Netflix – Good Strategy, Bad Execution?

Read this interesting piece on cnet about Netflix’s problems last year, and their CEO Reed Hastings. The author blames, not in these exact words, Reed Hastings for everything that happened, and hints at hubris as the cause.

After reading the article twice, the only fault I can find with the initial decision (of separating DVD & Streaming subscriptions, and increasing prices), is in the way it was rolled out. The decision itself seems strategically perfect.

In fact, had they not so messed up with the execution of that strategy, that decision should’ve gotten Mr. Hastings a standing ovation for foresight and business acumen.

With the benefit of hindsight (and probably even without it), here’s how I think the strategy should’ve been executed:

  1. Limit the number of movies/shows available for streaming to about half of what the median user was streaming. Don’t mess with the price.
  2. Offer a separate unlimited streaming package for $7.99, as they did.
  3. Offer a separate unlimited DVD only package for $7.99, as they did.
  4. DO NOT offer an add-on unlimited streaming bundle to the 1st option for $4.99

This laddering of subscription options will slowly filter the customers into one of the three buckets. Moreover, the lack of the 4th option will help push more customers into choosing one of option 2 or 3, instead of staying with option 1.

Now, keep the new pricing for a year. End of the year, if a majority of the customers are still on #1, increase the price to, say, $14 while still keeping the cap. If not, retire the 1st option forcing the users to choose one of the other two.

Using this ladder & stagger manner,

  1. doesn’t make the users feel like they’re being sucker punched on pricing.
  2. lets the users filter themselves into one of the new buckets without feeling they’re under an ultimatum to do so.
  3. lets the market confirm your business strategy before you’ve made the final split.
  4. reduces the negative voices when you finally decide to remove option 1.

Unless there was some internal politics at play, or pressure from content providers (Hollywood studios or, maybe, Starz), there doesn’t seem to be a good reason for the abrupt, arrogant, even amateurish manner in which the strategy was executed.

Wonder if this could be cited as one of the few instances when having execution-oriented external business consultants at hand would’ve been helpful? :)

Continue reading Netflix – Good Strategy, Bad Execution?

Wither Windows?

The bias towards Apple in mobile apps is already well established with many developers bringing out apps just/first for iOS. Two recent launches might be an early indicator of how that shift towards Apple is taking place on the desktop as well:

  1. Lytro, the click-now-focus-later digital camera would only work with Mac at launch, Windows to be supported later.
  2. Bitcasa, the upcoming unlimited cloud storage service too works only with Mac right now, Windows & Linux support to come later.

This could just be a coincidence, but those responsible for Windows over at MS should take this pretty seriously. It isn’t that there haven’t been Mac-only developers in the past, but this time it’s different. Back then Mac was a niche platform used by heavy graphics users, apple-fans  and few others. Today, Mac is going mainstream, fast. Most developers and designers these days have Macs as their primary PC and their investors mostly work on Macbooks too. This creates an ecosystem, specially for startups, where most people involved work primarily on a Mac. So far, though most of the folks in this ecosystem use Macs, they still consider Windows support as a core for success on the desktop.

This is where these two launches could make a difference. The issue is that both Lytro and Bitcasa are relatively high-visibility product launches within the developer / startup community. If they do even moderately well with Mac-only launches, it sends out a signal to all the app developers out there that Mac-only/first works. Add that to the popularity of Mac as a platform within the community, and we are only a small step away from a flood of independent developers deserting, or delaying, support for Windows.

Folk at Microsoft will remember how support from 3rd party application developers was a big factor in Windows taking off initially. If they don’t act soon, they’ll see the same flood of 3rd party developers start to migrate to Apple, hurting MS much more than piracy or cloud computing has.

If I were responsible for Windows at MS today, I’d throw everything – money, influence, marketing support, etc – to get these and any other high-profile apps / devices to launch with Windows support, if not exclusively on Windows.
Continue reading Wither Windows?

End of summer

End of summer...
End of summer...

Flash Thought: TV network executives have a good reason to hate this late London summer, don’t they?

It’s their best advertising season with all the latest programming lined up, and yet we’re all ignoring the tellys and heading out to parks & pubs making most of the sunshine.

Having paid huge sums for syndicating new series and advertising them all over town, what would you do if you were faced with this delayed flourishing of summer:

  • Delay the seasons programming by a week or two?
  • Bait & wait, trying to grab an early hook for winter?

Apple advertises Samsung Tab

This is going to be launched on the market with the velocity of a fire hose and is going to just come in and take away iPad 2 sales so quickly that by the time we get to final hearing the full impact of the patent infringement will be to the detriment of Apple and to the benefit of Samsung.” – Apple’s Lawyers on the Galaxy Tab 10.1

If I were Samsung, I’d highlight those quotes in my product advertisements.

Might even finally offer Apple some royalty payments, for using the quote :)

Listen to them.

— This is a re-post of my original post on Google+ —

Earlier today I posted a note about the TED talk by Alexis Ohanian and how one big lesson from that talk was that brands & organisations need to ‘Lighten Up!’ to succeed in the social sphere.

Well, here’s another TED talk, this time by Amy Lockwood (is she on G+?). This one touches on the same topic but from a slightly different angle.

My key observation from this: how organisations fighting huge global problems sometimes take themselves so seriously that they lose sight of what users really want – they mistake their own goals with users needs.

Once again, it seems that the organisations need to lighten up, take a step back and listen to ‘them’. Them can be anyone – condom users in Congo, poor parents of school kids in India, parents of vaccine recipients in American south and even countries in the UN voting on Palestinian statehood.

It does not matter what you think you’re doing – It matters what the end users perceive you are doing. Listen to them and then tailor your efforts around their wants.

Continue reading Listen to them.