You know, I actually defended Netflix when it originally announced its price increase. Admittedly, part of the reason was that I have an emotional attachment to physical media, and although I recognized that separating the pricing was a move toward discouraging the DVDs by mail service, I determined that it wouldn’t harm that side of the business artificially. I figured that people with the money would hang onto both services and demonstrate the continued relevance of both media that you can hold in your hand and the United States Post Office. I also supposed that certain people like me would cast a vote in favor of those things by keeping only that service. I think Netflix discovered, to their evident chagrin, that I was right.
And in a move that will become a prominent case study in future business textbooks, the solution that they decided upon in response to unexpectedly negative customer feedback was to issue an arrogant non-apology while pushing the original idea to a further and more alienating extreme. Instead of simply retaining two price structures for different services and letting customers demonstrate their demand within the existing business model, Netflix will now be separating the two services into two completely separate businesses, with separate billings, separate websites, separate ratings information, even separate brand names, and ultimately completely separate customers.
In a replay of the July chorus, the response from customers and persons with common sense about how a business should operate has been overwhelmingly derisive. The perfectly obvious complaint is that the company is making it impossibly difficult for customers to utilize the dual service that they have already had access to. The Oatmeal quickly responded with this cartoon: http://theoatmeal.com/comics/netflix. One of the thousands of commenters on the Netflix blog post compared this move to separating phone service into a company devoted to talking and one devoted to listening. References to New Coke abound. People are predicting still more declines in the stock value of the company.
In his post, Netflix CEO Reed Hastings explained, no doubt disingenuously, that the complete severance of the DVDs by mail portion of the business is aimed at allowing management teams for each business to focus completely on their own needs, thereby helping the DVD portion to survive for longer. Now, I have no formal education in business management, but I’m pretty sure that it’s possible for a company and a subsidiary company to be managed separately, but share billings and retain user interface that is already well in place. Even if the creation of a separate site was deemed necessary for clarity’s sake or simply for the sake of a symbolic fresh start, I find it impossible to believe that Netflix couldn't have designed two separate sites that share ratings and reviews from customers who have accounts with both.
I call absolute bullshit on Hastings’ claim that he wants the DVDs by mail service to be around for as long as possible. Completely and unnecessarily divorcing the two services forces customers to choose one or the other. They are trying to deliberately, perhaps artificially, reduce demand for the portion of their business model that involves an investment of physical resources. And if that fact isn’t evident simply from the effort to sequester the older service away from the newer, they’ve even given it an awful, awful new name. The red envelope will now bear the name “Qwikster,” a name which I can only imagine was artfully designed to imply obsolescence.
The new brand remains true to the original by having two syllables and in no other way. Those two syllables combine two assaults on the durability and desirability of the business into one absurdly shitty name. To start with the more obvious act of sabotage, I would say that Netflix’s marketing department attached the suffix “-ster” to the new brand explicitly to place it in the company of businesses that are already defunct and to make it feel at home there. “-ster” was commonly attached to web business names about a decade ago, and has never been used with anything new that had a shot at being successful since then. Napster and Friendster still exist, as far as I know, but nobody cares, nobody really uses them, and the prospects for them growing in the future are slim to nil. By making the older half of their business of a piece with these oldsters, Netflix is transparently broadcasting the fact that it perceives Qwikster to already be in the same position of neglect, or that they want it to be.
More likely the latter given the other half of the brand. “Qwik,” Mr. Hastings helpfully informs us, is supposed to refer to the quick delivery offered to customers. So in order to promote the longevity of their premier service, they’ve chosen to emphasize the one feature by which it pales in comparison to the company’s other brand, which is now being put forth as a competitor. I’ll say a lot in praise of the DVDs by mail service, but by modern standards, quick it is not. The Netflix marketing team seems to be banking on the idea that every time they read the name on that little red envelope, the word “quick” will be on their minds and they’ll think, “Gee, I wouldn’t have had to wait a day for my entertainment if I had just chosen another title that’s available to stream online and watched that instead.”
Despite the strengths that they could have emphasized, they instead chose to create a new brand identity based on the one modest weakness that will repel all the shortsighted customers who can be trained to value convenience over quality. They could have called it PickFlix, or ClearFlix, or Doesn’t-rebuffer-or-increase-strain-on-your-ISP-Flix. Or they could have just called it Netflix Mail. But they went with Qwikster. They may as well have just called it Waitster and made the logo a cartoon of a guy looking at his watch while getting older. This goes beyond bad branding. It was never intended to be good branding. Reed Hastings wasn’t caught off guard by the blowback he received today; he was counting on it. As far as I can tell, his attitude is that anyone who still wants his company to mail them any of their 100,000 DVD titles can fuck right off. Go check some other dead and decaying websites, then put on a big band LP and type a letter to the editor on your Smith-Corona, you dinosaurs. Reed Hastings is too plugged in to the rapid changes of the modern market to stop and give a shit about whether you still want what he was offering you back when his company’s stock was more valuable and you were paying less.
I suppose that given the theme of this blog, I should give Hastings my respect. He’s trying to force a breaking point. But it’s a decidedly negative breaking point for most people concerned. If we accept the shitty deal he’s giving to his loyal customers, we demonstrate that decreased quality and selection is okay as long as we get our poor, limited goods quickly. On the other hand, we could spin this breaking point in our favor. I’ll be curious to see how many more subscribers they’ve lost after another month. I’m not sure how I’m going to respond yet. Netflix has been my only reliable source of entertainment for some time. The price hike hasn’t taken effect for me yet. I was planning on just keeping the DVD side, but now I’m not sure whether to support Qwikster despite the fact that it’s designed to dissuade support and is owned by someone who’s happy to treat his customers like gullible fools, or to try to find something else.
I actually didn’t know that Blockbuster had changed to a monthly subscription model. When did that happen and why wasn’t it four years ago? There’s also apparently something called Green Cine, which doesn’t have much of a site but seems well-priced and is uniquely focused on independent and classic titles. There might also still be one privately owned DVD rental store in my area. That could be neat in light of my nostalgia for physical media. I don’t think I’ve gone inside a building to rent a film since I was a kid.
Showing posts with label USPS. Show all posts
Showing posts with label USPS. Show all posts
Monday, September 19, 2011
Thursday, September 8, 2011
Claire McCaskill: Naive, Pollyannish, and Correct
On Wednesday’s episode of the Daily Show, Jon Stewart ridiculed Senator Claire McCaskill for her comments in a hearing on the financial future of the United States Post Office. She recounted sending letters from college to her family, and lamented the fact that there are no such physical keepsakes arriving at her home from her college-aged children today. She then mused that an advertising campaign promoting the value of physical letters might have a positive impact on the USPS’s revenue stream.
Mere moments after I watched the Daily Show segment on Hulu, I read a post at Jack Marshall’s blog, Ethics Alarms, in which he thoroughly upbraided McCaskill for the same commentary. He concluded his post by saying that her remarks constituted a “level of demonstrated incompetence and stupidity that mandates removal from high office.”
I dare say it’s a little extreme to advocate that someone be removed from office based on having simply expressed an off-the-cuff idea, and one which McCaskill prefaced by acknowledging that it may seem “naïve” and “pollyannish.” Now, of it was foolish of McCaskill to bring it up in that context, and to apparently be just spit-balling ideas during an official government hearing. Giving her the benefit of the doubt, though, as far as I know, that’s just the way these things go. There may often be an informal tone in these sorts of hearings, which encourages a free exchange of thoughts. And appropriate or not, that is exactly what McCaskill was engaged in. That is not demonstrated incompetence. She didn’t actively structure a policy around her reflections. She didn’t do anything except share an idea that some people took very seriously and saw as a decidedly bad idea.
I actually disagree with them. I don’t think it’s all that bad an idea. Now, if she thought that effective advertising would completely turn around the Post Office’s revenue problems and that they would all then be able to go on with business as usual, her naiveté is quite incredible. There’s no reason to assume that, though. I see no reason to assume that she meant anything other than that it might help a little, which I think is true.
Jack Marshall’s derision of the idea almost comes across as a tirade against letter-writing, and both he and Jon Stewart seem to be of the opinion that traditional mail is dead, that nothing will revive it, and that technology moves inexorably from one item to the next, leaving the past buried in its wake. That perception is disputed at least in a modest sense by a study that was detailed on NPR some months ago, in which the author claimed that nothing that had ever been produced in the past has since stopped being produced altogether. Of course, that’s far from saying that any older technologies or practices remain commonplace, or rebound, but in my observation some do.
Marshall writes:
I found that passage amusing to read, considering that I am twenty-six years old and I own two typewriters and a record player, both of which I use. The record player is a Crosley model that was manufactured in recent years. I do as a matter of fact like the clack-clack-clack-ding of typewriters. As a writer, I find that it reassures me of my progress and helps me to establish a rhythm. I also appreciate the concept of having a physical concept of my work without having to go through the further process of printing it out. That is essentially the same reason why I prefer personal correspondence in the form of handwritten letters, rather than e-mail. I know for a fact that I am not the only one in my age bracket who feels this way. When I was in college, e-mail was already quite dominant, but I had several friends with whom I exchanged letters, because we thought it preferable to have a space of time between correspondences, and to be able to open physical envelopes, which imbued the messages with greater significance.
Marshall seems to not realize, or to ignore the fact that some of the technologies he refers to as obsolete and inferior have remained current even in the presence of domination from their competitors. I was able to buy a new record player a few years ago because they are still marketed to some segments of the population. Naturally, some of these are seniors with disposable retirement income, who still have vinyl records from their earlier years and would like to hold onto them, and perhaps convert them to mp3 and CD formats. However, newly pressed vinyl has seen a significant resurgence in recent years, because advertising and word-of-mouth has informed people that it actually provides a better sound quality than the alternatives. It is a niche market, but audiophiles and music snobs are now willing to spend more on a high-quality vinyl record than a CD. For my part, I am happy to purchase used records for one dollar at the local thrift store because as long as they are well-preserved, the overall sound quality remains superior, and I also like the hands-on aspect of it, the fact that the need to turn over the record at the halfway point encourages you to remain engaged with the music, and to listen actively.
I have noticed the same sort of resurgence with typewriters, which I began to see being sold new in office supply stores starting a couple of years ago. I expect the reason is that people have realized – or manufacturers have realized they can try to convince people – that they are preferable in some professional contexts for fundamentally the same reason that I prefer them when writing fiction. That is, they provide an immediate physical copy, a fact that probably benefits businesses when they would rather not waste time by scanning, modifying, and printing existing forms and documents.
So why not actually promote the USPS as a means of personal communication? It’s not unheard of. The Swedish post office embarked on a creative ad campaign in the Christmas 2009 season, and from what little I know it was rather effective. It seems to me that the mistake that the government and the Post Office has been consistently making is that they have been going about business as usual, failing to make necessary structural changes to their operations in order to reduce costs, and also failing to implement any strategies in order to increase revenue. Both are necessary to save the institution, and despite what Jon Stewart or Jack Marshall would have us believe, it’s not all that ridiculous to think that people can be guided towards choosing something in spite of its not being on the cutting edge.
To my mind, this entire subject speaks to something deeper about modern American perceptions of marketing. That is, we seem not to have any such perception. In the context of constant information and ongoing consumer profiling, people who are in the business of selling things to other people have gotten so caught up in the “people” and “things” elements of that equation that they’ve utterly forgetting about the “selling” part.
In season four of Mad Men, there is a scene in which Don Draper clashes with an expert brought in to do market research on how to sell skin cream to women. Her interviews find support the notion that the traditional angle is the only angle: convince them that using it will help them to get married. Draper had been pushing for another interpretation, no doubt guided in part by his own resistance to the confining set of options offered by society, and the woman insists that there doesn’t seem to be a new approach to be had. Draper stands his ground by saying that of course no such approach would come out in the market research. Neither the product manufacturer nor the potential customers would know what they’re looking for until someone tells them. That’s what makes it new.
Was marketing really like that once upon a time? Is there any creative appeal left in marketing now? All the sales of products seem to be obtained through algorithms which pick out the sort of people whose consumption patterns demonstrate a proclivity for consuming those products. We seem to feel that all we need to do is isolate the people who want something, and then tell them to obtain it. But good advertising is capable of targeting people who don’t yet want something and convincing them that they do. Great marketing can convince them that they want it even though it’s different from what they’ve gotten accustomed to, even though it seems, at first blush, to be inferior, even though it’s old. But that idea is apparently so passé that Jon Stewart and Jack Marshall find it to be laughably indefensible.
Mere moments after I watched the Daily Show segment on Hulu, I read a post at Jack Marshall’s blog, Ethics Alarms, in which he thoroughly upbraided McCaskill for the same commentary. He concluded his post by saying that her remarks constituted a “level of demonstrated incompetence and stupidity that mandates removal from high office.”
I dare say it’s a little extreme to advocate that someone be removed from office based on having simply expressed an off-the-cuff idea, and one which McCaskill prefaced by acknowledging that it may seem “naïve” and “pollyannish.” Now, of it was foolish of McCaskill to bring it up in that context, and to apparently be just spit-balling ideas during an official government hearing. Giving her the benefit of the doubt, though, as far as I know, that’s just the way these things go. There may often be an informal tone in these sorts of hearings, which encourages a free exchange of thoughts. And appropriate or not, that is exactly what McCaskill was engaged in. That is not demonstrated incompetence. She didn’t actively structure a policy around her reflections. She didn’t do anything except share an idea that some people took very seriously and saw as a decidedly bad idea.
I actually disagree with them. I don’t think it’s all that bad an idea. Now, if she thought that effective advertising would completely turn around the Post Office’s revenue problems and that they would all then be able to go on with business as usual, her naiveté is quite incredible. There’s no reason to assume that, though. I see no reason to assume that she meant anything other than that it might help a little, which I think is true.
Jack Marshall’s derision of the idea almost comes across as a tirade against letter-writing, and both he and Jon Stewart seem to be of the opinion that traditional mail is dead, that nothing will revive it, and that technology moves inexorably from one item to the next, leaving the past buried in its wake. That perception is disputed at least in a modest sense by a study that was detailed on NPR some months ago, in which the author claimed that nothing that had ever been produced in the past has since stopped being produced altogether. Of course, that’s far from saying that any older technologies or practices remain commonplace, or rebound, but in my observation some do.
Marshall writes:
"If the Senator’s idea works, maybe we can use the same approach to bring back the use of other obsolete and inferior technologies. Like…typewriters! Didn’t you love that ‘clack-clack-clack-ding!‘ sound? Phonographs! And telegrams! Ah, there was such a thrill when you got one of those!"
I found that passage amusing to read, considering that I am twenty-six years old and I own two typewriters and a record player, both of which I use. The record player is a Crosley model that was manufactured in recent years. I do as a matter of fact like the clack-clack-clack-ding of typewriters. As a writer, I find that it reassures me of my progress and helps me to establish a rhythm. I also appreciate the concept of having a physical concept of my work without having to go through the further process of printing it out. That is essentially the same reason why I prefer personal correspondence in the form of handwritten letters, rather than e-mail. I know for a fact that I am not the only one in my age bracket who feels this way. When I was in college, e-mail was already quite dominant, but I had several friends with whom I exchanged letters, because we thought it preferable to have a space of time between correspondences, and to be able to open physical envelopes, which imbued the messages with greater significance.
Marshall seems to not realize, or to ignore the fact that some of the technologies he refers to as obsolete and inferior have remained current even in the presence of domination from their competitors. I was able to buy a new record player a few years ago because they are still marketed to some segments of the population. Naturally, some of these are seniors with disposable retirement income, who still have vinyl records from their earlier years and would like to hold onto them, and perhaps convert them to mp3 and CD formats. However, newly pressed vinyl has seen a significant resurgence in recent years, because advertising and word-of-mouth has informed people that it actually provides a better sound quality than the alternatives. It is a niche market, but audiophiles and music snobs are now willing to spend more on a high-quality vinyl record than a CD. For my part, I am happy to purchase used records for one dollar at the local thrift store because as long as they are well-preserved, the overall sound quality remains superior, and I also like the hands-on aspect of it, the fact that the need to turn over the record at the halfway point encourages you to remain engaged with the music, and to listen actively.
I have noticed the same sort of resurgence with typewriters, which I began to see being sold new in office supply stores starting a couple of years ago. I expect the reason is that people have realized – or manufacturers have realized they can try to convince people – that they are preferable in some professional contexts for fundamentally the same reason that I prefer them when writing fiction. That is, they provide an immediate physical copy, a fact that probably benefits businesses when they would rather not waste time by scanning, modifying, and printing existing forms and documents.
So why not actually promote the USPS as a means of personal communication? It’s not unheard of. The Swedish post office embarked on a creative ad campaign in the Christmas 2009 season, and from what little I know it was rather effective. It seems to me that the mistake that the government and the Post Office has been consistently making is that they have been going about business as usual, failing to make necessary structural changes to their operations in order to reduce costs, and also failing to implement any strategies in order to increase revenue. Both are necessary to save the institution, and despite what Jon Stewart or Jack Marshall would have us believe, it’s not all that ridiculous to think that people can be guided towards choosing something in spite of its not being on the cutting edge.
To my mind, this entire subject speaks to something deeper about modern American perceptions of marketing. That is, we seem not to have any such perception. In the context of constant information and ongoing consumer profiling, people who are in the business of selling things to other people have gotten so caught up in the “people” and “things” elements of that equation that they’ve utterly forgetting about the “selling” part.
In season four of Mad Men, there is a scene in which Don Draper clashes with an expert brought in to do market research on how to sell skin cream to women. Her interviews find support the notion that the traditional angle is the only angle: convince them that using it will help them to get married. Draper had been pushing for another interpretation, no doubt guided in part by his own resistance to the confining set of options offered by society, and the woman insists that there doesn’t seem to be a new approach to be had. Draper stands his ground by saying that of course no such approach would come out in the market research. Neither the product manufacturer nor the potential customers would know what they’re looking for until someone tells them. That’s what makes it new.
Was marketing really like that once upon a time? Is there any creative appeal left in marketing now? All the sales of products seem to be obtained through algorithms which pick out the sort of people whose consumption patterns demonstrate a proclivity for consuming those products. We seem to feel that all we need to do is isolate the people who want something, and then tell them to obtain it. But good advertising is capable of targeting people who don’t yet want something and convincing them that they do. Great marketing can convince them that they want it even though it’s different from what they’ve gotten accustomed to, even though it seems, at first blush, to be inferior, even though it’s old. But that idea is apparently so passé that Jon Stewart and Jack Marshall find it to be laughably indefensible.
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