How Netflix went from winner to loser

Once upon a time, there was a really, really successful startup--which means that though it's still pretty small, it had a skyrocketing stock price.  And it was doing really well--in a recession!  Awesome, Netflix!

Alas, something happened.  Netflix thought it could always do better.  (There's nothing like the sight of lots of money to make someone want much more money.)  So it made this decision: it pulled the rug out of its customer base by forcing them to pay way more for the service!  In a recession!  Not so awesome, Netflix.


Netflix wasn't stupid; it knew that lots of its customers would leave.  But, alas, more of them left than Netflix expected.  So its wonderful stock price went down. 


But Netflix didn't give up!  No, it sent an e-mail to all of its customers  It even sounded like an apology! How PR of Netflix!

Dear Victoria L,

I messed up. I owe you an explanation.

It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming and the price changes. That was certainly not our intent, and I offer my sincere apology.

Oh, if only Netflix had actually followed through with "respect and humility".  Alas, the rest of the e-mail was spent explaining that because of some operational considerations that Netflix's customers don't even begin to give a damn about, in order to make even more money, Netflix had decided to pxxx off, (sorry children, "disappoint"), all of its remaining customers by spinning off the DVD half of its service into a different company with a goofy new name, Qwikster, thus undoing the whole convenience aspect of its brand promise. 

At the end of the e-mail, Nertflix followed the PR rule book and invited comment.  And boy, did Netflix get it--much of it not respectful. Kaboom.


In my crystal ball, I see what will happen to Netflix.  It will be trounced by its  vastly larger competitors--Amazon is the smallest of them.  To prevent the receipt of yet another self-absorbed "apology", it will be unsubscribed by many, many people who used to send it money every month.  Eventually Netflix will be bought by one of its massive competitors, but for much less money.


Moral of the story:  In the age of social media, why do brands go from winner to loser?  Because they act like a jerk.  Oh ye companies, hark unto me:  you make money because people choose to give it to you.  So don't p-, um...  "disappoint" them.