Why Did Netflix Apologize Now?

Yesterday, I started my day off with breakfast and an apology. A few months after Netflix stirred up quite a bit of unhappiness, they finally got around to saying sorry, and trying to explain why they are raising the prices on their loyal customers.

Here’s the apology/explanation part:

“So here is what we are doing and why.

Many members love our DVD service, as I do, because nearly every movie ever made is published on DVD. DVD is a great option for those who want the huge and comprehensive selection of movies.

I also love our streaming service because it is integrated into my TV, and I can watch anytime I want. The benefits of our streaming service are really quite different from the benefits of DVD by mail. We need to focus on rapid improvement as streaming technology and the market evolves, without maintaining compatibility with our DVD by mail service. [Editorial- Read:”We can’t get permission to stream our entire DVD catalog.”]

So we realized that streaming and DVD by mail are really becoming two different businesses, with very different cost structures, that need to be marketed differently, and we need to let each grow and operate independently.”

OK, was that so hard? I still don’t like the increase, but we will keep our plans, for now.

But why did my new best friend Reed send this out now?

Well ever since the news that Netflix had lost about a million DVD subscribers, stocks haven’t been doing so well. It seems a million customers decided they really didn’t need DVDs by mail after all. And Netflix sent out a report showing a larger than expected drop. You see, long term this is what Netflix wants. They want out of the mailing business. Here is a chart from back in 2010:

They expect(ed) DVD mailing to peak within a couple of years. And then decline over the next decade or so.

Once they split the DVD and streaming businesses under the Netflix name, and saw a million people opt out of DVD by mail, investors saw their stock drop 14% or so. Uh-oh. Netflix means to phase DVD mailing out anyway, but the more this part of their business declines (which is what they want) the less solid their stocks are (which they don’t want). Netflix has a problem.

Up in the sky! It’s a bird! No, a plane! No, it’s a poorly named spin off here to save the good name of Netflix. Qwikster is here!

The second half of the apology letter announced that Netflix was distancing themselves even more from DVDs by mail. That’s what really makes a good apology, back end it with even more bad news for your customers. Now, if they want to keep DVD streaming, they need to log into a totally different website. Integration is so last decade.

Oddly, even after this new Quikster launch, stocks did even worse.

But does Netflix care? A few weeks from now people who do DVDs by mail will be getting them with the new Quikster logo. Netflix will continue to work on deals to stream more content. And people will adjust. Then next quarter when Qwikster shows another decline in subscribers, Netflix stock will not be affected. Because Netflix will be a video streaming site, and it’s perception will be that they don’t have anything to do with mailing DVDs.

I think that is why we got this email apology now. It would have made more sense for Mr. Hastings to have sent this months ago, but they used an apology to soften the extra bit of hassle DVD subscribers were going to have to endure.

“Hey, we are so sorry that we raised our prices by 60% and then ignored all the protest about it, but here’s another minor inconvenience for you. Maybe you won’t notice that we just fire walled ourselves off from the continued decline of DVD by mail subscriptions.”

It’s the last part of the quote above that’s telling:

“So we realized that streaming and DVD by mail are really becoming two different businesses, with very different cost structures, that need to be marketed differently, and we need to let each grow and operate independently.”

They could just as well have said, “We realize that streaming is the future even if our investors don’t, so we have split the two businesses. Now we can let the DVD side die off without impacting our stock prices.” Remember the graph, back in 2010 they were projecting the death, not growth, of DVD mailing.

Long term this is probably a very smart move for Netflix. Sure, I won’t like going to Qwikster’s site to handle my DVD queue. But in a few years, I won’t need DVDs by mail, I’ll be streaming all my content.

Advertisement

Information is Not Power

Have you ever worked at a place where information was power? Ever find yourself falling into that mindset?

By holding information close, you get to be the one to make decisions. Only those who “know” can call the shots. Asking for help is a sign of weakness.

Oh, you may try to cover it up. You may defend keeping things close to the vest because you don’t want to worry others, or burden them with this decision. Stop acting like this is some gallant gesture on your part. It’s fun being in possession of more information that others in the organization. Meanwhile those who are probably most affected by any decision that may come from this information are destined to be caught off guard, surprised when it all comes out.

Or worse, when you do share you only give out enough information to get the job done. You hold close the details like they are secrets, and when it’s over you can relish the fact that you successfully accomplished your goal. That you, alone, did it. Because no one else could have done it, they didn’t know everything.

Being “in the know” is a symptom of a sick organization. I’ve seen businesses, organizations and churches that suffer from this sickness. People who work there may know that something is going on, but they have no details, no participation, and no personal investment. If you want “buy in” from your staff, volunteers and members, don’t treat information like power.

Information is not power.

Cooperation is power. You want to get something done? Talking and working together gets things done. Adding more people to the pool will exponentially increase your abilities.

Transparency breeds trust. You want people to buy into your organization? Be open. Obviously, there are times when information is sensitive, and has to be handled with care, but that should be the exception and not the rule. If there are hard decisions to be made, letting the people who serve with you know about it is a good thing. It helps them understand what is happening, so that when the decision come down they are not surprised. Hiding issues promotes an environment of fear and distrust. People feel secure when they know what’s going on, even if what is going on is bad. The more you can tell people when you can, the easier they will trust you when you can’t tell them everything.

Communication breeds cooperation. You want people to help you accomplish something? Talk about what you need and why you need it. When people know the end goal, they can all work toward it. If they only know part, they will tend to keep their focus small, even to the detriment of the overall project.

Put two canoes in the water with three paddlers in each. Tell both groups to move their canoe to the other side. Tell one group to work together, and tell the other to each find their own rhythm. Which do you think will reach the other shore first? Having been in similar boating situations, I can tell you the boat with everyone pulling together will make better time than the one with everyone doing their own thing. That’s not to say those paddlers are not paddling with all they have, they are just not working together. Some of the strokes are going to cancel out another’s effort. There will be splashes and distractions. There may even be moments when the canoe veers from its course.

Getting everyone to pull together for a common goal rather than simply focus on their own piece of the project will make the whole group more efficient.

Cooperation generates synergy. From synergy you get forward motion. Cooperation gives you the freedom to accomplish more. It is cooperation that brings real power, not information.

Unintended Messages: Club 44 and the Great Wall

How aware are you about what you are communicating? I don’t mean about what you are saying, but how aware are you about everything you are communicating?

One of the reasons I dislike email so much is that you miss tone of voice and body language, which are both huge when it comes to completely understanding another person. There is a lot more to communication than just words. Sometimes people send out unintended messages.

I noticed something this week at the annual NRB convention in Nashville. It is held at the beautiful Opryland Hotel. We don’t use all of the convention space, but we do take up about 3 floors in the Delta area with a little spill over. The bottom floor is for the expo, where you can see displays that range from tech to show content to ministries (and some stuff that just doesn’t make sense… I’ll have to write about that later). The top floor holds all the break out education sessions, and the middle floor is where the general sessions and special events take place. The middle floor is where we all get together. Everyone passes through there, it is right in the heart of the convention.

For the past few years convention registration was in the foyer out there, with a little coffee shop and some places to sit. I always thought it made sense to have registration right there, smack dab in the middle of things. This year, I think a couple of things came into play: The Expo display space has been shrinking for the last few years. I’m sure part of the blame is the economy, but this year you can cover the whole floor in a couple of hours. A few years ago they introduced Club 44 which is a lounge area for casual meetings and refreshments for people who don’t need actual hospitality suites but want a nice place to meet. Oh, access to that lounge area costs over $150 on top of your registration. Personally, I didn’t care a lick about that. They can charge $1500 if someone would be dumb enough to pay it.

This year though, they set things up a bit differently. Registration was moved downstairs to the entrance to the Expo floor. And Club 44 was set up in the foyer right outside the main gathering room.

The new arrangement encompasses all the chairs on this level. If you want to sit outside the main hall, you either pay your money or you sit on the floor. There is a huge wall dividing those who have the means to gain access to Club 44 and the rest of us. The Club is by the edge of the landing so they get the benefit of the natural light in the great hotel, but the tall wall puts the rest of us in the shadow.

I know it wasn’t intentional, but I got the message that the NRB considers making a place for people who will pay quite a bit more to meet with others more important than making me feel welcome. If I want to kick back with other conference attendees, I’m going to have to hike to another part of the massive hotel or cough up the cash. I know that having the registration downstairs helps to fill a shrinking show, and that having the Club 44 out on the landing probably saves having to rent another room, but it sends a definite divisive message to an organization that already has some divergent demographics. And I think it’s one that wasn’t meant to be sent.

I know it was unintended, but every time I walk by the wall, I shake my head.

Then I wonder how many messages I send, or that my church sends that we really didn’t mean to send? And that is much more important that whether I get to snag a couch seat close to the ballroom.

Chic Fila vs McDonald’s: Lesson From the Guest Experience

There are a lot of ways you can you can compare and contrast these two fast food restaurants, but I noticed something the other day with regard to how each handles the lunch rush.

We went for a lunch at McDonald’s. Like any rush at a McDonald’s there was a line to order and a line waiting for their food. My friends sat down waiting for our food and one commented about how much better a Chic Fila was run. Here was a general lunch rush and McDonald’s couldn’t keep up, while Chic Fila never seemed to have any problems with rushes, though they seemed to be just a busy during the meal times.

I thought about it for a second, and realized that it wasn’t that Chic Fila was that much faster than McDonald’s in making food, but the key difference is that Chic Fila will often bring your food out if there is a wait. (Some McDonald’s may as well, but I’ve been to enough to know it’s not common.) Franchises in malls have the same lines of waiting people that other fast food restaurants do, but their stand alone locations almost always have people find a seat, and bring their orders out when things get backed up.

The result is not only a feeling of a better run establishment, but a feeling that they care about you. There is no standing idle in earshot of every comment from the kitchen. The time is spent sitting at your table, with your drink, chatting with your friends and family, just like a sit down restaurant.

Chic Fila allows me to be comfortable at my table where I can talk with my friends, and makes me feel like they are adding layers of service to a fast food meal simply by having someone staffed to walk the orders out to guests. I get the impression that things are better run, whether they are or not. I have a more pleasant experience, and am more willing to come back when the restaurant is busy.

But if I see a McDonald’s with a long line, I may choose to go somewhere else. This one small thing helps set Chic Fila apart from other fast food restaurants.

What are we as ministries doing that gives the impression we don’t work efficiently? What little thing can we do that would make a first time experience better for guests? How can we make people comfortable?

Used Car Salesmen

Today I bought a used car for my wife. I started the process last Wednesday.

Why is it that some salesmen think they should try to argue you into buying a car? I was really doing a survey of automobiles and had no intention of buying one that day, and said so up front. I visited 8 dealerships. The tactics used ranged from no pressure to that thing where they bring their boss out to explain how financing a larger sum over a longer period means more security and doesn’t feel like more debt.

During one test drive a few days earlier I had decided that kind of car wasn’t for us. When I said I was not interested in this car, the salesman actual asked, “Why the h— did you drive my car then?” How else would I know if I I liked it or not? Isn’t it his job to try to put me with inventory he has that might fit my needs? We left without buying.

By the end of the day we had settled on one kind of car we wanted, and had seen a few of them.

We went to one of the places that had the model, features, and price we wanted. It was not a high pressure place. They post one price, and that’s it. When they came back with the total number package, and I wanted to haggle over my trade in value, they simply said, “We don’t negotiate.” When they say one price, they mean it.

It was a low pressure, pleasant experience.

What makes this different?

They didn’t try to talk me into anything. They let me decide for myself. They laid out what they offered, and simply left the decision up to me. It wasn’t adversarial. They had helpful sales people to answer questions. No hard feeling if I walked away.

The result of the search? We bought a car we liked, at a fair price, from a place that treated me like a guest, not the next sale.

How do we treat those who come into our lives?

Western Digital 1TB Hard Drive Resolution

A while back I posted about the RMA experience with WD. I lost a 1TB drive, lost over 700GBs of files, most of which I can rebuild, but it will take a while. You can read again the main issues, but in summary, it took over a month to get my replacement.

I was not happy. I finally called again, and the customer service rep immediately saw the issue, and did not make me go over it again. He asked his supervisor to swap me out with the 1TB Studio Edition (He said it was the same as the Home Edition, but formatted for Mac.) He came back on the phone to way it was approved, and would be processed within 48 business hours. And low and behold, by Tuesday I had a tracking number.

And it was for a next day air package!

So, I got the drive back, and surprise, it’s not just firewire, it’s firewire 800. Luckily I have both USB and firewire 800 connections so it will work great.

I am still not happy with the fact this took over a month, but once I went through their process, they did make it right.

Mickey’s Commandments #10: Keep it up

Part 10 in a 10 part series on Mickey’s Commandments as presented by Michael Lingerfelt, former Disney “imagineer”, in a recent conference.

10. Keep it up.

Maintain it. Right now if you go to Magic Kingdom you may be disappointed because Space Mountain is closed for remodeling. One of the store fronts on Main Street USA is covered over (in a very attractive way) while Disney works to keep the appearance and safety up.

The upkeep of what you have is critical, because while people who have been around a while may not notice something that’s broken or faded, for new people part of their first impression is the state of repair of your facility. Our church is over two decades old. There are a lot of things we should update, and will very soon.

When talking about this commandment, Michael Lingerfelt said something very interesting:

“Spend an extra dollar now, you will get a $6 return over it’s life.”

This goes to the heart of stewardship. How can we best utilize the resources available? Less expensive isn’t always better. Sometime less expensive means cheap. I have adopted the philosophy of spending that says if you can’t tell the difference, get the cheaper one. If you can tell the difference, get the better one, regardless of price.

Almost 20 years ago someone at First Orlando did the right thing. They bought a great quality broadcast capture system. I don’t know how much they spent, but we have state-of-the-art broadcast equipment for 1989. As a testimony to how good it is, we can still use it today to get a good quality picture. It’s old, and dying, but for over 19 years this equipment has helped us broadcast to tens of thousands of homes in the Orlando area every week.

As we look at replacing this gear with new HD broadcast equipment, we are taking a page from their book. While we are not buying the most expensive equipment available, we are buying top level, high quality broadcast gear from professional manufacturers. There are many kinds of gear that can do basic HD capture, but they are not true broadcast quality. Because we know we want this new gear to last a long time, and work without failure, we will replace our TV cameras and switchers with professional products. As it turns out, we are going to be able to get a great deal on this, too.

If Lingerfelt is to be believed (and I do believe him), paying a little more now for high quality equipment will save us a lot of time, money, and trouble over the next few years.

When looking at replacement or new purchases, can you tell the difference? If so, buy the better one. In the long run, it will save you more than any extra cost.

Mickey’s Commandment #9: An ounce of treatment and a pound of treat

Part 9 in a 10 part series on Mickey’s Commandments as presented by Michael Lingerfelt, former Disney “imagineer”, in a recent conference.

9. An ounce of treatment and a pound of treat

If you must ask people to go out of their way, or to do something unpleasant, make sure it’s worth their while. Make sure the payoff is worth the hassle. if you have to fix something, make sure the guest gets the benefit of the fix. I think the key to this commandment is that I can’t think of an example where Disney asked me to do something I didn’t want to do, mainly because any hassle I ever went through was overshadowed by what happened at the end. All I can think of are things I have experienced at other parks, which I don’t think Disney would ever do.

For churches and ministries, I think this applies in this way: When you have to say no, or have to take something away, make sure that the reasons for that are known. How will this change benefit? How does this further the calling God has placed on the church? How is the kingdom of God being advanced because we no longer do whatever it is we are no longer going to do? Is it a better use of resources, money or time?

We should never operate in darkness, but walk in the light. People will understand why we are taking things away if they hear the benefits of it.

This past year we stopped printing our bi-monthly magazine. The reasons were two-fold: money and effectiveness. We had just launched a new website that could do more than the magazine could ever dream, and was getting more traffic in a week than our mailing list. Plus, we could save tens of thousands of dollars every year, and get back hours and hours of production time to use on other projects.

We went out of our way to talk about what we were doing and why before we did it; platform time, bulletin content, even the entire last issue of the magazine was devoted to explaining how stopping the magazine was a good thing. From a mailing list of about 8000 we got six real complaints. Most of the people we heard from said that they were sad the magazine would stop, but they understood why we were doing it.

When making changes that might be seen as taking something away, or seen negatively, make sure you are communicating the reasons why and the ways it will help.

Mickey’s Commandments #8: Avoid contradiction

Part 8 in a 10 part series on Mickey’s Commandments as presented by Michael Lingerfelt, former Disney “imagineer”, in a recent conference.

8. Avoid contradiction.

If you could be everywhere in Walt Disney World at once you would never find more than one Mickey Mouse. Why? Because there is only one Mickey Mouse. So if he is at Magic Kingdom signing autographs he cannot be at Animal Kingdom in a parade. Why does it matter if someone in a character costume would appear in two different places at the same time? Because there is only ONE Mickey Mouse.

Avoiding contradiction relates to yesterday’s post about telling on story at a time, but another major area where ministries can accidently cause confusion is in brand identity.

Before I go on, let me quote Phil Cooke on what branding actually is:

“At its core, branding is simply the art of surrounding a product, organization, or person with a powerful and compelling story.” (“Branding Faith“, 2008)

I am not going to explain how to brand something, or to go into detail about the differences between a brand identity and a logo, between an actual brand and how your ministry, church, or organization is identified. There are lots of book out about that. Suffice it to say that when your logo or name is seen, it evokes a brand identity.

Our goal at church is that when people see our logo or read our name, it brings to mind the story of who we are as a church. One of the things we fight is a confusion of brand identity when people use different logos or different names to refer to our organization. A few years ago, before I came on staff, the whole church went through a rebranding process, to reflect the new vision of the new pastor. With that re-branding came a new way to refer to the church. New logos and a new way to name the church were adopted.

To this day, people still name the church something else. Specifically, before it was a common practice to refer to the church as FBCO, or worse FBC/O. Now, under the new rules from the rebranding, we refer to the church as First Orlando or First Baptist Orlando, or if you must abbreviate, then it is FBO. We even fight this for email, because fbcorlando.com domains still work, but we want people to use firstorlando.com.

Why does it matter? As we develop our story, our brand in the community and within our walls, we want people to bring to mind immediately the brand of the church when they see our logo or read our name. We want no confusion or contradiction. FBC/O brings to mind a different, older brand. It’s not a bad brand, there was nothing wrong with that story, but it’s not our current story. It’s not who we are now. We have moved on to a new chapter.

Part of my job is to be the brand police and help educate people on how we refer to the church. Just yesterday I was talking to a group of staff from our church, and mentioned the brand changes, reminding them of the rules in how we refer to our church. A few jaws dropped. Old habits die hard.

But the effort to keep the brand unified, and to keep our story compelling and not confusing is a worthwhile one. We still have a ways to go.

Mickey’s Commandment #7: Tell one story at a time

Part 7 in a 10 part series on Mickey’s Commandments as presented by Michael Lingerfelt in a recent conference.

7. Tell one story at a time.

This one really resonated with me.

The Magic Kingdom is a great example of how Disney does this. They use the “utilador” under the main park to get people from area to another. You will never see someone dressed for work in Tommorrowland walking through Frontierland. You can’t even see Frontierland from Tommorrowland. There is one theme in each area, and they have gone out of their way to make sure you only experience one at a time. Part of this relates back to the previous commandment.

They know that multiple stories distract from each other. They know that mixing up stories can confuse people.

I asked a question about this commandment: When you work with very talented people, who have a lot of stories to tell, how do you limit them to just one? If you use the storyboard analogy, it may be that the new story could fit in another time, and the main story progresses. Or it may be that while the new story idea is amazing, it just won’t fit into the overall story line. That doesn’t make it a bad story, just not the right for one.

I see the “storyboard” as the vision for the church, the plot. And the various story lines that come into play as ministries an events, and mission endeavors that help bring that vision to fulfillment. If a “story” doesn’t progress along the main plot, it’s a distraction. it shouldn’t make it past the edit. Not because that story is bad, or worth less than another, but because it doesn’t fit with the plot of the storyboard.

Telling one story at a time helps us keep consistent in our messages. I can’t say that going on a mission trip is the most important thing you can do if I have already said that the most important thing you can do is get involved in a small group. If I am telling the same story, then I am telling people to get into a small group and grow, and then look for ways to serve through local and global missions.

When we are not all telling the same story, we find ourselves in competition for attention. And we are not competing with the world, we are competing with each other.

What is the purpose of your local body? What has God called your church or ministry to do? Do it, and keep all your efforts working toward that common goal. Don’t let good things distract you from the things God has called you toward.