Netflix damaged their brand again today…twice.
First they sent out an email and posted on their blog that their mistake in separating their streaming and dvd services, and jacking up the price 60%, was only in the fact that they didn’t first educate their customers.
Second, their CEO, Reed Hastings, made a low-end video with another Netflix brass that further insults their customers by stating that they, “…think it will be great for us to have a separate brand, a separate website…” Therein lies the crux of the problem. Suddenly this apology, which was intended to appease those offended and angered by past mistakes, turned into something that sounds like, “We don’t care about you or how this inconveniences you at all. It’s good for us, so there.”
There is no doubt that streaming will become the standard for video delivery, dvds are going the way of vinyl records, and Netflix must evolve to remain relevant. Unfortunately, Netflix doesn't seem to have anybody in place who truly understands branding. Their brand is what their customers perceive it to be, and they keep doing things to antagonize their customers and make them angry.
The PR gaffes over the last couple of months are extremely damaging to their brand. People don’t want to pay 60% more for the same service. People don’t want to go to 2 websites to fulfill a need previously fulfilled by a 1-stop-shop. People don’t want to pay extra for 3rd rate streaming content.
I know that the Netflix name lends itself better to online delivery, but dvd delivery is the current Netflix brand. It would be easier to eventually transition all customers to the inevitable exclusive online service by keeping the dvd customers close and tight, not carelessly casting them off. How about the glaring oversight of the @Qwikster Twitter username currently being held by a foul-mouthed, pot-smoking Elmo character?
Who is running Netflix’s PR/marketing machine? How are they keeping their jobs through this colossal brand breach? No, Hastings' video doesn’t help. It proves that the Netflix brass have lost touch with what made them great in the first place, curing a customer pain point, (late fees and physical trips to the rental store.)
I am a long-time Netflix customer. I emailed back and forth with Hastings many years ago when I was frustrated that it was taking 10-days to receive a replacement movie, and he convinced me to hang in there because they were soon rolling out nation-wide distribution centers. Unfortunately even I’m scouting my alternative options now. Amazon’s free online delivery via their Prime subscription is looking better and better.
Netflix is killing their brand. So sad, so sad.