This was announced on July 12, more than two weeks ago. So, why am I writing about this now? Because Netflix is a great example of how to use social media to damage your own brand.
Let me start with the email sent out on July 12: Netflix announced that it would be “separating [its] unlimited streaming plan from [its] DVD plan offerings." In other words, it wasn’t a price increase; you just had to ... ummm ... pay more money for the same service.
Wouldn’t you know it, people were pissed. And its not Netflix’s first price hike of the year.
Let me use my subscription as an illustration. I have the Three DVD and Unlimited Streaming plan. Back in January (yes, 2011), my rates went from $16.99 to $19.99. OK. Three dollars. Prices go up.
Then, a few months later, the email comes:
Your current $19.99 a month membership for unlimited streaming and unlimited DVDs will be split into 2 distinct plans:
- Plan 1: Unlimited Streaming (no DVDs) for $7.99 a month
- Plan 2: Unlimited DVDs, 3 out at-a-time (no streaming) for $15.99 a month
Your price for getting both of these plans will be $23.98 a month ($7.99 + $15.99).
$16.99 to $23.98 in less seven months, that’s a 41% — lets call it what it is — price increase.
In addition to announcing this by email, it did the same on its Facebook page, with no effort to explain the reasoning behind the change. People were pissed. Go figure.
On July 12, angry posts were coming in faster than I could count, and over on Twitter, “Dear Netflix" was trending (and those weren’t love tweets). As I write, the Facebook post has received 81,187 angry responses to the announcement.
And now, it doesn’t matter what Netflix posts on Facebook — announcing that The Fighter is available for streaming, wishing Daniel Radcliffe a happy birthday, asking people what they’re favorite TV themes songs are — whatever the topic, the responses are always riddled with complaints, insults, and an occasional obscenity. Just eight minutes ago, one Facebook member posted, “I’m still a “fan” cause I like to see the “cancelling carnage” on their page.” (Guess that’s his favorite TV theme song.)
On its blog, Netflix even had the audacity to write, “By offering our lowest prices [on DVDs] ever, we hope to provide great value to our current and future DVDs by mail members."
So yes, people are pissed. Right now I’m pissed, because this is a blog post I shouldn’t be writing — not because Netflix shouldn’t raise prices. That’s not worth my blogging time. I’m pissed because four years ago, I thought I was done explaining how social media can’t be treated like a one-way broadcast. I’m pissed because it’s cliché to talk about how your brand is no longer what you say about yourself; it’s what your customers say about you. I’m pissed because this topic is just so 2006 that it makes me want to vomit.
Netflix does have its defender, those who explain that it’s really the movie studios that are to blame. They’re being unreasonable about licensing, so streaming costs have to go up. Maybe that’s true, but Netflix hasn’t said a word about that. As a matter of fact, I’m yet to hear any explanation from Netflix, which means they’re losing a golden opportunity. As social media is a two-way channel, this is an opportunity to directly address their angry customers’concerns and explain why they are raising prices 41% in seven months without any increase in service.
That silences says — correctly or not — that they don’t have a good reason, except for boosting profits. And how many businesses can get away with that.
#Dear Netflix, in the age of social media, you are presumed guilty until you speak up and explain yourself. You have platforms to address us directly. If you have a good response, lay it on us. If not, search the web for “Social Media 101,” but make sure to only read posts written prior to 2006. That’s where you’ll find the advice you need.
So, I picked a fight with a Google Apps product manager. (OK, it wasn’t really a fight.) He was presenting at a session called Cloud Computing for Small Business, which was really just a session on web-based office suites.
The invite only told me that it would be about cloud computing, with representatives from Google, Microsoft, and Drop.io speaking. Minutes into the session, though, everyone working in technology realized that this wasn’t intended for us. It was designed to convince small-businesses owners to use Google Apps or Microsoft Office Web Apps. (The representative from Drop.io, the most interesting product represented, received a minimal amount of time.)
I watched the speakers confuse those poor business people with babble about The Cloud — a dubiously useful term, conveying huge, vague concepts in two words. I mean, my business runs on cloud services, but every time I hear talk of The Cloud, I have these images of binary lightening bolts zipping information from one computer to another.
Telling users you’re offering them cloud computing when you’re really talking about web-based spreadsheets, is about as valuable as telling them a website was coded in PHP. Those products are truly useful to business people, but the representatives from Google and Microsoft made major mistakes.
To start with, they were stuck in their own product silos. They work on cloud-based office suites, and they spoke as if cloud computing was synonymous with those programs. Yes, all of these products are cloud computing, but not all cloud computing is an office suite.
They also kept emphasizing “The” in “The Cloud.” Though they explained how their products securely stored user files in remote data centers, anyone being introduced to cloud computing by this session would have believed there was just one big cloud. In reality, of course, Microsoft’s cloud is separate from Google’s cloud (and for that matter, those of Amazon, Salesforce, IBM, and others).
The session should have been called Web-Based Software for Small Business. All the audience needed to know was that there are browser-based alternatives to the costly software their businesses are installing on local computers, and those products can save IT time, provide protection from data loss, and save money.
For the user, cloud computing means that most of the computing is done on powerful remote computers that they interact with through their web browser or another application on their computer or mobile device. In addition to the benefits of web-based office suites, it also allows smart phones to access computing power exponentially greater than that of the device itself — providing huge amounts of data through devices that can fit in your hand.
It’s why an iPhone, Android device, or Blackberry can access millions of songs through Pandora and Last.fm; indentify any product based on its bar code; and provide the location of the nearest Thai restaurant, along with a menu and reviews. Actually, smart phones and apps may be more responsible than browsers for bringing cloud computing into people’s daily lives, and it’s been done without even using the term. (Imagine an Apple spot: “There’s a cloud and an app for that.” )
I’ve long been skeptical of the web browser’s future. The modern browser must render websites from 1997 (HTML 3.2), modern websites using AJAX and Flash, and new websites using HTML 5. We are continually putting more demands on the browser, and still expecting it to render everything quickly and flawlessly. At the rate technology is changing, it’s amazing that browsers haven’t already become bloated, inefficient, and unable to render older sites.
When we hit Q&A, I asked the speakers whether — given the previously mentioned demands on the browser — they saw the future of cloud computing as browser-based or if they expected to see more light applications relying on cloud-based data and computing power. They both answered definitively that the future was “all about the browser.”
All? Seriously? If the future of cloud computing was strictly about online word-processing and spreadsheets, I would have agreed. But cloud computing has already broken free of the browser — just look at smart phones.
After the session broke up, I approached the Google rep as he was leaving and said, “I think you’re wrong about the future being all about the browser. When you said that, it sounded to me like the Google Apps team isn’t talking with the Android team?”
“What do you mean?” he asked.
“I assume you have a smart phone.” He nodded. “When you go to access Google Maps, do you open up a web browser or the Google Maps app?”
“The app,” he replied.
“Smart phones,” I said, “whether they’re Android, iPhones, or others are already about light apps and powerful cloud computing.” (I felt obnoxiously self-righteous as he pondered this.)
Most of the people in that session not only understood how to use basic Google Apps, but are already enjoying the discovery of new apps for their smart phones. They realize that their Google documents are stored on Google’s computers and accessed via the internet. They know the thousands of songs streaming from Rhapsody to their mobiles aren’t actually stored on the phone. They’re users not product managers, and for them, the term “cloud computing” is useless.
When the users of internet technology are confused, it’s frequently because those of us working with technology choose insider buzzwords over straight talk. Terms like cloud computing have their place in our professional settings, but when it comes to users, our jargon … please forgive me … only clouds the issue.