Localspeak

Love Lost - Netflix, Listen Up!

26 July 2011

Last week I had the opportunity to listen to CEO of The Future Place UK Ray Poytner on his inaugural Radio NewMR series, a collaborative venture to co-create the future of market research. During the radio program, Mr. Poytner cited a statistic from ESOMAR , the essential organization for encouraging, advancing and elevating market research worldwide:

50% of Marketing Research budgets are spent on the surveys; and, 50% on “the process”.

As part of “the process”, our own market research specialty services firm joined the NewMR fray, partnering with hybrid- and holistic-minded global researchers and brand innovators whose conviction Localspeak shares. Although our current analyses are generated from the English-speaking world, we do anticipate a near future ability to offer in-language social brand insights,

Today in this post, we continue to monitor the plummeting equity of the Netflix brand, utilizing NetBase social media analytics tools. A classic story of how a “hot” brand can precipitously erode its passion equity by not listening, or at least not paying heed to the elephant in the room, the rancor among Netflix subs has been unabated since its July announcement that it would be raising rates as of September 1, 2011

The much-enamored brand—held responsible in large part for the demise of Blockbuster stores—is no stranger to social media. Once the darling of Facebook and Twitter, it quite oddly has not heeded to the overwhelming negative trending on it’s social media pages. With brand loyalty arguably its biggest asset as a service company, and not proprietary technology, this has become quite a slippery slope indeed. On Wall Street, the brand has taken another blow. According to July 25th reporting at Mashable , the company’s stock is down more than 10% in after hours trading, following its second quarter 2011 earnings results. Earlier in the year Netflix had reported record revenues and earnings.

We turned our focus to what consumers are saying— for Netflix, perhaps an abject lesson in the consequences of brand hubris?

We generated our charts using Insight Scorecard for brand managers, and its companion Insight Workbench , for analysts. Observations are based on tens of thousands of high precision sound bites.

Betrayal of Consumer Loyalty
Netflix sub emotions are heated, with brand sentiment weighing heavily toward betrayal of consumer loyalty, and with no lack of sarcasm:

@aaronsperry Aaron Sperry
Netflix’s 2nd price hike is ridiculous. Thanks for rewarding loyal customers!
#netflixisgreedy (12 Jul via Tweetbot for iPhone)

@optica8 Dave Ballantine
netflix new pricing model sucks. If they had the content I wanted on streaming, no problem. Sad cause I’ve been loyal for over 10 years.
(12 Jul via web)

@sen005 Sara Beth
Netflix price hike angers users, some drop plan: Some Netflix customers called it a slap in the face. Others a b… http://bit.ly/nvtfsr
(13 Jul via HTC Peep)

@Mattjsrules Matt Suda (Matthew)
Netflix’s new pricing sucks! Most of the customers will cancel their service I bet!
(12 July via Twittelator)

Streaming Quality
While “cord-cutting” conversations trended higher in June among Netflix subs, the discussions were largely for the perceived cancellation of cable subs with the advent of Netflix streaming ( Are Netflix Subs Driving Cable TVs Cord-Cutting Threat? ). In a reversal, customers also have begun to revisit streaming quality. Should Netflix streaming pricing reach a par with cable offerings, the brand’s once loyal evangelists may opt for the quality and current selections delivered by the cable companies, as the posts below show:

Frankly, the Netflix streaming product sucks. The movies are low quality and the title library is mostly things people aren’t going to a RedBox to rent. The “good” streaming product comes from the cable companies. If the price were identical for the same content, nobody would bother streaming Netflix.
( forums.alpinezone.com/ Forums 07/19/2011 )

I honestly wont mind paying the $15 that I might end up paying unless I keep streaming only, but those mofo’s better add better shit to their selection. Also, ive been reading complaints about Netflix’s huge price hike and everyone is saying the same thing; that they [Netflix movies] have a poor selection of streaming options.
(http://forums.clubrsx.com 07/14/11)

Defectors Have Other Options
DVD buzz is trending higher than usual, perhaps indicative that Netflix subs are fully aware they have other options, as these posters portend.

EnaToGo Ena Brdjanovic
Netflix price increase just made me renew my @Amazon Prime membership with unlimited streaming.
(12 Jul via web)

That’s not what I’m arguing. I’m saying Netflix selection is limited compared to what the net has to offer. When you want to watch a movie is up to the viewer. If you want to watch a movie that you haven’t seen before you should see if Netflix has it or if you can download it. If its a newer movie, then downloading might be your best option. Netflix is a good option to have along with downloading or cable but I don’t think it’s best all around.
(FuriousStyles1 message board post, 7-22-11)

‘A Different World’
Ironically, the launch of the sexist new California Milk Board campaign coincided with the release of Netflix’s new pricing announcement. Like the current Netflix uproar, the social media firestorm that ensued over the recent misogynistic twist of the venerable long-running Got Milk campaign was so extensive; it forced the premature withdrawal of the campaign and the issuance of a replacement tagline that humbly read: “I apologize for not reading -between-the right lines”.

According to Jeff Goodby, co-chairman and creative director at Goodby Silverstein & Partners – creators of the recent Got Milk campaign who did not pick up on its sexist overtone until it was too late – they had previously created a similarly-themed Got Milk campaign six years ago, also intended to “humorously” address the effects of female PMS on men. “It was a different world in 2005,” Mr. Goodby said.