The management of Netflix is making one gaffe after another - the most recent one coming with Reid Hastings’ announcement on Monday that the company is being split in two. Netflix will handle all streaming content, while Qwikster will handle the fading DVD-by-mail business.
I first blogged in July about Netflix’ price increase that had customers up in arms, and then just last week when the company announced that it would lose 1 million subscribers this quarter. The customer outcry from the July pricing announcement, however, pales in comparison to customer reaction yesterday.
Over 20,000 followers of San Francisco broadcaster KRON logged into Facebook to comment on Netflix/Qwikster. The majority of comments expressed anger and outrage. Then, there were the more reasoned criticisms, like those on Mashable and Entertainment Weekly.
Reid Hastings’ YouTube apology is not cutting it. Customers - not all of them, but enough of them to create a real headache - are feeling like they’ve been fleeced.
Clayton Christensen’s book, The Innovator’s Dilemma, postulates that otherwise good companies can falter when disruptive technologies emerge. They place too great an emphasis on satisfying customers’ current needs, rather than helping their customers adapt to the new technology.
Netflix management is likely quite familiar with Christensen’s work - too bad they didn’t interpret his advice as it was intended. The company is in a real bind. It cannot retreat. Yet, its moves to guide customers along the streaming pathway seem only to serve to disenfranchise many of the loyal ones.
Messier times lie ahead for Netflix. If there’s a bright lining to this cloud, then it is in the offices of Google, Apple and Amazon.
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