Netflix: Too little, too late?


Posted by Neil Wilson on 10/12/11 4:00 AM

[Note: This is an update to our previous post on this topic.]

On Monday Netflix announced a reversal of their decision to splinter their user base by separating their DVD-by-mail business – to be named Qwikster – from their online streaming video service that would retain the Netflix name.

I don’t believe that I can say it any better than what Netflix co-founder and CEO Reed Hastings said in the post on the Netflix blog from above (the emphasis is mine):

“It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs.

This means no change: one website, one account, one password… in other words, no Qwikster.”

What a great example of why the customer experience matters so much for companies selling products and services on the Internet. Regardless of how many services or products we have purchased from a company, we want to be treated as one single (unified) customer: one website, one account, one password, one set of preferences, one set of billing data, etc. As simple as this may sound, so many companies fall short of delivering this to their customers.

I’m happy that as a Netflix customer I will not be forced to manage yet another online identity to take advantage of all the services Netflix has to offer. I’m also happy as a professional working for a company that provides solutions to companies like Netflix for unifying, securing, and monetizing their subscriber (customer identity) data that they are doing the right thing by ensuring that their subscribers have a consistent experience across their services. As I said in my first post on this topic:

“You take care of them and offer a unified experience, and they chose to buy more from you.”

While happy with their decision, I must admit that I am still surprised that they made both of these decisions so quickly. One might argue that this is a bad sign and points to mismanagement on their part. I’m not convinced. I still believe Netflix offers one of the best video services available today, and they still have enough consumer capital with me for me to buy their story that this was a case of them “moving too fast”. Fast indeed. If you’ve ever spent any time working for a large company, or any bureaucracy for that matter, then you’ve got to admit that for any public company to move this quickly on decisions of this caliber is impressive. I understand that some may consider this frightening as opposed to impressive, but given how hard I know it is to make and execute on decisions for most companies, I’m impressed.

At UnboundID, we often say that customer identity or subscriber data is the key to monetization for companies selling products directly to consumers on the Internet today. I certainly believe that Netflix’s recent debacle is a great of example of why this is true.

Topics: Customer Experience , Data Management