Netflix Raises Prices – and No One Freaks Out

NETFLIX TV 150x150 Netflix Raises Prices   and No One Freaks Out

THE PR VERDICT: “A” (PR PERFECT) for Netflix.

This time they warned you – Netflix, that is. The on-demand streaming video service that scored one of the worst marketing and PR flops since the introduction of New Coke when they raised their rates in 2011. They announced a price increase for rentals last week, but this time in a way structured to keep existing customers happy – and investors, too.

You might recall Qwikster, the company’s ill-conceived DVD-only service, spun off in 2011 in the wake of a controversial and unpopular price hike that effectively doubled the cost of rentals. Subscribers rebelled and quit in droves, and Netflix reversed course, killing the service before it ever launched. It then spent much of the next year apologizing and begging customers to come back.

Clearly the company learned something from that experience. This time, Netflix moved methodically, initially raising the prospect of price increases months ago. It firmed up that news in late April with a letter to shareholders announcing a pending increase of “one or two” dollars. The final word came in an email to customers Friday – a $1 bump, but only for new customers, and no increase for existing members for two years. So far, the villagers have yet to light their torches or storm the castle.

THE PR VERDICT: “A” (PR Perfect) for Netflix, for taking the time to set appropriate expectations.

THE PR TAKEAWAY: Timing is everything – and that doesn’t always mean just picking the right moment. Netflix, looking to avoid another mass stampede of customers for the exits, wisely started telegraphing its intentions on pricing months before actually announcing the increase. This amounted to a period of test marketing, giving both Netflix subscribers and investors time to get used to the idea. Then, by grandfathering in existing customers at the current price for two years, Netflix actually won a measure of goodwill, solely becauset it set expectations of a price increase for everyone. Investors liked the news also, sending the company’s stock up on the increase.

The PRV Report Card: This Week’s Winners & Losers

 The PRV Report Card: This Weeks Winners & LosersPR WINNER OF THE WEEK: “A” (PR PERFECT) to Lupita Nyong’o, whose star continues to rise with this week’s announcement that she won the cover of People Magazine’s “Most Beautiful” issue. This can be attributed to Nyong’o’s obvious beauty – a welcome sign that the days when magazines shied away from putting women of color on covers are over – her Oscar-winning performance in 12 Years a Slave, and doubtless a team of PRs and managers who have kept Nyong’o in the public eye, steadily but not to the point of over-saturation. Congratulations, Team Lupita.

 The PRV Report Card: This Weeks Winners & LosersPR LOSER OF THE WEEK: “F” (FULL FIASCO) to Bryan Singer, director of X-Men: Days of Future Past. Singer pulled out of publicity appearances at last week’s WonderCon and will likely remain behind the scenes after a lawsuit was filed accusing him and three other men of sex abuse of minors. “I do not want these fictitious claims to divert ANY attention from X-Men,” Singer’s PR statement read. 20th Century Fox, which will release X-Men next month, issued a terse comment a week ago: “This is a personal matter, which Bryan Singer and his representatives are addressing separately.” Time to distance a director accused of abusing teenagers from a product marketed to teenagers.

rove The PRV Report Card: This Weeks Winners & LosersTHE PRV “THERE’S NO ‘THERE’ THERE” AWARD to Karl Rove, Bill Kristol and other Republican-Conservative strategists/pundits, for stepping in to “unskew” a New York Times poll favorable to Obamacare and Democratic Senate candidates. The Times poll, conducted with the Kaiser Family Foundation, found Democrats running ahead of or, at worst, neck and neck with GOP opponents in traditionally conservative Southern states. “Badly done,” Rove said of the poll. Kristol and the Republican National Committee were more snarky. But none, including Rove, who famously freaked when Fox News called the Presidential election for Obama two years ago, offered more than opinion to refute the poll.

Lack of ‘Frozen’ Merch Means Chilly PR for Disney

princess elsa 150x150 Lack of ‘Frozen’ Merch Means Chilly PR for Disney

THE PR VERDICT: “D” (PR Problematic) for Disney. (Pictured: Princess Elsa from Frozen.)

Call it a “good news, bad news” scenario. Disney is currently enjoying the success of its movie Frozen becoming the highest-grossing animated film of all time. They can’t gloat for too long, though; the news has shifted from accolades to tears of frustration and temper tantrums, both from children and adults. The problem? A shortage of Frozen merchandise.

Social media hath no fury like mommies frustrated by not being able to buy their children what they want. Specifically, the Princess Elsa dress – a sparkly blue gown like the one worn by Frozen’s heroine. The movie was already a hit, the DVD is now out and reaching an even larger audience, and worldwide demand for the dress far exceeds supply. The costume, usually around $50 in the US, is apparently going for over $1000 on ebay. If you can find one.

When has Disney ever underestimated the popularity of one of its movies? It’s possible that this film became bigger than even the Mouse House foresaw. But with frustrations raging online and in the media from mothers who can’t get what their kids want, Disney had better grant some wishes soon.

THE PR VERDICT: “D” (PR Problematic) for Disney. The low grade is not for running out of merchandise, but because running out implies underestimating their own success, and being unable to rectify the situation.

THE PR TAKEAWAY: Spin! Spin like a princess at the ball, and then be a fairy godmother, granting your consumers’ wishes. First thing should be a statement saying how fantastic it is that your widgets were so popular that demand for them exceeded supply. Second is getting more widgets out quickly, in this case before a sweet animated movie invokes episodes more like The Hunger Games. This is a problem every company dreams of, but action keeps it from turning into a PR nightmare.

The PR of Pulling the Plug Before Opening Night

 The PR of Pulling the Plug Before Opening Night

THE PR VERDICT: “D” (PR Problematic) for Radio City Music Hall’s “Heart and Lights.”

Radio City Music Hall’s big draw is the Christmas Spectacular, but owner Madison Square Garden Company had big plans for a similar annual attraction for the spring tourist season. “Heart and Lights,” a musical production starring the Rockettes, is a $25 million extravaganza that was set to debut this Thursday. Instead, the show has closed before it’s even begun.

An article in yesterday’s New York Times details the fallout: millions in lost ad revenue and ticket refunds, the theater dark for five weeks. What has been gained is immunity from reviews that might have killed the show permanently.

Another gain is bad press. The first question facing MSGC executive chairman James L. Dolan was whether to let the show run and work out its kinks in previews, though apparently the problems were too large. Decision made, the next issue is the explanation of why the multi-million dollar show would not go on. Publicist Leslie Sloane Zelnick chose to let Dolan come relatively clean in an attempt to control fallout. A win, or a loss? More like a toss up.

THE PR VERDICT: “D” (PR Problematic) for Radio City Music Hall’s “Heart and Lights.” Now there are two storylines to fix.

THE PR TAKEAWAY: When the news is bad, you’re less damned if you do than if you don’t. Rarely will producers shut down a show as expensive as this a mere week before opening night. There’s no way to contain press that bad, except to open the door on it. In this way a flak can form the script: True, the show isn’t great – but MSGC would rather take the loss and put out a better show. Or so you hope the media and public will believe. Failing that, all will be forgotten by the show’s new opening night, a year from now.

To read the Times article, click here.

Netflix: From Doghouse to Darling

netflix Netflix: From Doghouse to Darling

THE PR VERDICT: “A” (PR Perfect) to Netflix, for making its own luck.

Sometimes, the famously fickle PR gods send you a gift, and if you’re lucky, smart, or both, you’ll get a chance to use it. This week’s beneficiary: Netflix. Two years ago, the video streaming and DVD rental company was a case study – literally – on how to fail a thriving enterprise, with questionable pricing and business decisions that sent subscribers stampeding for the exits. Netflix became the poster child for PR ignorance and customer neglect, losing nearly one million subscribers over a matter of months.

Then, a chastened Netflix started to turn it around. It reversed unpopular business decisions and issued a sincere (and persistent) mea culpa. It aligned its communications strategy with its business plan, breaking new ground for a streaming service by providing original content. Today, its subscriber base surpasses HBO’s and its stock price is six times what it was only a year ago. Quarterly earnings are next week.

And the gift? Just a humorous online chat between a funny, friendly, and helpful Netflix customer service representative and a user with a video playback problem. A screenshot of the Star Trek-themed dialogue was posted online on Imgur and Reddit and is getting wider attention. Netflix is getting free publicity from it – earned the hard way, and through hard work.

THE PR VERDICT: “A” (PR Perfect) for Netflix, for a turnaround in tone, culture, and attitude that turned around its business.

THE PR TAKEAWAY: Good communication is contagious. Netflix’s earnest soul-searching two years ago, translated into words and actions, now appears to touch even the most routine business activities. Granted, maybe not all of Netflix’s help calls end as happily – customer service is a weak spot for many firms. But this exchange garnered publicity precisely because it speaks to a prevailing positive mindset that has formed about the company, one that seems to attract great employees as well as loyal, happy customers. Netflix provides an object lesson in how good conmunications helps throughout an organization. Its little PR gift also confirms that luck doesn’t just happen; you make your own.

The PRV Report Card: This Week’s Winners & Losers

 The PRV Report Card: This Weeks Winners & LosersPR WINNER OF THE WEEK: “A” (PR Perfect) to Michael J. Fox , who took the “making lemonade out of lemons” maxim to a whole new level with the premiere of his new television show.  In Fox’s eponymously named sitcom, he plays a character who, like the actor himself, is returning to work while living with Parkinson’s disease. Fox, who was diagnosed with Parkinson’s more than a decade ago, is raising awareness of a debilitating disease that afflicts somewhere between 7-10 million people worldwide. Regardless of whether the show is a hit, it’s a PR coup, informing and educating and making life that much easier for those with the disease.

 

joekcnbc The PRV Report Card: This Weeks Winners & LosersPR LOSER OF THE WEEK: “F” (Full Fiasco) to Joe Kernen, a host on business channel CNBC, for on-air racist comments that he somehow thought were funny. Bantering with co-hosts a week ago on interest rate action taken by India’s central bank, Kernen morphed into a stereotypical Indian accent at the mention of rupees. But it didn’t end there. Visibly struggling with his own better judgment for several seconds, Kernen finally gave in to his inner trading “bro.” “Are they good at 7-11?” he asked, causing his co-hosts to squirm and scold. He added a quick “faux-pology” before the segment ended, saying: “I take it back. I apologize, before I have to.” Before he had to? Clearly he knew better before the words crossed his lips. Kernen later issued a more official apology for his “inappropriate and insensitive remark.” But one wonders what CNBC’s editor-in-chief and Kernen’s boss, Nikhil Deogun, an Indian-American from Kolkata, thought of the “joke.”

 The PRV Report Card: This Weeks Winners & LosersTHE PRV “THERE’S NO ‘THERE’ THERE” AWARD to the masterminds behind the Cory Booker “stripper scandal.” Booker, the Democratic mayor of Newark, NJ who has been campaigning for a seat in the senate, found himself being questioned by the media to explain his connection with a stripper. Scandal! Or is it? On closer inspection of the story initially broken by BuzzFeed…nyeh. Booker became acquainted with Lynsie Lee when they appeared in a film about social media. The mayor and the stripper, who works at the world’s first vegan strip club, have been tweeting, but rather tamely. “The mayor talks with people from all walks of life on Twitter,” said a spokesman. “The most shocking part of the story was learning that there is a vegan strip club in Portland.”