry and forced CEO Reed Hastings to issue a frantic late-night email canning the whole concept after many customers threatened again to leave Netflix altogether.
The company has endured and still maintains a healthy subscriber base, but in addition to its PR woes, Netflix also engaged in some serious empire expansion, building out markets in Latin America and the UK. Owing to revenue hits and new ventures, the company has had what is undeniably a rough go of it in 2011, and CEO Reed Hastings would probably be the first to admit it.
It was revealed today that Hastings’ Netflix stock options would be halved in 2011, down from $3 million to $1.5 million in 2012. Pressed for comment by Bloomberg, a Netflix spokesman said the company doesn’t “comment on board decisions or executive compensation.”