Localspeak

Netflix Social Brand Equity Plummets

17 July 2011

Insight Scorecard—Netflix Social Brand Equity Plummeting

In June of this year, Localspeak began utilizing the Netbase Insight Scorecard to track the Social Media (SM) brand equity of Netflix , which with more than 23 million members in the US and Canada, has become the world’s leading Internet subscription service for enjoying movies and TV Show. We also began a Netnography.com case study forum discussion as to whether the company’s subs driving cable TV’s “Cord-Cutting” was becoming a threat.

Utilizing Insight Scorecard we weighed several defined themes across Netflix (vis-à-vis cable companies), which included customer service, movie selection, and bandwidth, convenience, cord-cutting and cost. Last month our canvassing of results found that cord-cutting stood out as the most prevalent conversation driver, but had not showed a significant shift in net sentiment as yet.

July’s Insight Scorecard canvas shows an entirely different picture. From June to July, since Netflix announced a 60% price increase for DVD and online movie package rentals on July 11th, predictably its social pricing buzz share soared from 4.8 to 12.3. By the end of the week, Scorecard showed the brand’s net sentiment plunging to -1 from 50 in just two days, July 10-12. The predominant conversation driver had shifted to cost from cord-cutting. As shown in the Scorecard Brand Passion Index below, the darker blue Netflix bubble reveals downward trending in the U.S. from the month prior.

U.S.: Netflix Passion Intensity Index, June-July 2011

In the U.S., in a single year, the Netflix Scorecard showed net sentiment dropping from 62% to 26%. Net sentiment in Canada, on the other hand, plunged deeper, from 73% to 19%.

Canada, the first market outside of the U.S. for Netflix, already was plagued by broadband limitations. The company’s subs following the pricing increase were notably irked, with share of buzz spiking 530% two days after the announcement, relative to July 8. The day following the price hike, net sentiment in Canada dropped from +14% to -14% in a single day, as shown in the chart below.

Canada: Netflix Net Sentiment July 8-15, 2011

While many of our industry peers discuss and dissect the now ongoing Netflix situation, I found this particular blog post titled Is this the beginning of the end for Netflix? by Stephanie Sutton a more than interesting read.

At our fingertips, these brand insights are emblematic of the robust SM perceptions Insight Scorecard can provide market researchers and marketing teams, customized and scaled to both the level of frequency and complexity required. In contrast to other buzz metrics tools available which deliver more superficial NLP processing, the Insight Scorecard’s level of language dissection refinement is able to deliver automated brand equity tracking within an 85%-95% accuracy rate. Natural language processed, contextually relevant SM sound bites are retrievable within minutes from a 12-month data storehouse. We are able to export and sort key sound bites reflecting a rich panoply of not only “how” consumers relate to a brand, but also “why” they emote and behave in relationship to the brand.

On a daily basis, Insight Scorecard tracks these three key metrics, which assist in the protection of your market share:

• Share of Buzz – How often people are talking about your brand
• Net Sentiment – How people positively perceive your brand
• Passion Intensity – How emotionally charged people’s feelings are

Using Netbase Insight Scorecard, Localspeak can create timed brand audit reports over a defined time period: weekly, monthly, quarterly or annual basis. We also are able to package timely reports including some of the key emotional and behavioral motivators reflected in the data, should you require more complex reporting. Further, when your marketing team needs to examine cross-segments of social data by source or domain, we can provide Twitter or blog packages and/or social sound bites from domains in Australia,Canada, the UK, and South Africa.