Reed Hastings sure can't be accused of sugarcoating anything.
Yesterday, the Netflix CEO and his company made a few more statements about a planned price increase that has many customers accusing the company of greed and threatening to quit the service.
After Netflix announced the increase on July 12, some had predicted that the blistering customer response would force managers to recognize it had erred and re-evaluate its decision. On the contrary, in the most recent statements, the company sounded full of confidence and even cheerful about the financial benefits the price increase would offer Netflix.
Whether or not Netflix has good reason to raise prices, the company has demonstrated that it doesn't know how to deliver bad news. Two weeks ago, Netflix left it to a little-known manager to announce prices were going up in a blog post. Netflix informed customers that starting in September it would do away with a popular $10-per-month subscription plan that offered DVD rentals as well as unlimited access to the company's streaming-video library. Subscribers will have to pay for streaming and DVDs separately and each costs $7.99 per month, or $15.98 per month for both.
The message was a "a disaster," says Howard Belk, co-CEO and chief creative officer at Siegel + Gale, which advises companies on their brand strategies and customer experience. "The tone was wrong, the quantity of information was too little, and it came out of left field. The message didn't reflect any value to their customer base." … Read more