It’s old news now. Netflix is changing its pricing structure. Well, it’s raising prices. OK, “raising" wasn’t actually the word used.
This was announced on July 12, more than two weeks ago. So, why am I writing about this now? Because Netflix is a great example of how to use social media to damage your own brand.
Let me start with the email sent out on July 12: Netflix announced that it would be “separating [its] unlimited streaming plan from [its] DVD plan offerings." In other words, it wasn’t a price increase; you just had to ... ummm ... pay more money for the same service.
Wouldn’t you know it, people were pissed. And its not Netflix’s first price hike of the year.
Let me use my subscription as an illustration. I have the Three DVD and Unlimited Streaming plan. Back in January (yes, 2011), my rates went from $16.99 to $19.99. OK. Three dollars. Prices go up.
Then, a few months later, the email comes:
Your current $19.99 a month membership for unlimited streaming and unlimited DVDs will be split into 2 distinct plans:
- Plan 1: Unlimited Streaming (no DVDs) for $7.99 a month
- Plan 2: Unlimited DVDs, 3 out at-a-time (no streaming) for $15.99 a month
Your price for getting both of these plans will be $23.98 a month ($7.99 + $15.99).
$16.99 to $23.98 in less seven months, that’s a 41% — lets call it what it is — price increase.
In addition to announcing this by email, it did the same on its Facebook page, with no effort to explain the reasoning behind the change. People were pissed. Go figure.
On July 12, angry posts were coming in faster than I could count, and over on Twitter, “Dear Netflix" was trending (and those weren’t love tweets). As I write, the Facebook post has received 81,187 angry responses to the announcement.
And now, it doesn’t matter what Netflix posts on Facebook — announcing that The Fighter is available for streaming, wishing Daniel Radcliffe a happy birthday, asking people what they’re favorite TV themes songs are — whatever the topic, the responses are always riddled with complaints, insults, and an occasional obscenity. Just eight minutes ago, one Facebook member posted, “I’m still a “fan” cause I like to see the “cancelling carnage” on their page.” (Guess that’s his favorite TV theme song.)
On its blog, Netflix even had the audacity to write, “By offering our lowest prices [on DVDs] ever, we hope to provide great value to our current and future DVDs by mail members."
So yes, people are pissed. Right now I’m pissed, because this is a blog post I shouldn’t be writing — not because Netflix shouldn’t raise prices. That’s not worth my blogging time. I’m pissed because four years ago, I thought I was done explaining how social media can’t be treated like a one-way broadcast. I’m pissed because it’s cliché to talk about how your brand is no longer what you say about yourself; it’s what your customers say about you. I’m pissed because this topic is just so 2006 that it makes me want to vomit.
Netflix does have its defender, those who explain that it’s really the movie studios that are to blame. They’re being unreasonable about licensing, so streaming costs have to go up. Maybe that’s true, but Netflix hasn’t said a word about that. As a matter of fact, I’m yet to hear any explanation from Netflix, which means they’re losing a golden opportunity. As social media is a two-way channel, this is an opportunity to directly address their angry customers’concerns and explain why they are raising prices 41% in seven months without any increase in service.
That silences says — correctly or not — that they don’t have a good reason, except for boosting profits. And how many businesses can get away with that.
#Dear Netflix, in the age of social media, you are presumed guilty until you speak up and explain yourself. You have platforms to address us directly. If you have a good response, lay it on us. If not, search the web for “Social Media 101,” but make sure to only read posts written prior to 2006. That’s where you’ll find the advice you need.