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Marketing expert Jeffrey Hayzlett on Netflix’s decision to scrap plans to split its dvd rental and streaming-video services.
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Fled stock down nearly five per cent today on a -- the rest of the stock market took off like a rocket.
Company -- plans to separate its dvd rentals from its digital inventory but Netflix.
Not reversing a price hikes causing customers says take a hike.
Marketing expert Geoffrey -- let Laura -- on this very show about the move to put the need eighty business into a company -- -- or listen.
I mean the good news that's gonna come out of this is no longer -- new -- be the worst public announcement it's really gonna be quick stir which I'm saying is -- -- Two weeks later.
Jeffrey is right and his back with best Jeffrey to the public really want an about face really on on the.
I think it's a key thing here they got there the increase no matter what I mean the what they did was go through and they've been embarrassed are they doing it not doing it doing it not doing it that's what it was all about I mean even the new CEO that they named a few weeks ago think about this got.
His tenure as an officer is shorter -- Charlie sheen's character on Wall Street the movie when bud fox took over blue star industries I mean perception is that short.
Okay -- the analogy what is the thinking I mean really what is the that the corporate strategy -- -- and any CEO but I mean is this unprecedented.
No this is this is probably as I said before bonehead move before where they did the apology in the middle of announcing the new announcement about the service.
And then they backed off and they're only talking about a few million of their customers really.
It was all about you know back in July they raise the prices some 60% lost 60% of their share value which is come down.
And in the end it lost about 20 let's say about a 1000002 million of their customer so not that much about -- than 5% and net.
Like -- to increase prices.
To stay.
In good.
As well I think it's always if you're doing their business you're gonna raise your prices much as possible -- another singer listen the customers weren't they doing that before.
You know I think it's a good thing for business to do and I think in the end it's still a good service for me don't get me -- still good service for for the money you still can't get up a movie you know -- -- -- a coconut hot dog if you go out.
This year to stay in and go home.
You get to be the quarterbacking items like this so how how would -- handle this it you.
I would have set back when they first announced back in July would have sit down and said let's take the heat it's -- come we know what a price increases and -- happy thing for most customers.
And just sit down I think here yet people watching the stark stock portfolios are worried about their value and they panicked and I will also net.
Flicks mentioned the pricing controversy in -- a letter to customers just released this afternoon detailing quick Starr's reversal saying quote.
While the July price change was necessary we are now dying.
With price changes I mean that's not going to appease anyone why pretty in a letter now -- -- eating the.
Yeah out on top of it they've lost 200 hours where the share price on top of it I mean so you look at the company they've really lost -- -- -- -- move then it's a bonehead move now I think it's still better I think it was a necessary kind of evil to -- Of a reversal the bad decision but in the end they didn't have to do in the first place that's the real question is why did they do this in the first place.
Okay.
We're beating up on Netflix contents still impressive.
-- Netflix bounce back from this debacle.
They certainly can't today that they're good cut them in they get a good business some 33 million subscribers or thereabouts between the two.
Types of serviced traditional DVD in the streaming.
You know they got some real competition you -- Amazon coming on strong with what they're doing on the strong side.
Apple we never know what Apple's gonna do in certainly now you're seeing a lot more -- go over the DISH Network and and end of Blockbuster so lots of different things and a comment.
Is there any way to incentivize existing subscribers.
And anyway to lure new subscribers -- how -- is competitive pricing we're gonna become.
Hello it's going to be tight but if you give good service people are gonna stick with -- no matter what I think that's the key I think most customers are gonna sit back and say am -- gonna have to go through.
Two weeks what are they gonna change now am I gonna lose this am I gonna get this faster if you're giving good service giving great product you're always gonna be good in into a for -- back.
Which in your opinion hearing now says streaming video providers that which is the best con tent and which is the most excess of.
Well I'm a I'm also a customer of a couple these but I'm a customer Netflix I still think they're doing a great job I mean there was don't get that wrong they've they've -- the first ones in this business and they did it well they've built up a good good good loyal base the key is whether they're gonna keep it and whether or keep entice me wanna -- That's -- and what that's -- interesting how we're seeing the evolution right of these dvd rental.
-- -- Netflix -- and it's actually quite brilliant how their how their evolving so what's the next step.
Well I think that was a big thing for Netflix to have to leave back to traditional business that's why program probably would have said it was Netflix classic rather than -- quick stormy quick -- now the term perceive your leadership that actually makes incompetent decisions.
Baby number two C Reed Hastings that the CEO I mean that's really what this has become.
You headed trends for from a from what the traditional business to a digital business lots of companies are doing this all over the place not just in this in this -- But in lots of other industries and I still think they can get that done Jeff are a pleasure talking to you -- they always hedge.
