Gini Dietrich

Netflix: A Lesson In Communication and What Not to Do

By: Gini Dietrich | September 20, 2011 | 
147

Oh Netflix. What are we to do with you?

On one hand, we’re pleased that your CEO, Reed Hastings, apologized by saying he “messed up.”

On the other hand, we’re disturbed that you, by now, don’t understand the online world well enough to know you should have checked to see if the name you’ve chosen for your DVD business was available on the social networks.

Oh yes, it’s true. Not only have you chosen a name – Qwikster – that is a far cry from your brand, but the Twitter account is owned by a weed-smoking Elmo.

Granted, the Twitter account owner has changed the avatar since you announced your name, but he’s still cursing and talking about smoking pot and “doing” girls. And it’s pretty clear he’s not giving up his name to you.

On one hand, we like the humility.

On the other hand, it’s a little too late.

On one hand, we appreciate the explantion.

On the other hand, we would have respected you more if you’d told us two months ago that you were moving into the streaming business and saw a need for the future away from DVDs. But, like most business leaders, you didn’t have the cajones to say that…and you probably thought you were going to make a bunch of money on the DVD side of the business until they did go away. Perhaps you could learn a thing or two from Steve Jobs.

On one hand, we respect your honesty and transparency in telling us that your greatest fear has been that you “wouldn’t make the leap from success in DVDs to success in streaming.”

On the other hand, it seems perfectly timed because you just lost nearly 50 percent of your stock price. We’re not experts, but we think that’s a lot.

On one hand…

Oh forget it. We’re trying really hard to understand the communication strategy behind all of this, but we feel like it’s an “I’m sorry, but…” apology. First you hired actors when you launched in Canada, something entirely unnecessary because they wanted your service so badly.

Then you hiked your prices and alerted customers by an email that arrived in the middle of the night.

And now you’re apologizing, but trying to get us to understand your side of things with a huge explanation.

Guess what? We don’t care. We don’t care that you don’t see a future in DVDs. We don’t care that you’re fearful of leaving behind something you built your business around. We don’t care that it’s easier for YOU if you separate the two businesses. We don’t care that the businesses are already separate so it makes sense that we have to log in to two different places. We don’t really care that you raised your prices, but in how it was communicated.

All we care about is if we can get movies, when we want them, and how we want them. Which we would have told you, if you’d asked us…like you used to do.

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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147 Comments on "Netflix: A Lesson In Communication and What Not to Do"

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M_Koehler
M_Koehler
4 years 7 months ago

Buwhahaha. Way to look into things Netflix. I think it’s way too little way to late for Netflix now. We’ve noticed a sharp uptick in traffic through the chain store we have here in Hooterville and the Redbox at the grocery is always busy now. Way to go there. I still struggle to see what the whole point of all of this was. I’m not sure how this was ever going to be a successful plan to grow and sustain their business.

ginidietrich
ginidietrich
4 years 7 months ago

@M_Koehler I think the whole point was to be rid of DVDs and move into streaming, which is a good business decision. But the way they’ve handled it has been so poor that their stock price has dropped nearly 50% and they’ve lost tons and tons of customers. People are looking to places (Amazon?) that will do it better and won’t make such a to-do about it. I really would have respected them more if they’d said, “We’re doing away with DVDs. You have six more months to rent them and then move to streaming or find another supplier.”

KenMueller
4 years 7 months ago

Reed Hastings and the company blew it big time. I think he genuinely is sorry, but like you pointed out…too little too late? Throw your customers a bone, Reed!

And how many hands DO you have???

ginidietrich
ginidietrich
4 years 7 months ago

@KenMueller I must have eight hands.

KenMueller
4 years 7 months ago

@ginidietrich man, you must have been fun on a date…

HowieSPM
4 years 7 months ago
This is funny. I blog all the time that most people…almost all people…don’t care about almost all brands. I bet we each have maybe…MAYBE….0.05% of the brands in our life we would cry if they disappeared. Didn’t thesaleslion just blog on @DannyBrown that everyone is replaceable. Well guess what…EVERY BRAND is too. Even municipal services that have a monopoly are replaceable (though some my take work). And why is it always the market leaders that often stumble so bad. Blockbuster maybe blew it but they never blew it with their customers. They didn’t do dumb PR. They just failed to… Read more »
HowieSPM
4 years 7 months ago
This is funny. I blog all the time that most people…almost all people…don’t care about almost all brands. I bet we each have maybe…MAYBE….0.05% of the brands in our life we would cry if they disappeared. Didn’t thesaleslion just blog on @DannyBrown that everyone is replaceable. Well guess what…EVERY BRAND is too. Even municipal services that have a monopoly are replaceable (though some my take work). And why is it always the market leaders that often stumble so bad. Blockbuster maybe blew it but they never blew it with their customers. They didn’t do dumb PR. They just failed to… Read more »
Nic_Cartwright
4 years 7 months ago

There seems to be a theme to your posts Gini – that honesty and consistent openess is the best route.

And I have to be honest – I like.

jasonkonopinski
4 years 7 months ago

Yes, Netflix and Reed screwed the pooch. At the end of the day, I’m still a Netflix (streaming only) subscriber and that’ll not soon change. The long term picture for Netflix, Hulu et al needs to be in content ownership and distribution.

EricaAllison
4 years 7 months ago

Oh my. So many hands. So little smarts. Zero planning. Sigh.

ginidietrich
ginidietrich
4 years 7 months ago

@KenMueller No comment.

ginidietrich
ginidietrich
4 years 7 months ago

@HowieSPM I also feel like he’s getting counsel that, as a start-up could work because there was room to fail. But they’re no longer a start-up. And, like you said, no one cares about his vision. We only care about how it affects us.

ginidietrich
ginidietrich
4 years 7 months ago

@Nic_Cartwright Yes. But the issue here is he was honest with this last round (too late). No one cares about his vision or his fears. We only care that he’s sorry.

ginidietrich
ginidietrich
4 years 7 months ago

@jasonkonopinski Me too. But only because there isn’t another option. Yet. But we’re not in the majority.

ginidietrich
ginidietrich
4 years 7 months ago

@jasonkonopinski Me too. But only because there isn’t another option. Yet. But we’re not in the majority.

ginidietrich
ginidietrich
4 years 7 months ago

@EricaAllison I think they did plan. They sat in a conference room, in a vacuum, and decided what to do. They didn’t talk to customers. And their counsel is wrong.

ginidietrich
ginidietrich
4 years 7 months ago

@EricaAllison I think they did plan. They sat in a conference room, in a vacuum, and decided what to do. They didn’t talk to customers. And their counsel is wrong.

EugeneFarber
4 years 7 months ago

Hahaha! Weed smoking elmo??

Maybe they should have stuck with the name. How many pot-heads do you think you netflix? So much easier to just have a video stream right to your TV when your busy munching on some crackers. I think there’s was some planning behind this after all.

EugeneFarber
4 years 7 months ago

Use** Netflix. More coffee!

rustyspeidel
rustyspeidel
4 years 7 months ago

Exactly.

ginidietrich
ginidietrich
4 years 7 months ago

@EugeneFarber Crackers? Try Cheetos. Remind me never to smoke a joint with you. #boringfood

ginidietrich
ginidietrich
4 years 7 months ago

@EugeneFarber Crackers? Try Cheetos. Remind me never to smoke a joint with you. #boringfood

ginidietrich
ginidietrich
4 years 7 months ago

@rustyspeidel Man of many words

ginidietrich
ginidietrich
4 years 7 months ago

@rustyspeidel Man of many words

rustyspeidel
rustyspeidel
4 years 7 months ago

@ginidietrich @Nic_Cartwright actually, I only care that he gets all those DVDs onto the streaming site PRONTO! otherwise he’s toast.

MSchechter
MSchechter
4 years 7 months ago
Oh but we could have, we could have cared. They could have showed us a vision of the future and told us where things were going. They could have said what most already know. That the DVD is about to die and that they want to be the ones who bring us the best streaming content on the planet. But they didn’t. All they did was inform us of a business model change and hedge their bets. Worse yet, they told the suborn movie studios that they still have time. That DVD still has legs, that they have hand in… Read more »
ginidietrich
ginidietrich
4 years 7 months ago

@MSchechter Seriously. Steve Jobs never cared about what people thought or a short-term gain. He only saw what was coming and he went for it. Netflix used to know how to get their customers engaged. This past year has not been kind to them.

ginidietrich
ginidietrich
4 years 7 months ago

@MSchechter Seriously. Steve Jobs never cared about what people thought or a short-term gain. He only saw what was coming and he went for it. Netflix used to know how to get their customers engaged. This past year has not been kind to them.

FocusedWords
FocusedWords
4 years 7 months ago

Maybe they should have blamed the Avatar. The pot smoking Elmo came into the conference room and everyone got high from second hand smoke. The idea sounded so great everyone said, “Dude!!” and the rest is history.

FocusedWords
FocusedWords
4 years 7 months ago

Maybe they should have blamed the Avatar. The pot smoking Elmo came into the conference room and everyone got high from second hand smoke. The idea sounded so great everyone said, “Dude!!” and the rest is history.

MSchechter
MSchechter
4 years 7 months ago

@ginidietrich It’s more than that. He is literally willing to anger his customers in the short term, but has earned their trust that it will bring a better future. Is he always right, no. Is his batting average damn good, hell yes.

Netflix is just running a business now, Apple is leading an industry.

EugeneFarber
4 years 7 months ago

@ginidietrich Haha, like I said…more coffee! That is really boring isn’t it? I think a Chipotle followed by a whole can of sweetened condensed milk would have been a better choice.

jasonkonopinski
4 years 7 months ago
@ginidietrich I’m not so sure. As active consumers with a marketing bent, I think we’re a bit hypersensitive to these corporate blunders. Yes, Netflix lost a million subscribers since they announced the split in subscriber plans, but I don’t give much stock (punny!) to their falling stock prices. It’ll likely rebound – and quickly. There aren’t any really viable alternatives to Netflix in terms of reach and size of catalog, but I suspect we’ll see Amazon and Zune ie court the content providers/distribution houses very aggressively in the coming months. Amazon has already demonstrated that they’re willing to roll the… Read more »
ginidietrich
ginidietrich
4 years 7 months ago

@FocusedWords You know, that probably is EXACTLY what happened! I could have saved myself an hour writing this morning if you’d said that earlier.

FocusedWords
FocusedWords
4 years 7 months ago

@MSchechter@ginidietrich “Netflix is just running a business now, Apple is leading an industry.” Therein lies the problem. The difference in how you perceive your company and the industry.

ginidietrich
ginidietrich
4 years 7 months ago

@MSchechter Amen.

jasonkonopinski
4 years 7 months ago

@ginidietrich Oh, the mental image that you’ve planned in my brain. :)

ginidietrich
ginidietrich
4 years 7 months ago

@EugeneFarber OK. NOW we’re talking! Although that just made me gag thinking about it.

ginidietrich
ginidietrich
4 years 7 months ago

@jasonkonopinski I was speaking more of the lost customers, in the comment, than the falling stock price. I agree it’ll rebound. But how do you regain a million customers?

TheJackB
4 years 7 months ago

It would be better if the humility felt sincere.

e.adam.quinn
e.adam.quinn
4 years 7 months ago
Netflix did announce that there would be a change in pricing structure over the summer (June or July maybe?). Plus, as stupid as this all is, look all the commotion it is causing. Which would be worse: Netflix creating a new brand and not having anyone catch on to it or the alternative which is now that most people on the Internet know what Qwikster is, whether it be in jest or not. I, for one, will continue using Netflix’s DVD option because I have no other options and it’s cheap. I will only switch to streaming when they are… Read more »
StoryAssistant
StoryAssistant
4 years 7 months ago

This was a classic post Gini! Having worked with some Netflix competitors it was especially entertaining:). Besides their transparency in the whole “situation”, I agree there wasn’t too much strategy or thought behind their actions. I suppose we’ll wait and see. Thanks for the entertaining post!

wabbitoid
4 years 7 months ago

I’ve been waiting for someone to explain to me, succinctly, what the Hell was going on at Netflix. I admit my sometimes-too-logical brain was utterly confoozed. Thank you. It really was as stupid as I feared.

Doesn’t anyone in the glittery-shiny online world think about strategy? (that is, now that Steve Jobs has gone). Doug the Dog from “Up” could run many of these companies about as effectively, at least until they … SQUIRREL!

jackielamp
jackielamp
4 years 7 months ago

I think the avatar is actually very appropriate for Netflix these days 😉

janbeery
4 years 7 months ago

Love this Gini! I was thinking so much of the same thing when I heard the story. This is so true!!!!!!

JayDolan
4 years 7 months ago

I want to hurt whoever came up with the name Qwikster.

Why didn’t they go with the obvious Mailflix?

TheJackB
4 years 7 months ago

P.S. I thought that this article a “streaming war” was interesting

http://money.cnn.com/2011/09/19/technology/netflix_cash/

TheJackB
4 years 7 months ago

P.S. I thought that this article a “streaming war” was interesting

http://money.cnn.com/2011/09/19/technology/netflix_cash/

TheJackB
4 years 7 months ago

P.S. I thought that this article a “streaming war” was interesting

http://money.cnn.com/2011/09/19/technology/netflix_cash/

TheJackB
4 years 7 months ago

P.S. I thought that this article a “streaming war” was interesting

http://money.cnn.com/2011/09/19/technology/netflix_cash/

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