Netflix: Is Hastings’ Mea Culpa Too Little, Too Late?

It's not often a CEO of an established company issues a letter to customers that includes the phrase, "I messed up..." But it's also not often a company loses one million customers in a period of just a few months thanks to controversial pricing and service changes. But that's just what happened to Netflix and its much-touted leader Reed Hastings.

In July, Netflix announced a 60% increase for unlimited online movie streaming and one snail-mailed DVD at a time. Customer reaction back then was swift and mostly negative, but the company largely ignored their outrage. Now that Netflix shares fell 15% and they've lost customers in the seven figures, they decided to act. No, the company didn't roll back the price increase. Instead it split the DVD-by-mail service and the streaming service into two separate entities. More telling was Hastings' letter, which blamed his own "arrogance based on past success" as the reason for the poor customer communications.

Was this poor communications to customers from the get-go? Eric Dezenhall, of crisis consultancy Dezenhall Resources, says yes and no. "Could the up-front communications have been handled better? Sure, a little," says Dezenhall. "But it's not the communications that are really at issue here, it's the disruption of a business model." Dezenhall goes on to say that Hastings' mea culpa is a basic cost of doing business these days. "Self-flagellation and seeking forgiveness for 'miscommunication' is part of the dance," he says. "It won't buy him much, but imagine what would happen if he didn't do it."

Do you agree with Dezenhall's assertion that this was not a communications problem? What does this episode do to Reed Hastings' reputation as a top digital media innovator? And what can Netflix do from a PR standpoint in the near-term to get former customers back?

1 Comment

Deals of the Week

Get $200 Off PR News' Digital PR Conference

Join us June 1-3 where you'll hear from top brands such as Walmart, Miami Heat, Verizon and Ritz-Carlton on PR and communication best practices for the next wave of digital trends.

Use code “200off” at checkout to save $200 on the regular rate.

Get $50 off PR News' Book of Employee Communications


In this 5th volume of PR News’ Book of Employee Communications, our authors cover more than 45 articles on crisis communications, social media policies, human resources collaboration, brand evangelism and more.

Use code “50off” at checkout.

Save $100 on a PR News Subscription


Let PR News become your weekly, go-to resource for the latest PR trends, case studies and tip sheets. Topics covered include visual storytelling, social media, measurement, crisis management and media relations.

Use code “SUBDEAL” at checkout.

  • Matt B.

    I believe an email notification explaining what and why… would have helped, at least from a disclosure stance. “We screwed up, but you are still getting a heck of a deal” etc…Because it is still a great deal…

    never underestimated the power of saying you are human and make mistakes…