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How-Not-To: Divide and Destroy the Netflix Way

We’re big Netflix users. Instead of watching streaming movies this week, I’ve been watching the Netflix debacle unfold.

Recently, we decided to go with the flow and eliminate the DVDs from our roster and go exclusively with streaming. Why? Because we were forced to make a choice. I also resented that red envelope sitting for days unopened -mocking me. We’re we ever going to watch that movie between our Sci-Fi shows phasing in and our art shows phasing out? Still, it sat there. I’m sure you can relate.

Meanwhile, we purchased Apple TV, another $100 step toward the Jetson age. Downloading the Apple Remote for our iPads, we’re able to scroll through absolutely everything: Internet, TV, iTunes movies, Netflix, you name it. It’s a breeze and I’m squealing with delight.

Side Note: One night I wasn’t feeling so well and decided to get reacquainted with the first season of Eureka. If you love sci-fi and have never seen it, go pop yourself some popcorn -it’s a delightful collage of impossibilities of time travel, planetary adventures, and inspired food all experienced through adorable rocket scientists. Oh yah, and a house named Sarah. Naturally, I had to encourage Andrew to sit and watch the first two seasons with me over the course of the next two weeks.

When Andrew was teaching me how to move through Apple TV, we were working inside Netflix and discovered that my instant queue had disappeared. Where were my instant queue movies? They were replaced with movies we were never inclined to watch. This leads me to…

Netflix Snafu #1: Don’t tell your customers about upcoming Changes

“Hey! Who Took the Movies from my Instant Queue? That’s the email I woke up to this morning from a friend. Oops.” ~Reed

Oops? I expect this blunder from a small business because they so much on their plate with very few hands to manage –I don’t expect it from a leader in a multi-million dollar business.

Hint: Customers are more empathetic to small business than they are big business. Hiccups will occur, just try not to let it happen more often than not.

“We didn’t really remove any titles from the instant Queue, but I didn’t explain what we did, so it looks like some titles are gone.” ~Reed

So instead of alerting you of this, we decided to let you go bonkers for an hour or two alone, in your house, while you’re under the weather.

Instead: Why not a quick note on the queue page that links from a “Why are some of my movies missing?” to your blog post? Sure, it’s a bit inconvenient but at least I would know why and not freak out.

Hint: Always be thinking about how to inform your customers as well as the frequency. Even a blog post before it happens is better than a well-constructed formalized announcement from the CEO that takes hours, even days to format and approve.

Why did we do this? We heard from our members that the list of unavailable titles complicates use of the instant Queue. And given the dynamic nature of our catalog that list can get long over time. So this change is intended to make the instant Queue easier to manage – by removing the inactive titles. ~Reed

Instead: Why not put an icon next to the title or gray out the title to indicate that the movie is unavailable?

Eroding Customer Confidence
Many customers are angry at the thought of taking one problem and turning it into two. With too many streaming movies becoming unavailable and now the inability to keep track of them to add them to the DVD queue. Additionally, by virtually removing the titles doesn’t free up the 500 title queue, it just cloaks it preventing anyone to add a title maxed to their Instant Queue. Such a big violation of our trust.

At the end of the blog post, there was no hint of empathy or “We’re sorry for the inconvenience this may have cause you.”

At the very least, feign sympathy, it does a business good.

Netflix Snafu #2: Brandchasm

A disingenuous note was posted on Netflix site today. They attempted to explain how splitting DVD rentals from streaming is a good thing for the customer. Really? It gets better: Against the betterment of customer satisfaction, Netflix will divide the DVD and streaming into two companies.

“The Netflix red envelope has always been a source of joy.” ~Reed

For us, too. With this divide and destroy mentality, Netflix will now become the source of unenjoyment.

Running a company would be great if it wasn’t for the customer

Netflix also mutilated it’s own branding by severing the service that worked seamlessly for the customer. But it’s not about us, is it? We knew that if a movie was available on DVD and not available as instant streaming, then we had a choice. Today that choice has been erased. Another violation of our trust.

So we realized that streaming and DVD by mail are becoming two quite different businesses, with very different cost structures, different benefits that need to be marketed differently, and we need to let each grow and operate independently. It’s hard for me to write this after over 10 years of mailing DVDs with pride, but we think it is necessary and best: In a few weeks, we will rename our DVD by mail service to “Qwikster”. ~Reed

Bleck! Qwikster? Really? This is bad on so many levels.

Hint: If you want to augment your business, keep it under the same umbrella and adjust the nomenclature accordingly. In this case: Netflix Streaming & Netflix DVD Rentals. Still…

Instead: Why not just blend the two business models and create a paid tiered structure? The cable companies have tiered structures and have had them for years. It’s a successful business model in every capacity.

Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us) because they are afraid to hurt their initial business. Eventually these companies realize their error of not focusing enough on the new thing, and then the company fights desperately and hopelessly to recover. ~Reed

Hint: Comparing apples to oranges is never a successful analogy, specially ones that are out of sync with your own position. In this case, it’s not about chasing the next big thing but customer retention with the products and services that you do have.

Unfortunately, the note did more to underscore the needs of the company and boost their arrogant anticipation of rising stock prices (due to the split). Their brand loyalty has now fallen into the chasm of marked disruption of service and continuity while they secretly charge customers for both services. Another violation of our trust.

Each website will be focused on just one thing (DVDs or streaming) and will be even easier to use. A negative of the renaming and separation is that the Qwikster.com and Netflix.com websites will not be integrated. So if you subscribe to both services, and if you need to change your credit card or email address, you would need to do it in two places. Similarly, if you rate or review a movie on Qwikster, it doesn’t show up on Netflix, and vice-versa. ~Reed

I know this looks like it’s timely, it’s not. It’s after the fact. Also, this explanation does not belong in a blog posting diatribe.

Instead: Treat this information as sacred. It belongs on it’s own page describing features, benefits, and the differences therein.

Hint: If you’re the only one in the market leading, stay there. Having a unified and blended service can and will satisfy the needs of most home video customers. This not only provides intangible value for the customer, but should be your biggest priority. Unless, we smell a sale…

We will never have the opportunity to review DVD and streaming together again on Netflix. Two separate lists prevent syncing and cost loads of time for the customer. Another violation of our trust. Wake the customer by lost functionality and you’ll find less customers to screw over. Wake the competition and you’ll discover lost loyalty.

I want to acknowledge and thank our many members that stuck with us, and to apologize again to those members, both current and former, who felt we treated them thoughtlessly. ~Reed

Hint: Admit mistakes as well as the thoughtless treatment, not the ‘alleged’ or ‘perceived’ treatment -this double-talk only undermines the already broken trust your customer are experiencing. Hiding behind the shiny new object isn’t going to win us over because you didn’t have the foresight to ask how this would impact our lives. It’s beginning to read like Plato’s apology and Qwikster is the hemlock.

In the end, don’t break what works.

Netflix, you’re a service-based business. Please serve.

Deep breath. Some folks are heading back Blockbuster after Netflix so successfully crushed them in the once-leading edge. I’m torn and frankly tired. So many choices and now I’m feeling a bit resentful that I have to discover whether a RedBox and Netflix stream will be a good match or ditching Netflix altogether is a better idea? What services are you using?

Meanwhile, I found a quick comic that sums up the bridge that Netflix is trying to create between the two companies.

Update: October 10Netflix kills Qwikster! Still customers are dismayed and feel it’s a bait and switch schema. Some are giving Amazon.com streaming a trial run before cancelling their Netflix account and using Cackle, Hulu, and other network apps to fill in the gap.

How about you? What are you doing? Are you cancelling your subscription?

Here’s to Cultivating Your Creative Independence

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Lisa Stewart
CREATIVEGoddess, Design Entrepreneur, Guide for INDIECreatives.com; Huge Pet Advocate; Lover of Wine, Food, Travelling, Tech & Laughing. Dreamy & Practical.

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