Netflix Got A Beatdown
Netflix, the most popular video rental and streaming company in the US just got a cold slap in the face as almost a million of its members canceled their subscriptions due to the company’s higher rates.
It was long in coming as Netflix had been getting on people’s nerves and bad side all year. They had decided in the summer to separate their subscription fees so that members would have to pay for both streaming and rentals separately. That boosted the prices up and that was the last straw for many. Netflix had been in trouble for many small troublesome situations that the public just wasn’t going to stand for anymore.
What happened was something no one had expected except the customers who had been using social networking to communicate. En masse the customers left Netflix to the point the company didn’t realize what was going on until it was too late. This is a turning point for corporations who underestimate the resolve of their customers. With the internet and social networking, customers were able to rally themselves together, address their grievances and formulate a battle plan to get the company to finally realize the customer isn’t to be toyed with.
The ramifications are serious. Netflix stocks dropped like a rock and revenue took a major hit. Deals with the major movie companies and studios may get stopped as no one wants to work with a company that can’t keep its customers happy. Realize what’s going on here. Netflix got large because it beat out Blockbuster. Blockbuster didn’t meet the needs and wants of its customers and the next thing you know Netflix scooped up the business and became the big kid on the block. Netflix was on top of the heap by getting DVDs to people almost overnight. People loved it and sure enough Netflix almost put Blockbuster out of business.
All was fine until Netflix must have run into the typical thing that ruins a company: Suits.
The Suits, investors or investor representatives saw a way to use the old exploitation of the public and pushed for that exploitation. However, they got a hard lesson in life when the people fought back. The shockwaves are now going through the business world as the stockholders are now looking at astounding losses, all because someone got greedy.
It’s these kinds of practices, angering the public, trying to milk the customer for all their worth. That has proven to be an almost fatal business mistake and it will take a lot to bring those customers back.
Now Netflix has to remedy the damage as well as the streaming problem. Netflix will let one part of a movie, say Lord of the Rings be available for streaming, however, if a customer wants to see the entire LOTR series they have to order the DVDs meaning getting the subscription to DVDs. One used to be able to have both for one price but then Netflix separated the two. That just angered too many customers and that and a combination of other things really put the company in a crash dive.
Let this be a lesson to companies around the world, if you get caught fixing the game again you’ll lose your customers, profits, and lead.
Social networking is kicking greed’s butt.
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