Back in December of 1999 I made my first big purchase on the Internet. I spent many days researching, reading reviews, calling customer support services, and finally I decided on my purchase: I bought a DVD player! And one of the first things I did was sign up for this new company called Neflix.
I loved Netflix. I could just sit at home and movies would get delivered right to me! I would never have to go to the video rental store again. That made me really happy because for some reason when ever I went to look at movies and rent one I would have to go to the bathroom like you wouldn’t believe. Many times I came close to wetting my pants. Not sure why it would always happen when looking for movies to rent.
Anyway, Netflix was awesome and I have been a happy customer ever since. In many ways I am probably their best customer because I usually will get a DVD in the mail and it will just sit in my house for months before I get around to returning it. I do like their streaming service and do wish I could just drop the DVDs and go strictly streaming but there are too many movies and shows that aren’t available on streaming.
This past summer Netflix announced they would be splitting the DVD and streaming subscription fees and ultimately it would cost nearly everyone an extra couple bucks a month. I am guessing they weren’t expecting the outrage people would have over an extra dollar or two but since they have lost tons of subscribers and their stock has plummeted. Why did they do this? Not sure but you can see one explanation here.
Earlier today Netflix sent out an email and apology explaining that they would be renaming and rebranding their DVD service into Qwikster. Do they really think this will help? How is this an apology for hurting their subscriber base? Is this the damage control they needed?
In the past many companies have screwed up, done their damage control, and come out the other side stronger than they were before. There is still time for Netflix to do this. Here are a couple suggestions:
1. Say they were stupid and go back to the way things were. This probably won’t happen. I think they see the DVD side of things dying off and splitting the company like this makes it easier to totally kill it off in a few years.
2. Announce a major deal that will provide new streaming content. Every time my wife and I look on Netflix instant for a decent movie to watch we are usually disappointed. If they really want their streaming service to take over for the DVD side of things they need more and better conent. A big announcement with one of the major studios would go a long way in making customers happy again.
3. Some big PR move is necessary. One idea I had: Spend a few bucks and hire some celebrities to hand deliver DVDs to some customers. They have all their users watching history so it wouldn’t be too hard for them to figure out who are the favorite actors and actresses of their customers. My wife and I have been rewatching Friday Night Lights. How cool would it be if Coach Taylor delivered a disc to my door and gave me a pep talk? Maybe someone has been watching The Big Lebowski a dozen times. Wouldn’t Walter showing up to your door, delivering a movie, and then taking you bowling be awesome? Something like this would generate a TON of good press for Netflix when they need it.
Anyway, when companies like Netflix make some strategic errors like this they need to take the steps to make it right. They can’t just send out a meaningless apology letter and think everything will be OK. BTW, their stock dropped nearly 12 points today. I am sure that has a lot to do with this lame apology. Come on Netflix. You can do better than this!
And just for the record, I am not mad they decided to split everything up. Just a bit frustrated in how they are handling the fallout. They have had and still do provide a great service. Too many people are getting too riled up over this. In reality a month of Netflix costs much less than visiting the movie theater once.