Netflix Takes Some Heat on Social Media – But to What End?


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This week doesn’t mark the first time that Netflix subscribers have been up in arms. It also happened five years ago. That’s when the company disclosed that some customers had to wait for popular DVD titles longer than other customers.
The problem was that in the days before on-demand streaming video, heavy renters — those $17.99/month subscribers who ordered upwards of two dozen DVDs per month — were causing the company to lose money.

To deal with the problem, Netflix deployed a “throttling” algorithm to ensure that new and light renters received shipping priority over old and heavy renters. In essence, the service’s most ardent users were now forced to go to the back of the line.

A class-action lawsuit was filed. Netflix responded by revising its one-day-delivery-of-most-DVDs policy to explicitly state that certain customers do indeed receive preferential treatment, and they’ll continue to do so. End of story.

Of course, Netflix emerged from the controversy virtually unscathed. In fact, for the six years that followed, the company reigned as No. 1 in Foresee Results’ annual Top 100 Online Retailer Satisfaction Index customer satisfaction.

One wonders if things will be different this time around with the announcement of a 60 percent price increase. Throngs of users immediately rushed to Facebook, Twitter and other social networks to voice their fury. Tens of thousands of users “liked” the Netflix page only so that they would be able to add negative comments (many of which were just as quickly deleted; others of which were “liked” more than 5,000 times) while Facebook pages with names like “Cancel Netflix” and “I Unlike Netflix Today” spread like wildfire.

If people banning together and expressing their outrage on social media can help bring down entire government regimes, as we’ve seen in the Middle East, not to mention getting companies like Gap and Tropicana to change their logos and packaging design, can it also get a company to modify an unpopular pricing policy?

In this case, the answer is probably no – although Netflix does, of course, risk losing some of its 23 million-plus subscribers to competitive offerings. And social media may well play an instrumental role in fueling customer defection.

Regardless of the eventual outcome, venting on social media can be highly therapeutic. And for dismayed consumers, that may be the biggest benefit that comes of all the posting, liking, blogging and tweeting. Because while a great deal of control over a brand has indeed migrated to consumers in the past five years, consumers are still not in a position to call all the shots. In some cases, they may actually wield less influence than they think.

It’s something to keep in mind as you place your next movie order.

Republished with author's permission from original post.

Jeff Zabin
Jeff Zabin is research director at Starfleet Research, which benchmarks best practices in technology-enabled business initiatives, and CEO of Starfleet Media, the leading provider of content marketing programs tailored to meet the inbound marketing and lead generation needs of B2B companies in selected niche markets. A bestselling business author, he previously served as vice president and research fellow at Aberdeen Group.


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