Netflix is an American Company that specializes in providing online streaming media as demanded by its customers in Canada, the United States and Latin America. It is also known for its by-mail DVD delivery services to millions of subscribers across the United States. By the end of February 2007, Netflix had realized a billionth delivery of its DVD. Its recent move to rebrand DVD rental services into an independent subsidiary company called Qwikster raised mixed reactions among customers and other analysts.
The move by the company could be one of the best decisions ever made by the management as echoed by the company’s chief executive officer, Mr. Reed Hastings. Based on the long term strategies that the company is focused on, it is aimed at enhancing a sustainable competitive advantage for long term business operations.
By separating renting of DVDs from online streaming of movies, the company is likely to expand its customer base and meet their individual needs based on specialized services and products being offered by individual companies with distinct websites i.e. Qwikster.com and Netflix.com.
On the other hand, the move may have a negative impact on the company in terms of its relationship with customers and its ability to win their confidence through rebranding. Notably, the reactions from customers on facebook page of over 16,000 subscribers indicate that the move was not welcome by most of its subscribers who think that this would inconvenience them.
Although the move may turn out profitable, reactions from subscribers show that most of them were not well informed about the rebranding changes. Moreover, it is not clear why the company was renaming a brand which has continuously built its reputation.
It is true that streaming will allow quicker services to consumers as compared to DVD mailing. With this in mind, it is not clear why the company had to rename the brand. From this perspective, it could be viewed that the move targets benefiting the interests of the company at the expense of its subscribers.
What should Netflix do? Regardless of the future plan of the company in terms of expansion and digitalization of its services, consumer satisfaction is equally important. From the enormous negative comments noted by customers, there seem to be some disconnection between the vision of the company and the needs of its customers.
Of significance would therefore be reassuring current and prospective customers of the expected advantages of renaming and rebranding the company in order to win their trust and develop a good public image. Together with the entire management, Mr. Hastings has the responsibility of clearly weighing the benefits of Qwickster against the disadvantages of DVD mailing that has built the company’s reputation for years.
As mentioned in the above segment, the need to pass information to existing and prospective customers cannot be ignored by Netflix. This is key in assuring consumers that they are still valuable and relevant amidst renaming and rebranding. Nevertheless, the mode of communication has to be founded on convenience and accessibility.
After the announcement was made on a Sunday evening, the company recorded comments from over sixteen thousand customers in less than twenty four hours. This implies that most of the company’s subscribers appreciate the role of social networks in communication and business marketing. The company should consider using Facebook and Twitter in reaching out to its subscribers through adverts and updates that insinuate benefits of the move and discussions to address customers’ concerns.