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Is Netflix Having a "New Coke" Moment? Not So Much

Why Netflix isn't as good as new coke

Netflix is being compared everywhere to Coca-Cola Corporation and their famous "New Coke" fiasco back in the 1980s.

What Coca-Cola Did Wrong
Sam Craig, professor of marketing and international business at the Stern School of Business at New York University, pointed to what he and other marketing experts have long considered the critical blunder that Coca-Cola made -  “They didn't ask the critical question of Coke users: Do you want a new Coke?".

So Coca-Cola backpedaled very quickly and re-introduced "old Coke" (calling it "Coke Classic") and, over time, phased out "New Coke."  Thus, Coca-Cola fans everywhere where made whole - they could get "old Coke" at the "old Price."

And that's what happened with Netflix - WAIT, no it didn't.
With Netflix, it's as if Coca-Cola jacked up the price of Coke by 60%, then discontinued Coke, introducing a New Coke that nobody wanted, and then when people got EVEN MORE upset, introduced Coke Classic at the same 60% premium and then expected people to be happy.

Coke: 1 Blunder; Netflix: 2 Blunders
Coke made one strategic mistake.  Netflix decided to make a habit out of it.

Although backtracking on this latest blunder shows at least a smidgen of contrition, a lot of people will still remember with anger the 60%+ price hike along with the explanation of the price hike as "being good for the consumer because now you have more choices."

Coke: 100% recovery; Netflix 50%
Coke executed well on the recovery, and dominates the market to this day. Netflix has made a half-hearted recovery. If you're going to backtrack, do a good job of it. Don't "Netflix" the recovery attempt too.

Netflix should have addressed both blunders. I'm not saying they needed to rescind the 60%+ price increase completely. But address the disingenuousness of their approach.  And apologize for it - for real.

Netflix Blows an Opportunity
Netflix missed the opportunity to go back to customers and say "we blew it...twice." Acknowledge the stupidity of their original communications - trying to justify the price increase based on "now you have more choice than ever."  Be honest and upfront - "it costs us $1.00 in postage for each DVD, so we need to raise our prices for people who want DVDs."

So yes, they backtracked. Whoopie. But they still haven't apologized for their biggest sin of all - disrespecting and not being honest with their customers.

More than anything else, customers hate feeling like they've been disrespected, lied to and been played as a fool. And I don't see how Netflix has changed that behavior much.

More Stories By Hollis Tibbetts

Hollis has established himself as a successful software marketing and technology expert. His various strategy, marketing and technology articles are read nearly 50,000 times a month. He is currently Director for Global Marketing Operations for Dell Software Group.

Hollis has developed substantial expertise in middleware, SaaS, Cloud, data management and distributed application technologies, with over 20 years experience in marketing, technical, product management, product marketing and business development roles at leading companies in such as Pervasive, Aruna (acquired by Progress Software), Sybase (now SAP), webMethods (now Software AG), M7 Corporation (acquired by BEA/Oracle), OnDisplay (acquired by Vignette) and KIVA Software (acquired by Netscape). He has established himself as an industry expert, having authored a large number of technology white papers, as well as published media articles and book contributions.

Hollis is a regularly featured blogger at ebizQ, a venue focused on enterprise technologies, with over 100,000 subscribers. He is also an author on Social Media Today "The World's Best Thinkers on Social Media", and maintains a blog focused on creating great software: Software Marketing 2013.
He tweets actively as @SoftwareHollis

Additional information is available at HollisTibbetts.com

All opinions expressed in the author's articles are his own personal opinions vs. those of his employer.