Reed Hastings should apologize. Or be able to laugh at his own mistakes. Or at least offer consumers a consolation prize.
Either way, a Super Bowl ad this year would have been a great way to curry some favor with consumers again after splitting up its disc mailing and streaming services, jacking up prices as a result and chasing away roughly 800,000 subscribers in the third quarter alone. Coupled with Netflix's failure to keep Liberty Starz on as a partner, the price hike seriously angered a lot of folks who otherwise may have stuck around to see Netflix revive Arrested Development and add streaming partners.
The company and its shareholders have been paying the price. Share prices fell by roughly two-thirds and management warned that the company would report a loss in some quarters of 2012 and later revised the outlook saying it will lose money for all of the year. The shareholders didn't like that one bit and sued Netflix earlier this month, alleging that the company's management withheld information.While the share price has recovered by more than 40% and the company has yet to report its fourth-quarter numbers, Netflix is missing a big goodwill opportunity by sitting on the sidelines and admitting nothing while Super Bowl commercials roll by. Doesn't it concern Netflix that Amazon (AMZN) seems dead serious about bulking up its Amazon Prime streaming offerings that already come with shipping incentives for the online superstore's customers? Isn't it concerned that Hulu is also rolling out original content and taking a share of potential subscribers? Either of the teams playing in this year's Super Bowl could probably tell Netflix about the perils of sitting on a lead and going into the "prevent" defense. Sometimes, it just prevents you from winning. Going on offense, taking out a Super Bowl ad showing even a shred of humility and using it as an opportunity to reward customers who stayed while recruiting new ones could have been a winning strategy. It's too bad Netflix is just trying to run out the clock until DVDs die.