Monday, July 18, 2011

How Not To Do Social by Netflix

How Not To Do Social Media by Netflix

This summer Netflix announced they would be restructuring their pricing plan, raising prices by 60% for those customers who have both the streaming media and DVDs by mail plan. In a breezy blog post from Netflix VP of Marketing Jessie Becker, they explain the pricing increase as follows:

“Why the changes? Our selection of TV episodes and movies available to stream has grown dramatically, and as a result most members want us to deliver unlimited TV episodes and movies two ways: streaming instantly over the internet plus DVDs by mail. The price increase will allow us to continue to offer the popular plan choice of unlimited TV episodes and movies streaming instantly along with unlimited DVDs.”

What Netflix failed to mention, or perhaps notice, was a) the majority of their customers use the DVD option (approximately 80% according to Tony Wible, an analyst with Janney Capital Markets) and b) their streaming media library is limited. For example, a customer can watch all the episodes of seasons 1-4 of Psych via streaming, but the final season is only available via DVD.

No Comment is Unacceptable in Social

Customer reaction on social media was immediate and deafening. Once highly popular with its 22.3 million customers, Netflix saw firsthand what happens when a brand comes under attack via social. Comments on Ms. Becker’s blog post exceeded the 5,000 maximum in the first day and they ranged in tone from disgust and anger to expletive-filled rants. Comments like this one were everywhere:

In this economy, you opt to increase the price for my current subscription by this much? Well hey, guess what? Unless you seriously upgrade and update your streaming content, you'll be losing a long-term customer. And I'm sure I won't be the only one!

Contrary to social media rules of engagement, Netflix both deleted comments and did not respond to comments. Nothing. Nada. The sound of crickets.

On their Facebook page, it was more of the same, with nearly 70,000 comments along the lines of:

Dear Netflix,
After 3 years, I'm sorry but it's over. If I switch to Blockbuster I will have a greater streaming selection, with newer movies, plus games, and it will cost me only 75% of your new rates. It’s been great, but it’s over. It's not us, it’s you. Enjoy the bankruptcy.

Again Netflix responded by deleting comments. Customers took it as a challenge, and began posting the CEO Reed Hastings’ email address. The comments kept coming, apparently faster than Netflix could delete them. And still no response.

On Twitter, Netflix became a trending topic. Tweets were flying like “Dear Netflix: Are you trying to save Blockbuster?" and “Netflix customers see red after price hike (via @cnn).” Still nothing from Netflix.

Losing Sight of Your Customer Base

In the meantime, Netflix stock prices rose and fell as the market tried to figure out what would happen. Blockbuster jumped on the bandwagon by touting lowered prices to the media and customers. And Redbox looked more and more like the way to go.

Surely Netflix will survive, but their brand has been tarnished. As one angry customer posted on their Facebook page,

How sad that after years of holding a subscription and being a walking advertisement for Netflix, that we are stopping the use of your services. Greedy, greedy, greedy. Way to show your long term customers, who helped pave the way for your extreme success with a higher price. BRAVO to whoever had this brilliant idea. Goodbye Netflix, HELLO REDBOX!

In stark contrast that same week, another brand stood out as a shining example of how social media should be done. Actress Mila Kunis, star of Friends With Benefits, accepted a YouTube invitation to the Marine Corps ball from a soldier stationed in Afghanistan. The video, posted by Sgt Scott Moore with 3rd Battalion 2nd Marines, received 3,246,366 views in the first week.

When you are fortunate enough to have customers who are “a walking advertisement” for your brand, it pays to engage and respond to them on social media sites. Take note from the mistakes of Netflix.

1 comment:

  1. If I come back here one more time and see the Netflix post...!! :) Hope you have some more stories to share. I miss talking to everyone in person!!