Tuesday, October 11, 2011

Netflux -- When Change (Net Fixes) Go Wrong ...

Netflix -- Netflux. A case study from the "change ain't always good" department.

The past 3 months have not been kind. The past 3 months will go down as one of the largest marketing gaffes in the history of the tech world. A "new Coke" kind of thing (remember when Coke changed its secret recipe to please a new generation of users ... but without checking with its core market?). Same deal here -- the Reed Hastings juggernaut has become the Reed Hastings juggerNOT. Pricing changes. Content changes (Starz, a core licensor of motion picture content, announced it will not renew). Service changes (Qwikster, really?). Core strategic changes -- flip-flopping. Continuing Mea Culpas.

And it shows -- shows where it hurts -- (1) customer defections (600,000 subscribers lost in Q3); and (2) market value (its stock has plummeted nearly 2/3 in the past 3 months -- from a per share price of $305 to yesterday's close of $111)!

Listen, I am still a subscriber. And, this "noise" does not change the way I feel about the service. Price experimentation (as I have written previously) is a must in this brave new world of digital distribution. And, companies make mistakes (we all have).

My biggest beef? CONTENT! Without significantly expanding its A-grade motion picture and television programming, even I will become disaffected. I mean, how many episodes of Scooby Doo can I watch? (Although, don't get me wrong -- I love Scooby Doo ....)

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