But 180-degree reversals are a potential signal that the company doesn't have a coherent strategy, or that management doesn't really understand their market.

Not really a problem in a highly autonomous firm, but I'm surprised to see this in a publicly-traded company like Netflix. Seems to have have worked for them, though.

So they should just stick with a very unpopular decision? I think that when (inevitably) mistakes happen, taking one on the chin is the best option.

I'm not saying they should stick with an unpopular decision at all, just that the typical publicly-traded company would be highly likely to do so in order to avoid being perceived as incoherent or disorganized.

Netflix painted themselves into a corner here, and had no easy way out. Other companies would have chosen a different solution.

The time to make the decision was before they added streaming to Netflix. Had Netflix launched Qwikster in the first place instead of Netflix Streaming, they might be in a stronger position today.

Given Netflix's current issues with content providers I would say that their strategy does have some issues.

Well, the way a company should be run is not to screw up that badly in the first place.

Honestly, the whole episode seems like amateur hour over there in the south bay. I'd have to guess that Reed is in over his head.

Companies need to take risks, companies that are too scared of failure don't innovate and eventually die.

And a fundamental part of taking risks is sometimes you'll screw up badly, it's how you react to that that's important.

There is a difference between taking a calculated risk and acting stupidly.

I don't think it was rocket science to predict that their customers were going to walk.

This is exactly what I was trying to say.