Wednesday, September 21, 2011

New Coke, Ford Edsel, Sony Betamax, Qwikster

Okay fine, I admit it. I'm obsessing over the whole Netflix thing. I know everyone is sick of hearing about it and is ready to move on but I'm not done beating this dead horse.

I normally don't get sucked in to this kind of thing. I usually find it easy to ignore political debates and business controversies so I have no idea why I can't let this one go. Maybe because I don't have anything better to do. I should probably get a job.

Monday morning I got the now infamous email from Reed Hastings, Netflix CEO, admitting that they handled the recent price increase badly. If you read a little further down in the email, which is very similar to this blog post, you'll see that reason for the email/blog post was not to apologize to their customers for an unusually large and unreasonable price increase, but rather to let us know that they are splitting up their DVD and streaming services for our inconvenience.

When I learned about the price increase a few months ago, I pretty much ignored it. I wasn't happy about paying more but still it's pretty darn convenient for me to choose my movies online and have them sent directly to my house where I can watch them for as long as I want then send them back when I feel like it.

Most of us extremely lazy types fully understand the value of convenience and are willing to pay for that service. For instance, I can pick up a gallon of milk at Wal-Mart for around $3.75, give or take depending on whatever the price of milk depends upon. The problem is that I can't get in and out of Wal-Mart in under 20 minutes. Half of that time is spent either looking for a parking space or hiking to the door from the only available parking space that I found 3 miles away. Then I have to walk to the very back corner of the store to get my bargain priced milk, dodging every nutcase in the universe along the way. Then I get to spend another 10 minutes waiting in line at one of the 4 open check out lanes. I have no idea why they even have those 32 other ones, they're never open.

Yeah I get the whole marketing reason behind the location of the milk, but by the time I have my hand on it I'm usually so pissed off because of the time I've wasted that I choose to passively/aggressively punish Wal-Mart for inconveniencing me by NOT buying that pack of gum at the check out counter. That'll show them.

Alternatively, I can stop at the Circle K down the street, grab a $5.00 gallon of milk and be back in my car in under 5 minutes. There are times when that overpriced milk is worth it for me to be able to save time and stress. You know how busy and stressed we unemployed housewives without small children are. It's a freakin' nightmare.

Now don't get me wrong. When I have a big shopping list that includes 2 weeks worth of groceries, a new pair of socks and a battery for my car, Wal-Mart meets my needs very well. We have a love/hate thing going on.

In my world another convenience worth paying for is the postage stamp. I think it's a heck of a bargain to be able to get a letter clear across the country in a couple of days for 44 cents. Heck, I'd pay 50 cents. When you consider that the alternative is to drive it there yourself, suddenly postage becomes a convenience worth paying for. That's my view anyway.

I'm not sure why I find it so easy to overlook a price increase but nearly impossible to ignore a bad marketing decision. New Coke, anyone? I think I lost sleep over that one. And it's not like I think that I'm always right and that all companies should listen to me. I am reminded of my capacity for wrongness on a daily basis. But for whatever reason I do seem to have good instincts when it comes to marketing. I am a super important  Goo Gone GooRu after all. Although that has less to do with my marketing instincts and more to do with my ability to suck up. Major corporations have made successful changes that I didn't agree with. I can't think of any off hand, but I'm sure there have been some. A few. Well, surely there's one.

In an effort to better understand why Reed Hastings would split Netflix into two different companies with two different websites and two different billing structures I did a few Google searches. My thinking was that this man runs a very successful business, therefore he can't really be the bozo that he appears to be. There has to be a reason for what looks like a colossal bad idea. I'm not the only one who thinks this idea is bad. As of today, there are approximately 25,000 comments to the above mentioned blog post and even though I haven't read all of them, it is obvious  that the vast majority of them are negative.

What I found during my research was a whole lot of articles and videos where Hastings talks about how streaming video is the future and it's certainly more profitable than DVD distribution because operating expenses are much lower. That information shed a different kind of light on this video:



 It really looks to me like Hastings is jumping ship with the other rats and making Andy Rendich captain of The Titanic. I'm not calling Hastings a rat, that would be a personal attack on someone I don't even know. My high moral standards dictate that I should at least meet a person before I call them names. I just think Hastings is exhibiting rat-like behavior. That's all I'm sayin'.

I really kind of feel sorry for the guy. Facebook recently rolled out some changes that are also not being well-received. The inconvenience they've caused is not nearly as huge as the Netflix debacle and I think users will eventually adjust. However, I am sadistically amused that Reed Hastings just happens to be one of the 7 Facebook board of directors. They guy just can't catch a break! If he doesn't fix this the business world will start avoiding him like the plague.

To his credit, he is obviously aware of his current unpopularity and is able to poke a little fun at himself:

I love this note from the Huffington Post. I just wish I was the lucky owner of the Qwikster Twitter name. I could retire from my stressful joblessness. Also, if you don't already follow @NetflixGlobalPR on Twitter you must do so immediately. Otherwise you risk missing out on little gems such as this:


Obviously the consumers have spoken, now I'm wondering if the company will listen. Coca-Cola listened. Like I told them to.

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