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.

Cuisine Queen Burns to a Crisp

 Cuisine Queen Burns to a Crisp

THE PR VERDICT: “F” (Full Fiasco) for Paula Deen and her PR team.

In the annals of PR freefall, celebrity chef Paula Deen is now a case study. Last week, the queen of Southern cuisine faced a deposition by a former employee who charged that Deen used racial slurs in the workplace. Problematic, to be sure – yet that was only the beginning.

During the deposition, Deen was asked if she had ever used the “n” word. Her answer? “Of course” – one can only imagine a member of her PR team having heart palpitations – “probably when a black man burst into the bank I was working at and put a gun to my head.” This came across rather like justification. The deposition stated that Deen used the slur more recently, in reference to servers for a Deen-planned wedding reception with a Plantation theme.

But wait, it gets better, or rather, worse. Deen scheduled a damage control appearance on the Today Show, but come Friday morning, she was a no-show. An irked Matt Lauer reported, “Her publicist says she’s exhausted.” Probably from the news that the Food Network, on which Deen has several shows, was not renewing her contract.

Then came the apology videos. The first, slickly produced by Deen’s team, lasted a single derided hour before being replaced by an unedited video that came across the same as the first: Deen was sorry – mostly, it seemed, because she got caught.

THE PR VERDICT: “F” (Full Fiasco) for Paula Deen and her PR team.

THE PR TAKEAWAY: Damage control shouldn’t cause more damage. Only last year, Deen’s credibility took a hit when she revealed her previously hidden diagnosis of Type 2 diabetes, often caused by the kind of cooking Deen’s multi-million dollar empire is built on. With her credibility already stretched, this was the time to let cooler heads prevail. How about proper coaching prior to the deposition that would have stressed bewilderment about why this issue has surfaced? While in legal matters, the truth must be told, in this case it might have sweetened with contrition, best served simply and without qualification.

To watch the Paula Deen apology videos, click here and here.