Should Netflix Be Worried About Losing Customers?

    July 24, 2011
    Chris Crum

During the first half of the year, things were looking really good for Netflix subscribers. The company made announcements like: “Miramax Content Deal,” “More MTV Content,” “Glee Available to Watch Instantly,” “More Anime Coming to Netflix,” “Marvel Content Coming to Netflix,” and “Netflix Launch on Android.” The company was making deals to bring users more streaming content, and making it available on more devices. It even announced forthcoming exclusive content with House of Cards, which would presumably be just the beginning.

Is Netflix headed in the right direction? Share your thoughts in the comments.

Their streaming catalog has certainly improved a great deal over the past year or so. No question. It’s got a long way to go to match their DVD catalog, but the company has certainly given people more reasons to use its streaming service.

In June, the announcements were things like: “New Look and Feel for the Netflix Website,” and “Temporary Removal of Sony Movies through StarzPlay.” In July, while the company did announce expansion into Latin America, came the big announcement of price changes, where members signed up for the popular unlimited streaming and unlimited DVDs (one at a time) plan have to pay 60% more to keep the same service (which is actually turning into two separate plans).

Backing up to June, the Netflix redesign turned into a PR nightmare on its own. Though Steve Swasey, VP of Corporate Communications was quoted as saying, “We know the vast, vast majority of people like this,” regarding the design changes, it was clear by reading comments all over the web that if that was indeed the case, the vast, vast majority wasn’t speaking up nearly as much as those that loathed or even slightly disliked the design.

It didn’t take long for users to max out the comments section of Netflix’s original announcement, mostly with harsh criticism of the design changes. We ran several stories related to the design here at WebProNews and received hundreds more. The comments on the removal of Sony movies reached into the thousands as well, though many of them were simply more complaints about that redesign.

Just before Netflix announced the price hike, they did cave a little bit on some of the complaints about the design. They said they’d bring sortable lists back. Then they dropped the price bomb effectively smashing what little love that may have earned back from the users who were upset about that.

Of course when Netflix announced the price hike, the negative comments poured in again on Netflix’s blog, once again maxing out. Again, we got hundreds more on our own coverage. Any guesses as to how many comments their Facebook update about it got?

Just shy of 80,000.

Of course Netflix knew there would be plenty of backlash. According to CNET, they had extra customer service reps working when they announced it. “We knew what the reaction would be,” Swasey told the publication. “We are not surprised. We knew that there would be some people upset by the service and with the price being adjusted.”

Since then, Netflix has just been pushing on, likely hoping the fury would die down.

This past week, Netflix announced that its Android app could support more devices, as previously it had only supported a few. Now it supports 22. The reviews for the app are overwhelmingly positive. At the time of this writing, it has 32,072 five-star ratings and 6,921 four-star ratings. Only 4,882 gave it a one-star rating, and you have to wonder how many of those are just bitter about recent events. Some of them were simply rated low because of the app’s incompatibility with some devices.

NetflixAndroid abound! You can now instantly stream movies & TV shows from Netflix on-the-go using your HTC Evo 3D, Droid 3, Galaxy S, HTC Thunderbolt, or Motorola Atrix phone — plus many others that are now supported. Check it out in the Android Market, and more info on our blog:

Of course if you look at the comments on Netflix’s announcement about this, you’ll quickly find more jabs at the company’s decision to raise prices. “Perhaps you should spend more time on keeping current services working instead of setting up new services,” said Mitch Snyder, commenting on the Netflix Facebook post.

In afternoon trading on the day before the price hike was announced, Netflix stock was priced at 290.15. At the time of this writing, though up from yesterday, is still down at 277.30.

Many users have said they’d quit the service. They were saying that before the price hikes even – just because of the redesign. Many more indicated they would do so after the price announcement. An outage last weekend probably didn’t help too much, though Netflix is crediting 3% of users’ bill for the inconvenience.

“Netflix’s July 12th price change announcement hammered the company’s consumer perception down below its competitors where it still remains today,” a representative for YouGov BrandIndex tells WebProNews. “Two weeks after the Netflix price structure notice on DVD rentals and streaming, the Los Gatos-based company saw its consumer perception with adults sink rapidly below competitors Redbox, DirecTV and even bottom-score dweller Blockbuster, which resides in widely-held negative opinion territory.”

“The brand which seems to have benefited the most appears to be kiosk-based rental chain Redbox, whose perception has moved from a virtual tie with DirecTV to pulling away to higher positive score numbers.”

YouGov BrandIndex Data

What should Netflix do to help its brand perception? Tell us what you think.


Chris Crum
Chris Crum has been a part of the WebProNews team and the iEntry Network of B2B Publications since 2003. Follow Chris on Twitter, on StumbleUpon, on Pinterest and/or on Google: +Chris Crum.