It turns out that I was wrong! Netflix does allow for customers to respond to their blog. I discovered this when ascertaining who was the go to person when Netflix has a crisis. If you go to http://blog.netflix.com/2010/09/we-blew-it.html you find a blog by Steve Swasey, the VP of corporate communications writing about some incident that happened during the launch of Netflix in Canada. There are comments following his mea culpa and an opportunity for you to enter comments as well.
So I apologize for my previous posts where I thought Netflix was pure Web 1.0 and lacked collaboration. However, it did take me five weeks before I stumbled across this post that allowed repartees and there are still no ‘comments’ on the main Netflix blog page (can you find it?).
In the midst of crisis what’s a Netflix to do? Well, this past summer they had three crises that affected two large groups of stakeholders: their customers and their shareholders. Here’s what happened 1. they doubled their price with very little, if any, warning to customers; 2. they introduced and then quickly withdrew a ‘new’ service called Quikster which was supposed to handle all DVD accounts; and 3. they lost new media content when negotiations to renew their contract with Starz Entertainment failed.
 |
| Image from: http://prestigeagency.wordpress.com/2011/10/21/can-netflix-save-itself/ |
If you look at my first blog you will see what kind of pounding Netflix stock took on the heels of these events. They went from a 52 week high of $304.79 to $79.40 on October 26, 2011. They also lost over 800,000 subscribers. I believe that qualifies as a crisis in anyone’s book. So how did Netflix respond?
As I suspected the CEO, Reed Hastings, was the most visible spokesperson on behalf of Netflix. On September 7, 2011 he was the point person who addressed Netflix’s response to losing the Starz Entertainment account on CNNMoney. You can watch that here. After losing more subscribers than expected again it was Reed Hastings who made a conference call to investors to whom he owned up to making mistakes in the way they raised prices and in the ill conceived and short-lived ‘Quikster’ service. (read more)
It would appear that the strategies in place at Netflix to address crises is to allow Mr. Hastings to be the public face of Netflix while Mr. Swasey, and others, work the blogs behind the more public scenes. But that’s how Netflix responds to customers and investors. What about Big Brother? The US gov?
According to a report in The Hollywood Reporter (December 1, 2011) Netflix has just hired a former Skype executive to head global government relations. His name is Christopher Libertelli and he’ll be replacing Michael Drobac. (see the Hollywood Reporter story here). This is a very shrewd move on Netflix’s part as Mr. Libertelli is the former legal advisor to the chairman of the FCC.
I really believe that for crisis communications to be as effective as possible it is crucial that a response be made immediately, that culpability be honestly and forthrightly addressed, corrective steps (or restitution) be laid out plainly, and a clear vision of planning for the future beyond the crisis be stated as briefly as possible.
For the most part Netflix’s crisis strategies are pretty much on target. Through Mr. Hastings they made clear that mistakes were made and customers were taken for granted. This was done on the web and on various 24/7 financial and news programs. The only place where their strategy stumbled was in response time. They could have gotten out ahead of this story a bit quicker. Mr. Hastings expressed confidence that the content lost from Starz would be replaced by March of 2012. However, Netflix did stand its ground on the price increase.
It’s been a little over five months since the Netflix crises of summer. Judging from today’s stock price (December 2, 2011) of $66.63 (a new low) it would appear that significant damage has been done to this company and stakeholder confidence has been difficult to restore.
So what do you think? Did Netflix faithfully communicate through these crises? Or did their method of communication only add to the crises?
With regard to your final question, I am afraid the numbers speak for themselves (and for Netflix). Not a good job.
ReplyDeleteOn the other hand, you have done a good job of applying the principles we've been discussing in class to "live" crisis situations. Nice work.
Love the intro! As Widner said, "When you make a mistake - own up to it, and say you're sorry." *thumbs up*
ReplyDeleteOf course, I do think Netflix seems too busy thinking of how to grow their business that they've forgotten their subscribers.
If it took you that long to find the customer response section of their blog, they might as well not have one; the response section should be easily seen and used to be useful for corporate relation purposes.
ReplyDelete