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Analysis: Netflix's new name is slow to catch hold
(Reuters) - It's difficult to remember, harder to spell and may go down as one of the biggest brand blunders in recent memory -- meet Qwikster.
Starting in a few weeks those familiar red envelopes that arrive with DVDs in millions of mailboxes will no longer carry the name Netflix, as they have since 1998. Instead, they will come from the newly branded Qwikster, a name Netflix Inc Chief Executive Reed Hastings choose because "it refers to quick delivery."
It can also be tricky to spell, sounds vaguely like a 1990s software firm, and is already the Twitter handle of someone named Jason Castillo, who uses a pot smoking Elmo as his Twitter profile picture.
"They've chosen Qwikster, which is a really weird name for the DVD mailing business," said Barbara Sullivan, Managing Partner of Sullivan, a branding and marketing agency. "Quick relative to what? The name implies speed that isn't there."
"What's very unusual about his move is that the well-known brand name is going to the new business," said Tim Calkins, a professor at Kellogg School of Management. "It's not sticking with the old business. Very often it is the new technology that is accompanied by a new brand name. It's very unusual to see new technology paired with an old brand name."
Others pointed out that companies have transitioned into new businesses without sacrificing a strong brand name, including Apple Inc expanding to phones from computers and Nike Inc expanding to sweatsuits from sneakers.
The main reason companies will change their name is because they are trying to escape a scandal. For instance, Blackwater, the private security firm, changed its name to Xe in hopes of distancing itself from controversy related to its work in Iraq and Afghanistan. Philip Morris Co replaced its name with Altria Group.
Netflix has also suffered from bad press recently due to its decision to hike its subscription fees, a move that cost it customers and pressured its stock price.
But most branding experts said Netflix's decision was based more around long-term strategy than its PR headaches.
"It's very bold, and they are clearly betting their future on streaming," said Emily Heyward, director of strategy at Red Antler, a branding and design agency. "To do that, do they need to amputate limb to save the body?"
Heyward said one of the biggest issues today is finding brand names that aren't already in use somewhere in the world, and ones that still have a website URL available. "It's why you have so many startups with funky spellings and misspellings."
Another branding expert, Adam Hanft, CEO of Hanft Projects, said the name change will probably prove a benefit as more customers turn to streaming -- and cancel the DVD service -- in years to come.
"Hastings is looking forward and recognizing that history is not on the side of the Qwikster business, history is on the side of the steaming business. It seems the appropriate thing to do to identify the future with the strong brand, Netflix."
Still, Hanft noted the irony of naming the slower service -- the one that comes through the post office rather than high speed telecommunications lines -- Qwikster.
"Of course, they weren't about to name it Oldster."
(Reporting by Paul Thomasch; Editing by Phil Berlowitz)
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