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Lessons from Netflix: what not to do with social media

Please join us at GovDelivery’s event on Wednesday, October 19th, Social Media’s Role In Cost Effective Solutions.


If you’re in the US, you’ve no doubt heard the discontent over Netflix, which describes itself as “the world’s leading Internet subscription service for enjoying movies and TV shows.” They gained prominence over Blockbuster as a DVD-by-mail service and then solidified their status by offering streaming videos and shows directly to your television.

In July, Netflix restructured their pricing. There was an immediate uproar among their customers. Netflix customers took to social media channels, voicing their disapproval and discontent in huge numbers. In fact, the Netflix blog shows over 12,000 comments from their integrated Facebook feed. However, Netflix, as an organization that was founded and grew from the Internet, didn’t obey the number one rule of the social media: listen to the customer! Despite the outrage, Netflix stuck to its new pricing scheme, without any answers. They merely regurgitated the talking points their team developed, telling customers that this new pricing structure would save customers money, even if that was hard to explain. To that end, PCWorld estimates that Netflix has lost 1 million customers since their pricing changes.

The saga continued yesterday morning, with Netflix announcing the split between these two services as an organizational restructuring: their DVD-by-mail business is being branded Qwikster, with their Internet-streaming service remaining under the Netflix name. By the end of the day, countless articles had developed around Netflix’s next social media quandry: the Twitter handle for Qwikster is already taken – currently being used by a man whose avatar yesterday was a picture of Elmo holding a joint (he has since changed the image.) This is the prime example of Netflix violating the second rule of social media: don’t dismiss the power of social media. If anyone on Netflix’s restructuring, organizational, marketing, or product team had simply done a quick Internet search before they chose this name, they would have easily uncovered this issue prior to their rebranding effort. If social media is not an integral part of your communication efforts from the start, you could be in for more than one sleepless night.

I know what you’re thinking: what does this have to do with government communicators? As it turns out, a lot! Read more at Reach the Public: Lessons from Netflix: what not to do with social media.

Please join us at GovDelivery’s event on Wednesday, October 19th, Social Media’s Role In Cost Effective Solutions.

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14 Comments

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Profile Photo Ian Lucas

It seems that the link “Lessons from Netflix: what not to do with social media.” does not work, at least not on my Chrome browser! (Maybe that’s the lesson?)

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Profile Photo Christine Jung

You are right. They are not customer-focused. Their conversations are more with their investors, not customers. They want to show how profitable the streaming side is so they made a distinction between the two services by splitting it into two companies. Perhaps they know Qwiskster will die. Bottom line, Netflix doesn’t care about their customers.

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Profile Photo Joyce Chambers

The link doesn’t work for me, either. ” If anyone on GovLoop’s Blog, organizational, marketing, or product team had simply done a quick check before they posted this blog, they would have easily uncovered this issue prior to their posting.”

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Profile Photo Andrew Krzmarzick

I was listening 😉 ….and fixed the link.

And I just canceled my Netflix subscription. I wasn’t aware of the rate hike (must have missed the billing in August)…but a 67% increase without telling customers in advance is really, really bad business.

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Profile Photo Mary Yang

Ouch, Joyce. Thanks for letting me know. This was my first blog post on GovLoop, so I will fix that. That was the trackback link from Typepad and not the direct link to the post. Thanks to Chris for helping me out!

Best,

Mary

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Profile Photo Allison Primack

In a world where streaming movies and TV shows online for free, I was surprised that Netflix’s business was still doing as well as it had been. Raising prices was definitely a poor move for them.

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Profile Photo Meredith

In comparison to the the charges for access to the New York Times, I don’t find the rate hike all that terrible. For a service I use every day to stream movies and tv shows, I still think the prices are reasonable – far more reasonable the the cable bill, which I’m using less and less each day.

As a person who uses both of the services, I’m a little frustrated by the potential hassle of the split and might consider dropping the DVD-by-mail.

In general, people really don’t like change, and like recent changes to Facebook, every time there’s an change people are outraged. Doesn’t mean we shouldn’t change and continue to evolve. Communicating well on social media spaces doesn’t mean you’re going to roll back changes.

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Profile Photo Mary Yang

Meredith, you’re absolutely right – it’s still a much cheaper service than cable!

I just think Netflix as a company could have handled the PR around these changes better and showed that they were human in understanding why so many of their customers were upset. And to your point, the added hassle of two systems that don’t integrate, potentially two bills, two different customer service lines, etc., are reasons to drop one of the services if not both. In a technologically ripe era, I think it’s harder for me to understand (and thus, support) the notion of two independent systems. Maybe it’s a financial issue, but with so many areas of our lives trying to figure out how to integrate (healthcare reform, for instance) it’s interesting that they are choosing to develop distinct systems that don’t connect.

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Profile Photo Chris Poirier

I think the most important thing to learn here in communications is, “if you have to spend over 1000 words explaining why you did something, you already failed…” If you are defensive in your communications, this typically does not lend well to assuming people will follow you…in fact it shows a rather paranoid forward facing image that people “don’t get you” or you “don’t get your customer” all other issues aside..poor branding and having to defend that branding on day one = FAIL

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