After two months of customer discontent over a price increase, Netflix CEO Reed Hastings poured fuel on the fire Monday with an email to his subscribers. He meant it as an apology. It read more as pure arrogance splashed over 661 words. Now subscribers have turned their anger directly on him. In other words, Hastings completely botched the whole thing, says L. Todd Thomas, a professor on business leadership at Northwood University. “I’m not even sure what he thought the outcome of that email was going to be,” Thomas says. “So yeah, it was a dumb move.”
In the email, Hastings did admit to a mistake. “I messed up,” he wrote. But he seemed to apologize for a lack of a communication, and by bringing up the price fiasco in detail again, he basically said, “I’m sorry you didn’t hear. Let me say it again.” Customers weren’t upset about the communication exactly, they were more discontented about the price increase and the division of Netflix’s video stream and DVD-by-mail service, Thomas says. Hastings should’ve sought hard data on just what upset subscribers. “He didn’t ask for costumer input,” he says. “Now he’s getting that input.”
An apology should be kept short, too. When Jeff Bezos apologized to Amazon users for pulling titles from the Kindle library, he wrote just a few lines. His worked. It was short and didn’t deviate from an apology’s goal — to admit blame and move on, says Thomas.
Hastings went on far too long in his email. He discussed the price change and then introduced a new business strategy, putting Netflix’s DVD-by-mail division into Qwikster, and complicated the email further. “It’s always better if you just stick to the apologies and then come back to everything else later,” Thomas says. “Tell us you learned that lesson, and then come back a week from now, two weeks from now and do it differently, but don’t include the apology and the strategy together. That never works.”
The entire thing felt shallow, too. To say you messed up and then not doing anything about it is bad. Worse still you might emulate Hastings and try to justify what you’ve just finished apologizing for. We get suspicious of an apology that turns into a justification.
What could Hastings have done differently? If he wanted to explain business strategy, then he should’ve waited to address that in an email to shareholders. (Those folks have spoken loudly lately. Netflix shares have dropped 57 percent in two months.) Or he could’ve accepted the hit and moved on. Instead he’s brought fresh attention to the whole situation. All perils associated with being the boss. Says Thomas, “The whole thing has made Hastings look pretty lame.”
