Today Netflix CEO Reed Hastings sent an email to Netflix customers and posted this blog post explaining the reasoning behind the company’s recent price hike and apologizing for not communicating this earlier. In a nutshell, they are breaking off the DVD business to a whole separate company called…are you ready for this…Qwikster (for which they don’t even own the Twitter handle). The two sites will not be integrated the way streaming and DVD-only is now. IMHO, it’s a bad, bad move. I’ve written before about Netflix as a shining example of everything Blockbuster did wrong. With the latest moves Netflix is making, I’m afraid they’re heading down a path where I’ll have to eat my words. For the record, I get that there may be other factors at stake here that play into these odd decisions, e.g. licensing issues. But if that’s the case, come clean and explain that. (I wonder if the 19% drop in stock price last Thursday at the announcement of losing a million subscribers has anything to do with this announcement’s timing?)
Bad PR Adding to An Already Hurt Brand
It goes without saying the Netflix brand has been greatly damaged in the past few months since the price increase announcement. And based on the comments on their blog, and the fact that their stock is down 5% today as of this blog post, it seems like the brand is hurting even more. And as of now, I can’t imagine a world where a name like Qwikster will be good. (But, I also didn’t like the name DreamWorks when that studio started. So maybe it’ll grow on me). So, with all of this bad PR going on, what does Reed do? He makes a video to announce it. Okay. That’s great. Smart. Talk to the people. Let them see and hear you. But what I can’t for the life of me understand is why on God’s good green earth did they not foot the bill for a professional video? A message as important as this should have a well-polished, well thought-out, terrific looking video that makes me want to buy into their plan. Instead, they put up something that looks like it was shot this afternoon in their company’s outside food cafeteria, with poor audio (relatively speaking), and thrown together by some intern on FCPX.
They should take a queue from Apple. When Apple has to make a big announcement, they have a video to back it up and you know for darn sure their best PR pros in the company are making sure the people in the video are well-versed and well-spoken. If you’ve seen any of their product videos, you know what I’m talking. They’re simple, yet just like all Apple products, are designed elegantly with high production value. This video by Netflix is a mess and a further bad move. Here are three reasons why:
- Poor quality suggests lack of concern. If I do something to really piss my wife off, I don’t make up for it with with a crappy 99 cent card I picked on on the way back from a job. Something that feels like an afterthought. She wants to know that I really care and take the time to show it. This video is kind of like that crappy 99 cent card. It doesn’t even have Netflix branding intro or outro.
- Further damage to brand. A cheap video makes you look cheap and makes the brand look cheap. Nuff said about that.
- Lost opportunity. Video has the power to rally people and get them excited about a cause when it’s done right. Netflix missed an opportunity to use this medium in a powerful way that could have not only eased some of the anger about the price hike, but might have gotten folks at least more accepting of this change.