Was Netflix Tuned In?

29 Sep

Last week, Netflix, the innovative movie rental company with the famous red envelopes, made an announcement. Well, actually, it was an announcement wrapped in an apology. Which was a little weird, especially since the apology was – oh – about two months late.

So much about this announcement left people scratching their heads. Netflix would not only keep its raised prices (which is what set off the loud volume of complaints earlier this summer), but it also would split its streaming and DVD business into two distinct companies. The new DVD company also had a new, retro name: Qwikster (and a not-so-retro Twitter account). The communication resulted in more customers canceling their accounts, and a devaluation of Netflix stock.

Kudos to Reed Hastings for apologizing. I’m sure it was done with good intentions, but the execution left a lot to be desired. A number of people commented that it felt hasty and thrown together. I suspected a disconnect between the company’s executives and the communications team. Perhaps it was a bit of both, because some positive announcements soon followed the apology: Netflix integration into Facebook’s Open Graph and the newly inked deal to stream Dreamworks movies. Unfortunately, neither of these announcements got the attention they deserved.

I find it hard to believe that Netflix made a hasty decision to split into two companies based on public outcry over a price increase, but the way the announcements played out, that’s sure what it seems like. It also felt like Hastings wanted to play down the apology by announcing what he felt was really good news. Wrapping the two together simply confused customers further.

I’m sure Netflix had good reason to break into two companies, and there have been several people who have said this is a good strategic – even visionary – move. Unfortunately, that message was lost to customers.

Follow these tips to better manage a series of high-risk communications:

  1. You must tell a bigger story. Announcements can’t be treated as isolated incidents. They will always be received as another chapter in your corporate story. Have a strategic communications plan and remember that its goal is to help audiences understand the bigger picture.
  2. You must have good timing. If criticism reaches a crescendo, apologize immediately. If you must wait, focus only on the apology and explain why it has taken you so long to do so.
  3. You must have a plan. A messaging timeline ensures that your communications remain crisp, clear, and consistent. A strategic release of messages means that each announcement gets the appropriate amount of attention.
  4. Your messages must be clear and consistent. It’s important to listen to what you’ve crafted as if you are the recipient. Here’s where the rubber meets the road – and where insular thinking gets organizations in trouble. The best approach is to test the message on someone outside the company. And remember that some messages are too complicated to be communicated along with another. The news about Netflix splitting its business in two? Too complicated to be delivered with any other message.
  5. You must do your due diligence. I liken this to the advice given to trial lawyers: never ask a question for which you don’t already know the answer. It’s true with announcements too. You must consider all questions and criticisms and have your answers ready. And for brands? Make sure you do that Google search (and check that Twitter handle).

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