Gini Dietrich

Communication Tips for Netflix

By: Gini Dietrich | July 25, 2011 | 
95

I think we can all agree the way Netflix handled the communication of their price increase was a PR disaster.

But before we get to the communication lessons, let’s get this out of the way.

It sucks they had to increase their price. This economy sucks and, in the U.S., it could very well get even worse.

But you know what? We all have to increase our prices.

As Jay Dolan so aptly points out, $16 for DVDs and unlimited streaming is still A LOT cheaper than cable. In fact, if you order three movies on OnDemand, through your cable service, you have just spent as much as your monthly Netflix charge.

Now that we have that out of the way, I hope we can all agree this blog post is NOT about the price increase. 

It is about the way they could have handled this so much differently, still had the price increase, and not taken a beating on the web.

One would think they’d have learned their lesson when they planted actors in Canada during their launch…and got caught. But it seems they’re too arrogant to figure out how this whole social thing works.

You see, they have 93,000 Twitter followers, nearly two million Facebook fans, and 118,000 blog readers. The size of that community makes me envious.

But they have not, not once, asked anyone what they think.

It could go something like this:

  • Facebook update: The big boss says we have to increase our prices. How would you prefer to pay for your subscription?
  • Twitter: If we were to separate DVD rentals from unlimited streaming, would you prefer two prices or one bundled price?
  • Blog: A few hundred words about the need to increase the price and ASK people how they would like their subscription.

The thing about handling it this way is you are asking the questions in a very strategic manner (because you already know what needs to happen), but you’re involving the gigantic community in the decision.

At first, Netflix said it’s going to increase the price and you have to pay $16 for both. Then, after being under fire for a week, they announced two prices for separating them.

They could have avoided that second “announcement” altogether.

But what’s even more bothersome? They still haven’t responded to Twitter, Facebook, or the blog comments.

Shame, shame.

How would you have advised them to announce the price increase?

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About Gini Dietrich


Gini Dietrich is the founder and CEO of Arment Dietrich, an integrated marketing communications firm. She is the author of Spin Sucks, co-author of Marketing in the Round, and co-host of Inside PR. She also is the lead blogger at Spin Sucks and is the founder of Spin Sucks Pro.

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95 Comments on "Communication Tips for Netflix"

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josefrivera
josefrivera
4 years 10 months ago

@ginidietrich morning, wondering how that internship idea was bouncing around at your office?

Sean McGinnis
4 years 10 months ago
I’m sorry, but everything I’ve read about the netflix price increase to this point is just flat out wrong. It’s really interesting to me the way a market jumps to conclusions so quickly and how memes develop. Anyone who follows Netflix (even casually like me) saw this coming. The move wasn’t about raising revenue. It was about forcing people onto their preferred deliver platform (streaming). This has been part of the declared Netflix strategy for a long time (years in fact). See this Slideshare deck for some perspective. http://www.slideshare.net/reed2001/netflix-business-opportunity-5854575 You may still be right about whether there was a better… Read more »
HowieSPM
HowieSPM
4 years 10 months ago
Ahem…..cracks knuckles….clears throat….stretches….deep breath. ok here is goes. What is a PR post doing on this blog? Did you have to ask @Shonali ‘s permission to go in this direction? Well since obviously I am an expert in this field. They could of done a lot better. I mean when @bdorman264 had to double his insurance premiums for the space shuttle after the last tragic accident he told NASA…and I quote: I am doubling your premium and if you (insert word not proper for Spin Sucks here) don’t like it good luck finding someone else to insure your sorry ass.… Read more »
HowieSPM
HowieSPM
4 years 10 months ago

@Sean McGinnis I agree this was kind of backhanded Sean. The problem Netflix has is the catalog of streaming movies is not good enough to push people to just streaming. End of story.

We all know on demand is coming. We just don’t know how it will be coming. If I was the studios I would set up a store front for streaming movies at $1-2 a movie and be done with it. Cut out the middle people.

Though of course the inability for most people to stream onto their big screen TVs is a handicap.

KenMueller
4 years 10 months ago
Agree across the board on this. They needed to raise rates, it’s still a great deal, as many of my friends have pointed out, as they have abandoned cable for Netflix. Most of them just use the streaming anyway. My son just signed up last month, and is out of the country as the news broke. I informed him, and his decision was “well, we’ll just stop the DVDs”. What they need to do, however, is start offering more of those DVDs as streaming content. But the main point is how they communicated this. I don’t know why I’m still… Read more »
danielnewmanUV
danielnewmanUV
4 years 10 months ago

I just want to add one point – I don’t think that there is a single way that Netflix could have delivered this and made everyone happy.

Perhaps more advanced notice, but the reality is they have a fairly captive market at this point and their price is still very competitive.

Tough debate here – I look forward to watching it develop.

Shonali
4 years 10 months ago

@HowieSPM LOL, since when was my permission needed?!

T60Productions
4 years 10 months ago

Hi Gini… I’ll add another step to your social media ladder. After completing your strategy, how about sharing a video explaining why the change is necessary and why it impacts subscribers?

We’re talking about people who subscribe to a VIDEO service for crying out loud. Take the time to explain to them why it’s happening, in a format they all appreciate. I’m sure a lot of people would have still been upset, but there’s a large percentage that would appreciate the upfront approach.

–Tony Gnau

TheJackB
4 years 10 months ago

@HowieSPM @Sean McGinnis Howie, I am with you. If the studios were smart they would think about the volume and low price.

Charge a couple of bucks and make it easy to watch on any device and millions would flock to your service.

But that sort of thinking is anathema to a lot of them who think that since people will spend $12 a pop to see a new movie they can get them to spend close to that for something recent.

glenn_ferrell
glenn_ferrell
4 years 10 months ago
I think your suggestions on how they could have handled this are great. Their costs may be rising (Level 3 revenue seems to be dropping so they may have had to hike pricing.) But they could SAY something about this in your proposed SM discussion with fans. I wanted to say something serious before my rant. My problem is that the $16 doesn’t get me CNBC, SYFY and History channels (the latter is beginning to look more and more like the ‘fringe’ science and history channel and so less of a ‘prize’.) And — exactly HOW much time can you… Read more »
C_Pappas
C_Pappas
4 years 10 months ago

@ginidietrich My blog is coming along! Got a logo and some pics. Still working on other things.. Love your feedback! http://bit.ly/nvTtUs

glenn_ferrell
glenn_ferrell
4 years 10 months ago
@HowieSPM @Sean McGinnis I like that thinking Howie – as a consumer that’s what I’d vote for. Perhaps Netflix expects the studios to do that at some point and is just trying to make money while the sun shines so they can invest it in the next disruptive model. It is clear that Netflix wants to think of themselves as a “utility”. The problem (for them) is that Utilities get some government-insured exclusivity (in return for oversight). Something Netflix can only dream about; their current model gives them no protection against competition. So we come back to the PR question.… Read more »
PattiRoseKnight
PattiRoseKnight
4 years 10 months ago

What is the point in having a large following on their Blog, Twitter and Facebook if they don’t engage with them?

ginidietrich
ginidietrich
4 years 10 months ago

@glenn_ferrell You’re like me…we’re not their audience. But Mr. D is their audience. I’ll bet he rents 12-15 movies a month and he streams all the time. I don’t watch much TV (especially now that the Tour is over), but I do know I can easily spend $16 a month in OnDemand movies, especially if I’m relegated to the trainer.

But this is a blog post about the communication of the price increase!

ginidietrich
ginidietrich
4 years 10 months ago

@T60Productions Ha! GREAT point! I didn’t include any of the other tools because they don’t seem to have an audience anywhere else. But I agree…it’s a video service. Let’s use the tool we sell.

ginidietrich
ginidietrich
4 years 10 months ago

@danielnewmanUV I don’t think anyone can make everyone happy. But it could have been handled A LOT better, from a communication standpoint.

ginidietrich
ginidietrich
4 years 10 months ago

@KenMueller And the thing is…they totally could have accomplished the same thing, but have had a majority on their side when they made the announcement. The fact that they’re not engaging AT ALL with their communities is making me nuts.

ginidietrich
ginidietrich
4 years 10 months ago

@HowieSPM Have you seen how many people write on their wall or respond to their updates? Not hundreds of people, thousands of them, do. They absolutely would have been able to create consensus before the announcement.

ginidietrich
ginidietrich
4 years 10 months ago

@Shonali @HowieSPM Well you know, Shonali, it’s not like I write about PR.

ginidietrich
ginidietrich
4 years 10 months ago

@Sean McGinnis Um, this blog post is NOT about the price increase. It’s about how they should have communicated it differently. Lordy.

ginidietrich
ginidietrich
4 years 10 months ago

@TheJackB @HowieSPM @Sean McGinnis The funny thing is that the studios will never do it because, like the music labels, they’re stuck in 1980.

ginidietrich
ginidietrich
4 years 10 months ago

@glenn_ferrell I totally agree, Glenn.

ginidietrich
ginidietrich
4 years 10 months ago

@C_Pappas Woo hoo! I’ll check it out today!

ginidietrich
ginidietrich
4 years 10 months ago

@josefrivera We talked more about it this morning. Now we need to formalize a program.

danielnewmanUV
danielnewmanUV
4 years 10 months ago

@ginidietrich clearly the fact that dannybrown liked my comment says that I am spot on. 😉

marianne.worley
4 years 10 months ago

The sad thing is that Netflix used to be incredibly engaged with customers. I can’t remember what year it was, but they organized huge team scavenger hunts around the country, each based on a movie. Some of my family members participated in the “Raising Arizona” game and had a fabulous time with the Netflix team. We all thought Netflix was the real deal–a company that truly cared about its customers. When the communication stopped, it seemed like the beginning of the end to me. I don’t know if they’ll ever be able to get back to the glory days now.

ginidietrich
ginidietrich
4 years 10 months ago

@marianne.worley I think they changed leadership in the past couple of years. Am I making that up? I’m pretty sure that’s what happened.

ginidietrich
ginidietrich
4 years 10 months ago

@PattiRoseKnight EXACTLY!

ginidietrich
ginidietrich
4 years 10 months ago

@danielnewmanUV dannybrown Oh Lord.

Marijean
Marijean
4 years 10 months ago

@shelholtz what do you think of this — http://bit.ly/nO44OF have we reached social saturation?

Sean McGinnis
4 years 10 months ago

@ginidietrich The point is that what it is informs the communication strategy (or at least it should). because Netflix doesn’t care how people react to it, there was nothing they could have, or should have done differently, IMHO.

Your three tactical bullets all assume its about increasing price and asking for feedback from customers. They don’t care what customers think about any of the things you highlight. They actually want people to cancel dvd deliver by mail and run into the arms of streaming only.

glenn_ferrell
glenn_ferrell
4 years 10 months ago

@ginidietrich Yeah… I know. That’s why I made the obligatory on-topic comment before I started waving my arms and shouting 🙂

ginidietrich
ginidietrich
4 years 10 months ago
@Sean McGinnis If that’s the case, then my examples don’t work, but the tactical bullet messages can change, based on their strategy. The point is that they used to engage their audiences. Big time. Then they had the big flub in Canada and they started making decisions in a vacuum. It’s a bad, bad way to behave in today’s digital world. They SHOULD care about asking for feedback from customers or what they think. If they want people to cancel DVD delivery, there are PLENTY of ways they can get feedback in order to make the announcement. The better you… Read more »
dc2fla
dc2fla
4 years 10 months ago

It’s hard to escape the irony of a company which so embraced crowdsourcing a better algorithm has stopped communicating with the people they wanted to “know better” in order to predict their product preferences. So confident they’ve mastered the complexity of Big Data, they’ve lost sight of the simply obvious fact that their fans, their customers are more than statistics. The potential is envious, ignoring it is arrogance. Feet on the ground, you lay out 3 simple steps. But you can’t program community.

ginidietrich
ginidietrich
4 years 10 months ago

@dc2fla RIGHT?! It kind of hurts my stomach. SO MUCH potential.

ginidietrich
ginidietrich
4 years 10 months ago

@John_Trader1 I think they handle it all internally

John_Trader1
John_Trader1
4 years 10 months ago

@ginidietrich Thanks GD…wonder if under previous ownership they used an Agency? I need to investigate that.

Brankica
4 years 10 months ago
I use Netflix for streaming only so my price is the same for now, as far as I know, lol. I do rent movies on Cable because Netflix doesn’t have many new movies. And of course, I love the Red Box just because of the simplicity of it and the fact that my home is like a light year away from it so I count is as one of the advantages of America, lol. But that is not the subject as you said, and I do agree with you. they could have handled it better and I think they will… Read more »
ginidietrich
ginidietrich
4 years 10 months ago

@John_Trader1 I’d like to know too.

barrettrossie
4 years 10 months ago

@Sean McGinnis @ginidietrich Sean, how does this change the fact that they alienated their fans?

alexwood15
alexwood15
4 years 10 months ago
Havent responded to TW or FB comments? Seriously? With 2million+ fans, followers, whatever, that’s a disgrace. Gini, I love and use the ol’ ‘what do you think?’ post on TW for one of my clients and it works exceptionally well. In fact, we’re implementing a few of the suggestions made by our followers because… well, I thought a few of them were better than ours! I think companies forget they don’t know everything and whilst you may have a tribe in the millions, the purpose of the tribe should still always be to work together and engage that community in… Read more »
mediasres
4 years 10 months ago

While I agree that communication was horrible, I’m not sure it was a mistake per se. I see this in the very same model of non-communication as Facebook and Google who have regularly shut down any impression of customer influence. Have a problem with a Facebook Fan page and see how “social” FB is. I take that lack of communication to be a strategy.

Justicewordlaw
4 years 10 months ago

It’s a shocker that I just cancelled my netflix subscription two weeks ago and then they roll out with this. I feel as you suggested Gini that they could of leveraged their social accounts to announce a change and really get the customers opinion. Yes, they might have taken it into account or not but just giving your customers a voice in your company does say a lot about the growth that they would have taken in social media.

DemLaura33
DemLaura33
4 years 10 months ago

@afirmin hi alan.. just wanted tofor you. touch base and say hi. hope your week will be terrific :))–

MSchechter
MSchechter
4 years 10 months ago
It was such an overall mess. It wasn’t just the communication (which was insanely bad), but the actual tactics they used. Simply assuming that I was willing to spend more money pissed me off. They could have compelled me, they could have explained the situation beforehand, but I simply arrived to an email telling me what had happened and explaining that they could have changed it. I have no issue with the fact that they needed to raise prices, I have no issue with the fact that they wanted to split DVD and Streaming, I just hate that they didn’t… Read more »
HowieSPM
HowieSPM
4 years 10 months ago

@ginidietrich yes but here is the catch. When you post to the stream feed from a Brand Page most people don’t see it. But piss them off? They flock to the page.

Which in essence says if you want the Brand page to have more than 0.05% engagement numbers. Piss off your customers! 8)

afirmin
afirmin
4 years 10 months ago

@DemLaura33 Thank you Laura, hope you have a wonderful week as well, take care

BiztudioTeam
BiztudioTeam
4 years 10 months ago

@SeanMcGinnis It is said that the price increase is for paying the european landing… anyway, totally agree with the article! Thanks sean!

thelance
thelance
4 years 10 months ago
I’m a bit surprised there hasn’t been more pushback on the post. Happy to oblige though. First of all, I don’t think you can separate communication from business purpose. And in this case, I think it was critical. Sean McGinnis is dead on: Netflix needed to shed bad fit customers. When they are negotiating with studios, they need to know how many subscribers actually use the streaming service (and are willing to pay for it on its own right). Many people who have complained about the price increase say that Netflix doesn’t have a great online streaming selection. Encouraging those… Read more »
ginidietrich
ginidietrich
4 years 10 months ago

@wagnerwrites Common sense, more than anything

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