In fact, it doubled down on September 18, as Hastings tried to sneak another customer-antagonizing decision inside the Trojan horse of an insincere apology for the rate increase. And thus already pissed customers learned that Netflix would spin off its DVD-by-mail service and rename it "Qwikster."
So negative was the reaction that, just three weeks later, Netflix buried Qwikster.
The competitive challenges surrounding Netflix at the beginning of the year were real, if not manageable. Netflix's blunders since July have made these challenges potentially fatal because the company has severely damaged its brand. The damage comes in the form of customer feelings of betrayal, and those may be impossible to overcome.
And that's the lesson for Internet companies with a loose grip on customers: If you antagonize them, they'll simply leave. Ask Digg and Myspace how that goes.
Bottom line: The question I asked almost exactly a year ago today -- Has Netflix Peaked? -- appears to have been answered. The questions for 2012 are: Has Netflix Hit Bottom? and Will Netflix Survive?