Is social media the right venue for announcing an unpopular change? - SmartBrief

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Is social media the right venue for announcing an unpopular change?

3 min read


Today’s poll analysis post was written by Jeremy Victor, editor-in-chief of For more of his writing, follow B2Bbloggers on Facebook and Twitter.

SmartPulse — our weekly nonscientific reader poll in SmartBrief on Social Media — tracks feedback from leading marketers about social media practices and issues.

Last week’s poll question: Was Reed Hastings, CEO of Netflix, right or wrong to announce the launch of Qwikster in a blog post?

  • Wrong: 72.6%
  • Right: 27.4%

Imagine for a moment, if you would: You are the CEO of a wildly popular, mail-order DVD rental business. Actually, you invented the category by defying the odds and ignoring conventional wisdom. Since the company’s inception, your customers have loved you. Whether it be the powerful recommendation engine or the beautifully simple return process, just about everything about your service is beloved.

Add to that the fact that over the past two and a half years your stock has climbed from $30 a share to a recent high in early July of this year of $296 a share. You’ve all but eliminated your main competitor, but something still gnaws at you. Something big.

There is a new shift coming in how media is delivered and you don’t want to suffer the same fate as your old video rental friends as new rivals take the stage. It’s time to make some tough decisions. What do you do? Do you sit back and wait for the market to move around you? Or do you start taking action to position yourself for the future?

In Netflix’s case, Reed Hastings is positioning his company for the future, raising prices in July and separating streaming and DVD delivery; the problem is customers didn’t respond so kindly. One article estimates Netflix has lost a million customers in the last quarter alone and suggests that Netflix’s stock has lost half its value in the past two months — about $8 billion.

That is catastrophic.

In an attempt to reverse his fortune, Reed Hastings published an article (letter to customers) on the Netflix blog on Sept. 18. In the ninth paragraph, he announced the renaming of their DVD by mail service to Qwikster: 78% of you thought it was the wrong decision to do so.

Based on the fire storm of customer outrage the blog post incited, you may be right. To date there are 27,281 Facebook comments on that post. In just the first two days, there were more than 24,350. During the last week, almost 3,000 more comments were left. Netflix customers are not done having their say.

The other social dimension to consider in this as well is that with Facebook comments, each comment has its own number of “likes” — many reaching more than 500. The network effect of that negative word of mouth is just incredible, each comment spreading throughout Facebook repeating itself.

Frankly, I am not sure it was the right decision to announce Qwikster in a blog post. I do think Hastings is making the best decisions he can to position Netflix for the “streaming” future.  One thing is absolutely certain, being “open” and “social” is incredibly hard, and we are only beginning to see how powerful customers can be in this brave new world of social media.