Ad News - 9/22

Netflix's Attempt at 'Transparency' Angers Consumers, Hurts Brand

Another PR Debacle Erases Gains Made Since Last One

This article yet again touches on the recent email sent out to subscribers of Netflix explaining the separation of the two companies Netflix and Qwikster. Netflix will remain the streaming only service and Qwikster will become the DVD-mail service. Many consumers seem baffled at the separation of services and the change in brand name and price. As the article states, according to an Adage.com poll 83% of pollers said that the move would hurt the company. Netflix's stock has dropped 19%, and the company is definitely feeling the impact of the changes. The email, Reed Hastings sent out was an attempt to mend some of the hurt feelings consumers were obviously experiencing, but in many people's eyes, the email seemed to back fire.

Questions:

1. What steps could Netflix have taken to avoid such a consumer backlash? Or could take now?

2. Many people felt the price changes were a shock, if the CEO had sent out the same email previous to the price changes, do you think consumers would have handled it better?

3. Do you think Netflix/Qwikster will experience long term loss in subscriptions or this is a short term 'disagreement' that people will soon forget?