My primary relationship with entertainment is in the pits. Netflix just gave me the "It's not you; it's me" speech.
Netflix's latest communication has left me more than a little baffled—and I'm not talking about the price hike or rebranding of Netflix DVD to Qwikster. I'm talking about the letter of apology that announced the changes.
The Recap
Here's the quick recap: Netflix, the online and by-mail video rental company, announced a service change and price hike that users were none too happy about. It would have been one thing to gradually make the change, or grandfather in members who have had the same subscription plan for more than a year (or two, or three). But the change, said Netflix, would be swift and across the board. Some members threatened to quit (a PCMag poll found 55 percent were ready to give Netflix the boot), declaring it an outrage to pay $16 for unlimited movies and TV through streaming and one DVD at a time. I shrugged off the whole thing. I get that Netflix has to make money for shareholders. Sure, it was a poor decision to not introduce the new system more gradually, but on the whole, price hikes and changes in the business model are inevitable. More importantly, the change didn't affect me. I was (and still am) an Instant-only subscriber, and only Instant plus DVD members would feel the pinch.
'I Messed Up...'
So as I said, Netflix wrote to me (okay, and all other members, too) this week. Unlike most other communication from the company, which I skim and delete, sometimes without even opening, this letter stopped me in my email tracks.
Signed by co-founder and CEO Reed Hastings, it opened like this:
"I messed up. I owe you an explanation."
It's been a long time since I got a letter that started out with such a stark apology. Hastings and his team are obviously aware that they botched customer communication and messaging in the last three months. But as I continued reading, I heard fewer apologies and more evidence that Netflix and its customers are no longer in the same relationship. A little later in the letter:
"…I should have personally given you a full explanation of why we are splitting the services and thereby increasing prices. It wouldn’t have changed the price increase, but it would have been the right thing to do."
What's odd is 1) the statement "it wouldn't have changed the price increase" and 2) that Netflix didn't offer any kind of token. Americans love (and sometimes even expect) compensation. And America is Netflix's biggest market, even though the company has a presence in Canada and Latin America. Compensation doesn't heal all wounds, but it's an easy way to make a lot of customers happier. In some ways, I applaud Netflix for not taking the easy way out by sending me flowers (or a month's worth of free DVDs) and sticking to words of sincerity. And just as I have my hopes up for sincerity, the letter takes a drastic turn.
The meat of the letter announced that Netflix was splitting off its DVD-by-mail service entirely and rebranding it as Qwickster. So members are being asked to not only forgive Netflix for the price increase, but also deal with a whole new arm of the organization, with a new website and separate billing.
A price change would have been one thing, but to announce, in middle of an emotional letter of apology that you're segmenting the business and the brand entirely, well, it's a bit much. Netflix tried to do the right thing with its communication, but the strategy completely rubbed me the wrong way. Plus, as an instant-only subscriber, I wasn't even affected by the changes! Although after reading the letter, I feel like I am involved now. I feel like I should have an opinion, regardless of whether I genuinely do.
Are You Rejecting Me?
I'm not one for drama, and I've got a pretty thick skin, but I have to say I felt rejected. And it would be ten times worse if I actually was still a DVD-by-mail subscriber. Maybe had I paid closer attention to early warning signs that Netflix was changing, I wouldn't feel so off guard now.
There is precisely one thing Netflix could do right now to make up for all this messy communication: Announce that new ground has been broken with movie studios and the Instant Streaming catalog will be doubling in size and tripling in quality. Until that happens, all I'll be hearing is, "It's not you. It's me."