Erin Everhart / Marketing / July 14th, 2011

How Netflix Failed At Social Media

If you’re a Netflix user, or just anyone who kinda sorta likes movies, you’ve likely heard about the 60% increase coming your way if you plan to keep streaming your movies online and getting DVDs at home. Personal grievances aside, what’s most alarming is the complete ambivalence Netflix is showing to their customers on their social media accounts.

While their fans have been all a-flurry protesting the price hike, Netflix has sat idly by, not even giving the slightest acknowledgement of the outcry. In the more than 66,000 (mostly negative) comments on their Facebook post, the more than 5,000 (mostly negative) comments on their blog, and the (mostly negative) #DearNetflix hashtag getting a new hit almost every five minutes, Netflix has remained tight-lipped. No “we understand.” No explanation. Nothing.

It could be that they’re still figuring out how to address the masses, but in an instant world, businesses can’t wait 3 days to respond to their customers. So any apology that surfaces now I suspect will not be greeted with open arms by their patrons. In case you haven’t learned from prior faux pas, these things don’t just go away with time. If you upset your customers and they’re taking the time to let you know, you need to take to the time to address them. Have companies learned nothing from Gap? From Kenneth Cole? We all know that Tuesday’s posts announcing the price increase isn’t going to be their last post on social media ever, so what could they possibly say to follow up?

But Netflix isn’t the only TV/movie provider that fell short on social media this week. If Blockbuster had kept their ears to the ground, then they would have capitalized on their biggest competitor’s biggest misstep. When GoDaddy CEO Bob Parsons’ publicized killing an African elephant for sport, causing a flurry of angered Web users, other Web hosting companies jumped on the chance to (successfully) steal away customers by offering discounts for domain transfers and even charitable donations for every new domain purchased. So, we ask you Blockbuster, why didn’t you follow suit and discount your online streaming and DVD option for anyone who switches from Netflix to you?

UPDATE (7/15/2011 at 2:17 p.m.) Blockbuster has acted and hopes to take away some of the Netflix users by offering a 30-day free trial, but after that 30 days, they’ll have to pay $2 more than they would at Netflix. Is that enough for you to make the switch? (Thanks to Will for letting us know about this.)

What do you think? Would Netflix have saved a few customers if they just acknowledged their fans’ frustrations on Facebook and Twitter?

  • Pete

    I think the bigger problem is the content on streaming sucks. If it was a 1:1 in terms of content I think it makes sense to push people to streaming only but it isn’t.

  • Daniel

    Great article Erin. What is it with these companies? Do they not understand the web?

  • Brandon

    The streaming content is a good library, but the worst part atm is the new scrollable design that makes things almost unusable. No more sorting of items or quick access to ratings of all the titles you are seeing on the screen.@@DOUBLE@@I’ve found that I watch more TV on Netflix in the past 6 months than movies. Having full series on their alongside some decent, older films I haven’t seen is perfect for me. Ya, that’s just like Hulu Plus, but I prefer Netflix’s selection of British TV.

  • Joy

    They should have anticipated this outcry and prepared a response ahead of time. I find it hard to believe that they didn’t think that anyone would complain about a 60% hike in an economy like today. They should be offering different benefits for using one or the other or allowed some people to stay where they are but maybe with some restrictions. They didn’t provide any options or offer any alternatives. I say all this because I am a Netflix customer and I am bitter about the hike…@@DOUBLE@@BUT considering that they could be viewed as a competitor to a cable or satellite company, they raise rates and don’t have to justify it at all. They just risk customers going somewhere else. So, while we don’t have a true competitor to go to…we do have a choice…

  • Will

    Interesting article!@@DOUBLE@@I think Netflix is very much in a "don’t bite the hand that feeds you" scenario at the moment. They had grossly underestimated the number of instant users and as a result they exceeded their cap with Sony and to a lesser extent Starz. Their total cost of licensing is expected to go from $192 million to over $1.3 billion over the next year, and the cost difference will have to come from somewhere. Unfortunately, their options are only to come out and say "the studios forced our hand by charging us a lot more money" which would certainly rub their content providers the wrong way, or they can remain silent and let it blow over. Neither situation gives them a lot of good publicity and either solution is going to make somebody angry.@@DOUBLE@@Blockbuster is offering a 30-day free trial on their DVD service to anyone who can prove that the are a Netflix customer which will run to Sept. 15.

  • Bill Van Rysdam

    You raise some great points. It’s almost too late to try to respond at this point. I have to wonder if lawyers are involved. I understand the role they play in something like this, but sticking your head in the sand is not a sound policy. It does go to show you the importance of having a “Response Plan” before the #$%! hits the fan.

  • Erin – Marketing

    Thanks Will! But a 30-day free trial but then you have to pay $2 more than you would for Netflix? I don’t think that’s going to be enough to sweeten the pot. @@DOUBLE@@I think even saying that studios are requiring them to pay more is better than saying nothing. You have to give people an explanation. I think it all is a matter of the way they word it. They can’t thrive without their content providers but they’re not going to be able to do much without any people watching their stuff.

  • Kim White

    Wow. I was just thinking yesterday that maybe it was time to sign up for Netflix and then I see this! I’ll wait now. @@DOUBLE@@The problem for me as a potential customer is that I don’t know if they’re just bad at social media or if they’re bad at ‘voice of the customer’ in general. If they don’t care what customers think/want I don’t want to do business with them.

  • Will

    I agree that as far as offers go, Blockbuster’s effort is lack-luster at best. They lost countless customers after shutting down their stores that just didn’t make the transition online, and worse still consumers lost confidence in the Blockbuster brand after they filed for bankruptcy. It seems a certainty that they will look back and realize that they missed a large opportunity- especially when the increasing cost of content is pushed to their doorstep as well.@@DOUBLE@@I think you’re right that saying nothing is the greater of two evils, and unfortunately I agree that it is probably too late for them to say anything, regardless of their reasoning, that will be received as anything other than an excuse. I think the price hike was certainly justified, and probably long over due, but they certainly could have spent some more time preparing a strategy to keep their largely tech savvy customer base from feeling betrayed.

  • Shana

    what sucks is I already paid a lot for netflix, 3 dvds out at a time with blu ray upgrade. This will increase the price to almost 30 and I live overseas so I can’t even use the streaming without a vpn. Not to mention it takes 2 weeks to exchange movies through an APO. It had advantages when I lived in a 3rd world country, now living in the UK, it really is pointless. I was thinking about cancelling and this will probably motivate me to do so. I’ll check out lovefilm and see if it’s as good as netflix.