By Larry Magid

LOS GATOS (KCBS)– Netflix is facing a backlash from its customers after an apology from Reed Hastings, the CEO of Netflix. The Los Gatos-based video service recently raised prices for DVDs and streaming services.

“What he really needed to do is acknowledge they need to separate out the streaming and DVD business in order to improve the streaming business,” said KCBS Technology Analyst Larry Magid.

Magid believes Hastings should have emphasized his company is trying to improve streaming.

Magid said that Netflix is dependent on what Hollywood is willing to let them do, and has had some major setbacks.

“Frankly they’re bleeding customers,” Magid said. “I’m not going to say it’s going to kill them, but it’s hurting them pretty badly.”

KCBS Technology Analyst Larry Magid:

Magid said DVDs will become like floppy disks, and people will want to download videos.

(Copyright 2011 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services may have contributed to this report.)

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