Why Netflix Failed

What a Difference Vision Makes

On September 18th Reed Hastings, CEO of Netflix, announced that his company would split into two companies, Netflix Streaming and Quikster. The announcement was genius, revolutionary, ahead of its time … and a disaster. In just a few weeks, Netflix lost 800,000 subscribers and saw their stock drop 50 percent, forcing 2010’s Fortune Business Person of the Year to send out email and video apologies. What makes brilliant decisions flop, and how can you avoid a Hastings-esque failure?

Find a Vision

Is your company looking 5, 10, 15 years down the road? If not, then it is time to get started. Know where you want your company to be, and then write out the steps that will get you there. Netflix nailed this step. From its creation, Netflix saw itself 15 years into the future, in a world where video would be streamed and DVD’s would be extinct.

Inspect your industry, recognize recent and potential changes, and then decide how your company will still be a player in the future. Accounting firms might consider changes in government regulations, software, and investment trends. Pest control companies would be wise to recognize the public’s growing desire for chemical free or environmentally friendly treatments. Some companies may have a vision of a larger warehouse, new equipment, or additional services.

Share Your Vision

Give your customers an idea of what you are working towards by sharing with them your vision for the future. If your company is saving up to buy a new state-of-the-art tool or if you hope to decrease expenses by moving everything online, then tell your customers. Share this vision on your company’s website, business cards, or newsletters. People are programmed to align themselves behind big picture visions, even if it is as simple as a second storefront for their favorite diner.

Explain Company Actions in Terms of Your Vision

Netflix failed because it did not explain its increased prices in terms of its overall vision. If Reed Hastings had explained that Netflix was increasing prices so that it could invest in additional streaming content and technology, the public outcry would have been greatly diminished. It is possible that many users would have been excited for the increased prices, because it meant that Netflix would focus on its streamed content.

When your company changes anything, explain it in light of your vision. Customers get upset at meaningless changes, because they bring undue hassle into their life. When customers understand the purpose behind a change, even if it is inconvenient, they are much more likely to get excited for the big picture.

Google+ Lays the Groundwork for Business Profiles
(AdAge Digital)

After three months of testing the social-network waters, Google+ is finally ready to make a big splash. In the past week, it ditched its invite-only program, began promoting registration from its seen-by-millions-daily homepage and declared the network ready for brands. But in some cases, squatters have already claimed some valuable brand names on the network.

How brands reward loyalty [infographic]


A faithful customer is not only one who will stay loyal to a brand, they will also steer future business in the right direction. How does a brand thank such an individual? Take a look at how companies value their most treasured customers, and how they can improve their rewards programs to benefit both parties.

Ask A PPC Expert: Keywords

Keywords are the foundation of a paid search campaign, and a topic area we see many questions about. We’ve gathered previous questions we’ve received on keywords, and shared our answers for everyone to see.

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