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Can Netflix Regain Lost Ground?

CEO Reed Hastings’ poorly explained pricing and service changes have alienated customers and handed rivals an opening

At Netflix, new hires are drilled in Chief Executive Officer Reed Hastings’ guiding principles. Avoid “barnacles” that can slow down a fast-growing business, Hastings advises newcomers. Make tough decisions without agonizing and focus on great results rather than process, go his dictums, which are posted on the video service’s corporate site.

Now Hastings, who founded Netflix in 1997, is learning the limits of his shoot-first credo. His attempt to navigate away from DVDs-by-mail and toward online movies and television shows resulted in a series of poorly explained pricing and service changes, announced by Hastings on the Netflix blog, that alienated customers and Wall Street.