Last week was not a good week for Netflix, as they were down around 30% for the week as they revised subscriber counts way down from prior estimates. I’ve been a Netflix cheerleader for years, but after having witnessed some of the things that have happened over the past few months, last weeks nosedive is not surprising. In fact, it should have been expected.
How did Netflix lose their way?
- They celebrated. When Netflix started, they were a pesky fly buzzing around the big giant of the video world, which of course was Blockbuster. They went full tilt at Blockbuster and never stopped, and in the end, they ended up taking Blockbuster down. I think they got a little too complacent after beating Blockbuster, and decided to take their foot off the gas for awhile. Bad move.
- They cheesed off the wrong group. When Netflix announced changes to their pricing structure, they effectively unbundled streaming video and DVD-by-mail. This was great news for those customers who preferred one and had no interest in the other, but those groups are ‘fringe’ customers. The fact remains, the bulk of their customers would like to have access to both, but the new pricing plan turned their nose at those people. If you’re going to willingly cheese off a group of your customers, fine, but cheesing off the biggest group is generally not the best move.
- They got cocky. After the new pricing was introduced, backlash started almost immediately. I read somewhere that Netflix basically said that they expected some of their customers to be upset and that they were actually prepared to lose some customers as a result. What?!? Even if a company is OK with losing customers, rule number one is that you never, ever say that you’re OK with losing customers. Any Netflix customer reading that had to feel a lot less important after reading that. Really, really bad choice of words.
So can Netflix return to winning ways? I think so. Wanna know how? I’m not going to talk strategy or partnerships or pricing. Those details aren’t so as important as their way of thinking.
It’s simple. Forget about the fact that you’re the top dog. In fact, don’t even pay attention to those nipping at your heels. Instead, pretend that you’re the one chasing someone else and nipping at their heels. Why? Because that’s what worked for you. Netflix was untouchable the entire time that Netflix was chasing after Blockbuster. Netflix, you need that hunger, the one that got you to the top, so create yourselves an invisible target and make your moves as if you’re chasing after them.
Otherwise….you soon will be. For real.Copyright 2013 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.