One of my clients sent me this link to a very creative and useful reminder of how the web has evolved – especially in the interaction between browsers and various web technologies. I’d like to see them add the social element in as well in the next edition…

On Wednesday, Netflix raised prices from 25% to 60%, setting off a tweetstorm of protests from consumers, with many threatening to cancel their subscriptions.

So first a couple of comments on what they did, before I address how they did it and my personal response.

It’s still a free market

Although there is a lot of speculation on why Netflix leadership felt the need to impose such a high percentage increase, we really don’t know, and it really doesn’t matter. Netflix is entirely within its rights to raise prices. And it is a legitimate decision. I once led a consulting project for a bank where we helped their small business customers understand the impact of a price increase on their bottom line and what percentage of customers they could afford to lose and still be more profitable. It is quite an eye-opening experience that I highly recommend.

At the same time the consumers are entirely within their rights to protest the increase and/or cancel their subscriptions. This is the market responding – and what the market says isn’t always what the market does. Financially, Netflix could still walk away with increased profitability. I doubt they’ll walk away with increased good will.

“Didn’t these guys take Psych 101?”

The above quote comes directly from Brad Berens’ insightful post on the same topic. If you read the post announcing this price increase, you can practically smell the condescension and marketing speak. No honest explanation, no humility, no “we know we’ll lose some of you and are sorry to see you go.” It’s almost as bad as the CEO, Reed Hastings’ ill advised NYT’s op-ed piece from 2009 bragging about the “eye-popping amount of money” he is paid and pleading for higher taxes.

Then, when the backlash begins, the entire company collectively sticks its head in the sand. I predict that this is going to inspire dozens of “How not to do social media” case studies within weeks if not days.

“Dear Netflix” is a trending meme on Twitter and there are over 11k comments on Facebook and  5000 comments responding to their blog announcement. It’s been over 48 hours, and there hasn’t been a public response to the backlash on any social media outlet I can find. The last tweet was at 10:22 July 12 announcing the price increase.

In today’s WSJ, Steve Swasey

… a Netflix spokesman, said the company isn’t surprised by customers’ reaction, though he argues the service is still a good deal even with the price increase. “We anticipated hearing from members about their concerns,” he said.

Really? You anticipated this?

Despite his protests to the contrary, these guys clearly did not see this coming and 48 hours late still don’t have a plan to address it. They did do two smart things however.

The first was not turn off the comments. I’m not sure if that is an insightful approach to making sure they receive unfiltered feedback from their consumers, or just a byproduct of having too much sand in their ears. I have my suspicions, but either way it was the right thing to do.

The second thing they did was to make the price increase effective after September 1 for existing customers. There will be some percentage of customers that will wait to cancel their services (since they don’t allow pro-rated refunds) and forget to do so before the deadline.  Not sure it’s a good customer service move, but it will probably help them save a few dollars.

After reflection, maybe one of those is just dumb luck and the other is just calculating. Time will tell.

But what to do?

I’ve been a Netflix customer for years; since shortly after they opened. Often with 2 DVD’s gathering dust for months on top of my VCR. I thought for a while that I would wait and see if there was a rollback on this decision before deciding if I would cancel or not. However, to Brad’s point, upon examining the value I receive vs. what I pay for, I’ll be canceling my account just as soon as this month is out. I already pay for Xfinity, HBO, and Amazon Prime and I barely use Netflix.

Thanks Netflix! Now that you’ve brought it to my attention, I can use that $180 a year somewhere else!

File under “it’s rarely too late to try to correct a mistake.” Especially if the mistake you are trying to correct is getting on the wrong side of people who make war for a living.

According to the Wall Street Journal:

Walt Disney Co. said Wednesday that it will withdraw its applications to trademark the term “SEAL Team 6″ for use on toys, games, and other consumer products.

A Disney spokesman said the company was withdrawing the applications “out of deference to the Navy.”

Read more…

I’m glad to see Disney correct this, but I’ve not yet been disabused of the notion that our trademark and patent system is due for an overhaul.

photo credit: ussocom_ru

I recommended in my post on the 13th that those responsible for this mess be fired; if not for ethics violations, then at least for incompetence. And there are people responsible for this on the Facebook as well as the Burson-Marsteller side of this debacle.

It is quickly becoming a grand case study of “How-Not-To-Do-It.” Now Burson-Marsteller admits to removing a post critical of their behavior from their fan page. Although they immediately backtracked and promised to issue an apology to the poster, the immediate knee-jerk behavior is old-school controlling to the core.

Thanks to Wired we know that the two responsible (or at least the two that are going to take the blame) on the Burson-Marteller side are going to get off scot-free:

Instead, Mercurio and Goldman, both high-profile former journalists new to Burson, will receive additional ethics training, the company said.

Really? Journalists, high-profile at that, didn’t understand the ethics of this? Didn’t get the sleaze factor? Didn’t think about the potential blow-back?

In every company I’ve ever been in, if you don’t get the culture and ethic of the company pretty quick you get fired. The entire things feels like spin-control and a cover up for more senior decision makers to me. If it really was just these two former journalists involved, Burson could have resolved this in hours.

I don’t know these men (and possibly women) involved, and I don’t have to. It’s not about them – it’s about the possibility of salvaging a company. It was a reputation damaging action and if Burson wants to keep any shred of its reputation and dignity, it should clean house now, not next week.

At least the Brits get it:

… the former Chairman and CEO of Burson’s British business absolutely ripped apart the firm’s tactics, calling them “furtive and creepy.”

I predict a mass exodus of the best and brightest from Burson in 3, 2, …

In the mean time Facebook, as noted by Dan Lyons in Facebook Smear Blame Game,

…will do what it always does when it gets into trouble: refuse to apologize, admit no wrongdoing, stop talking and wait for the storm to blow over.

If so, that would be the first smart move they’ve made in this sorry episode.

It might be the first smart move Dan, but it won’t replace the trust they just squandered in this “sorry episode.”

There has been a lot of noise recently around the question of whether or not we are in another tech bubble, primarily I believe, because of some of the recent high valuations and high-priced acquisitions. The acquisition of Skype by Microsoft last week is only going to serve to highlight the discussion.

There are of course, strong voices on either side of the argument. After all, the definition of a bubble changes depending largely on where one stands, and where they’ve placed their bets. The reality is that contractions and expansions are going to occur. It’s part of the market making adjustments and identifying the “top” or “bottom” is always elusive.  Here, The Economist takes a look at some of the ways the current state of economic affairs resembles the previous tech bubble, and some of the ways it does not.

Both articles on the subject are worth your time:

The new tech bubble: Irrational exuberance has returned to the internet world. Investors should beware.

Another digital gold rush: Internet companies are booming again. Does that mean it is time to buy or to sell?

Update: WSJ dives into a specific example with Gilt:

Gilt’s Hefty Valuation Puts New Web Boom to the Test

Wow. The sheer lack of respect. I’m not astounded that Disney pulled this stunt, but I am astounded that those in charge of the trademark office don’t have the common sense to reject this out of hand on the basis of well, sheer common sense. WTF!?

Some congresscritter should take the reform of the trademarks as well as the patent office on as a cause. There is enough screwed up stuff in both cases to make a career.

In a perfect example of a big media company looking to capitalize on current events, The Walt Disney Company has trademarked “Seal Team 6,” which also happens to be the name of the elite special forces team that killed Osama Bin Laden.

The trademark applications came on May 3rd, two days after the operation that killed Bin Laden… and two days after “Seal Team 6″  was included in thousands of news articles and TV programs focusing on the operation.

Disney’s trademark applications for “Seal Team 6″ cover clothing, footwear, headwear, toys, games and “entertainment and education services,” among other things. more…

I hope the Navy sues Disney and wins.

In case you haven’t seen the news:

The social-networking company secretly hired a public-relations firm to push stories critical of Google’s privacy practices. But the strategy backfired when bloggers and journalists disclosed Facebook’s behind-the-scenes role, forcing the company to explain its tactics.

Facebook hired WPP Group PLC’s Burson-Marsteller to pitch journalists and security experts on stories that questioned Google’s practice of collecting information from people’s Facebook and other social-networking accounts. Read more

Everyone involved at Facebook, Burson-Marsteller, and WPP Group is (or should be) embarrassed and ashamed. I wonder what they were thinking. Did they really believe they could use social media to run a behind-the-scenes smear campaign against a major competitor and get away with it? Social media is known for being transparent. Anyone that reads the news on a regular basis would have bet that this would have ended badly.

One might argue the case against firing the individuals responsible on the basis of character or ethics violations, but I defy anyone to argue that they shouldn’t be fired for incompetence.

From dozens of ad-hoc recommendations from Robert Scoble to two new product announcements from Marrisa Mayer of Google, it was easy to get lost in the deluge of information, perspectives, and opinions.

In thinking about the energy and optimism that saturated the room, I found myself reflecting on why I believe most people spend the money and time to attend conferences. Most people that I talk claim to go to conferences for one of two reasons: Information and/or networking.

I think there is a third reason to go. Even if I don’t learn anything or meet anyone new, just being in the presence of so many ideas and competing opinions gives rise to new ideas and new ways of looking at my industry, business, and client opportunities.

Kudos to ConvergeLabs for putting on a relevant conference that fills an interesting gap in the “So-Lo-Mo” space. The news and posts that the event spawned are numerous and wide ranging.

Thomas Clabum of Information Week leveraged the conference announcements to address Google’s social strategy

As did Ben Parr of Mashable. (His post had garnered over 1300 tweets as of this morning.)

Ronnie Kerr summarized and put in perspective the lack of “check-in” mentions at the conference

I thoroughly enjoyed the interactions, seeing old friends and making new ones. I also enjoyed the information both from the stage and from the vendors. But most of all I enjoyed the energy and left with some new ideas, insights, and solutions.

Media coverage is very important for startups. It is how they gain respect in their community, it is how they can win investors, and it is invaluable in helping to recruit staff.
Positive media coverage will also help gain users of their products and services, providing valuable marketing services that could cost tens of thousands of dollars.
But the only reason media coverage of a startup and their product is valuable is that the media coverage is seen as a neutral third party — it has no financial bias in its reporting.
Continue reading here…

A “Historical Moment.”

I, as everyone else, remember exactly where I was when I first heard the news of 9/11. And I have often wondered why, with all the full might and intelligence of our military, that we had yet to locate Osama bin Laden.

But now, we have. I’m sure we’ll learn more in the coming days of the search, operation, and killing of bin Laden. For now, we can be grateful that justice has been done, and without the loss of additional American lives.

Update:

I predict that it won’t be long before someone in the news media attempts to draw a parallel between the celebration outside the White House at the death of Osama bin Laden with the celebrations throughout the middle east on 9/11. They will conveniently forget to mention that in the case of the earlier, it was a celebration of the loss of innocent life, and in the case of tonight, it is a celebration of justice (however poor in taste some of the celebrations may have been).