Dear Netflix: The difference between moving “quickly” and moving “too fast”

What are we supposed to think when something is “too good to be true?”  Should we stay positive and be thankful?  Or is it best to be prepared for a possible disappointment?  Whatever your preference, a few years ago I found myself thinking, “Netflix, you are too good.”

When streaming online media was added inclusively in 2008 as a feature to the monthly DVD-by-mail subscriptions, subscribers were entitled to watch unlimited hours of streaming media at no additional cost.  I was ecstatic: no commercials, no scheduling restrictions, and no extra cost.  Customers could easily use the Internet to stream television shows, movies, and documentaries at no additional cost and they could do it whenever they desired.  So where’s the catch? 

It came in 2011.  During the summer Netflix announced that it would separate the current subscription plans into two separate plans: one covering the instant streaming and the other DVD rentals.  The announcement led to a flurry of negative reception among Netflix's Facebook followers, who posted negative comments on the company's wall. Twitter comments also created a "Dear Netflix" trend with generally negative comments as well.  Social media platforms allowed for Netflix to have a repository of feedback from this big decision.  The company realized very quickly that this situation needed to be fixed.  One twitter account posted the following:

Netflix customers were not pleased; tens of thousands spoke out against the plan on Netflix’s Web site, and Netflix stock slid sharply. 

Reed Hastings, Netflix co-founder and CEO, said, “companies rarely die from moving too fast, and they frequently die from moving too slowly".  This “pacing,” so to speak, is an interesting component to the marketing techniques that are used so frequently by many companies.  Though these actions seem risky, there must be calculated and thoughtful approaches involved.  Netflix expected some of its 25 million subscribers to cancel in the wake of the price change, but the cancellation rate exceeded expectations.  Hastings and his investors now realized, it’s time to listen, slow things down, and be more considerate to our customers.

Risk-taking is a big part of making money, and I understand that.  The Internet and social media should serve as tools to help companies in their big decisions.  Just recently I completed a questionnaire for the Telegram & Gazette.  Some of the questions were very specific and regarded the costs that I would be willing to pay for online newspaper subscriptions.  This must be very valuable information when businesses and companies determine price points for new commodities.  A commodity's worth is indeed dependent on consumer demand.

Netflix should have done some market research prior to making such a hasty decision.  I think the company should have implemented a surveying system or they should have formed a collaboration with Communispace in order to have data regarding customer preferences.  If Netflix was aware that some customers would be disappointed and unhappy, it should have treaded more carefully in the financial waters of DVDs and media streaming.  Netflix learned its lesson, and hopefully others will too.  Financial details will inevitably make people sensitive, so please listen first and THEN decide!!