technology doesn't solve problems, people do
One of my clients sent me this link to a very creative and useful reminder of how the web has evolved – especially in the interaction between browsers and various web technologies. I’d like to see them add the social element in as well in the next edition…
On Wednesday, Netflix raised prices from 25% to 60%, setting off a tweetstorm of protests from consumers, with many threatening to cancel their subscriptions.
So first a couple of comments on what they did, before I address how they did it and my personal response.
Although there is a lot of speculation on why Netflix leadership felt the need to impose such a high percentage increase, we really don’t know, and it really doesn’t matter. Netflix is entirely within its rights to raise prices. And it is a legitimate decision. I once led a consulting project for a bank where we helped their small business customers understand the impact of a price increase on their bottom line and what percentage of customers they could afford to lose and still be more profitable. It is quite an eye-opening experience that I highly recommend.
At the same time the consumers are entirely within their rights to protest the increase and/or cancel their subscriptions. This is the market responding – and what the market says isn’t always what the market does. Financially, Netflix could still walk away with increased profitability. I doubt they’ll walk away with increased good will.
The above quote comes directly from Brad Berens’ insightful post on the same topic. If you read the post announcing this price increase, you can practically smell the condescension and marketing speak. No honest explanation, no humility, no “we know we’ll lose some of you and are sorry to see you go.” It’s almost as bad as the CEO, Reed Hastings’ ill advised NYT’s op-ed piece from 2009 bragging about the “eye-popping amount of money” he is paid and pleading for higher taxes.
Then, when the backlash begins, the entire company collectively sticks its head in the sand. I predict that this is going to inspire dozens of “How not to do social media” case studies within weeks if not days.
“Dear Netflix” is a trending meme on Twitter and there are over 11k comments on Facebook and 5000 comments responding to their blog announcement. It’s been over 48 hours, and there hasn’t been a public response to the backlash on any social media outlet I can find. The last tweet was at 10:22 July 12 announcing the price increase.
In today’s WSJ, Steve Swasey
… a Netflix spokesman, said the company isn’t surprised by customers’ reaction, though he argues the service is still a good deal even with the price increase. “We anticipated hearing from members about their concerns,” he said.
Really? You anticipated this?
Despite his protests to the contrary, these guys clearly did not see this coming and 48 hours late still don’t have a plan to address it. They did do two smart things however.
The first was not turn off the comments. I’m not sure if that is an insightful approach to making sure they receive unfiltered feedback from their consumers, or just a byproduct of having too much sand in their ears. I have my suspicions, but either way it was the right thing to do.
The second thing they did was to make the price increase effective after September 1 for existing customers. There will be some percentage of customers that will wait to cancel their services (since they don’t allow pro-rated refunds) and forget to do so before the deadline. Not sure it’s a good customer service move, but it will probably help them save a few dollars.
After reflection, maybe one of those is just dumb luck and the other is just calculating. Time will tell.
I’ve been a Netflix customer for years; since shortly after they opened. Often with 2 DVD’s gathering dust for months on top of my VCR. I thought for a while that I would wait and see if there was a rollback on this decision before deciding if I would cancel or not. However, to Brad’s point, upon examining the value I receive vs. what I pay for, I’ll be canceling my account just as soon as this month is out. I already pay for Xfinity, HBO, and Amazon Prime and I barely use Netflix.
Thanks Netflix! Now that you’ve brought it to my attention, I can use that $180 a year somewhere else!
Wow. The sheer lack of respect. I’m not astounded that Disney pulled this stunt, but I am astounded that those in charge of the trademark office don’t have the common sense to reject this out of hand on the basis of well, sheer common sense. WTF!?
Some congresscritter should take the reform of the trademarks as well as the patent office on as a cause. There is enough screwed up stuff in both cases to make a career.
In a perfect example of a big media company looking to capitalize on current events, The Walt Disney Company has trademarked “Seal Team 6,” which also happens to be the name of the elite special forces team that killed Osama Bin Laden.
The trademark applications came on May 3rd, two days after the operation that killed Bin Laden… and two days after “Seal Team 6″ was included in thousands of news articles and TV programs focusing on the operation.
Disney’s trademark applications for “Seal Team 6″ cover clothing, footwear, headwear, toys, games and “entertainment and education services,” among other things. more…
I hope the Navy sues Disney and wins.
I spent yesterday at the Social-Loco conference enjoying listening industry luminaries and the technorati discuss the current and future state of social location services and their impact on our lives.
From dozens of ad-hoc recommendations from Robert Scoble to two new product announcements from Marrisa Mayer of Google, it was easy to get lost in the deluge of information, perspectives, and opinions.
In thinking about the energy and optimism that saturated the room, I found myself reflecting on why I believe most people spend the money and time to attend conferences. Most people that I talk claim to go to conferences for one of two reasons: Information and/or networking.
I think there is a third reason to go. Even if I don’t learn anything or meet anyone new, just being in the presence of so many ideas and competing opinions gives rise to new ideas and new ways of looking at my industry, business, and client opportunities.
Kudos to ConvergeLabs for putting on a relevant conference that fills an interesting gap in the “So-Lo-Mo” space. The news and posts that the event spawned are numerous and wide ranging.
Thomas Clabum of Information Week leveraged the conference announcements to address Google’s social strategy
As did Ben Parr of Mashable. (His post had garnered over 1300 tweets as of this morning.)
Ronnie Kerr summarized and put in perspective the lack of “check-in” mentions at the conference
I thoroughly enjoyed the interactions, seeing old friends and making new ones. I also enjoyed the information both from the stage and from the vendors. But most of all I enjoyed the energy and left with some new ideas, insights, and solutions.
Tom Foremski takes issue with financial bias in reporting – particularly in regard to start-up coverage. In his opinion, “The only acceptable bias is a thirst for a great story and selecting the best startups to write about.” Notwithstanding the fact that we all bring bias to virtually everything we do, I agree with Tom on this issue: Financial bias tends to override even relationships.
Media coverage is very important for startups. It is how they gain respect in their community, it is how they can win investors, and it is invaluable in helping to recruit staff.
Positive media coverage will also help gain users of their products and services, providing valuable marketing services that could cost tens of thousands of dollars.
But the only reason media coverage of a startup and their product is valuable is that the media coverage is seen as a neutral third party — it has no financial bias in its reporting.
Continue reading here…
