Netflix Rules, Blockbuster Drools And The Persona Of Companies

Written on April 10, 2009 by Marc Eastman in Newsish

To say that I haven’t been a Netflix member since the very beginning would be splitting hairs really. There were people who were getting their discs through the mail before I even heard of Netflix I suppose, but Netflix and I sit around the bar laughing on slow nights, and neither one of us can remember exactly how long its been. They’re an easygoing sort of company, and just feel more comfortable in their Dockers than a suit, and once in a while they’ll throw things out like, “Remember when you had Adventures in Babysitting out for like three months? What the hell was that?” I’ll smirk and take a sip of scotch and say, “Remember those commercials with all the ‘movie’ characters that show up at your house? Those were frickin lame… Donkey.”

You just cruise along in your relationship, and Netflix just hangs out there with you like an old buddy. Occasionally you chat. You say, “I liked this movie,” and Netflix says, “Oh, if you liked that movie I bet you would like this movie, would you like to get it?” Then you say, “Are you nuts? I would hate that movie. Dumbass.” Then Netflix says, “Errr… I meant this movie… ummmm… ::blink:: ?” And you say, “Yeah, I saw that already too… forgot to tell you.” And, every once in a while, they will check in with you and say, “Hey, uhh, when did you send Quantum of Solace? We want to make sure things are running smoothly.”

From the first days, years ago, I’ve always loved Netflix, and largely because I am one of their chief demographics… late fee monsters. I remember telling people about it and getting blank stares, and a lot of, “You do what now”s. I’ve had a lot of dealings with Netflix, and I mean dealings that cover just about every experience. I’ve shut it off when I moved, “vacationed” it, upgraded, downgraded, lost discs, received scratched, unplayable, and broken discs, and everything else you can imagine. Through it all, whether it was years ago or weeks ago, Netflix has always given me the impression of being nothing so much as just plain friendly. They’re like a little Mom & Pop store who act almost surprised to get a customer, and therefore try their best to keep their customers happy.

Blockbuster, on the other hand, are a pack of bastards.

I’ve consumed at the Big Blue Sign since the earliest days as well, and they have always been stuffy snobs in suits smoking cigars. Their stores oozed corporate BS, and their idea of how to treat customers was to call two-day rentals three-day rentals.

More interesting than just my feel for these companies’ customer relations personas, is my feel for what you might call their brand identity persona. I remember way back, further back than you’d think, hearing Netflix talking about what they were going to do next. Next? It was so far back that the idea threw me. You’re a company that sends DVDs through the mail… what next? But, they were thinking about it, and trying to come up with answers. Now you can stream movies through Tivo devices, XBOX 360s, and many other devices, including certain TVs, which adds serious value to your subscription and without costing extra. Imagine giving your customers something that theoretically delivers two, three, or more times the value, without charging them more than they’ve been paying already. As great as that is, the persona Netflix has created gives me the impression (for no real reason other than it fits that persona) that they’re already coming up with three Nexts down the road.

Meanwhile, Blockbuster sat on their greatness and let things fly by. Sure, they eventually got in the mail game, and they recently have worked out streaming, but it was all too little too late, and/or completely half-hearted. Their marketing strategy is… What marketing strategy? We’re Blockbuster!

And… some days the news is just really cool.

Netflix had a great year. Revenue is up. Profits are up. It closed April 7th at $43.70 a share. Up and up. Nevertheless, the executive officers at Netflix are not getting raises. The CEO is getting $2 million, including $1 million in stock options. Moreover, Netflix does not offer any performance bonuses. They expect executives to perform at a level that would warrant bonuses and pay them accordingly. What the hell kind of Corporate America idea is that?

Meanwhile, Blockbuster is sinking fast, and everyone knows it. The Wall Street Journal reported that the PricewaterhouseCoopers LLP audit of the company revealed a financial situation that raises “substantial doubt about the Company’s ability to continue as a going concern”. This comes after rumors flew that Blockbuster was going under, and numerous reports of trying times for the company. How did Blockbuster executives fare in this climate of downward spiral? The CEO got a 49% raise to $8.4 million a year.

Now, there may be a lot of ways Blockbuster can dig itself out of the hole its in. It has apparently tried revamping its stores, with a test run in Las Vegas. They have gotten into the streaming market, though it may be too late. They’ve also made cuts to advertising spending, and have tried to reduce costs in other ways. On paper, the business may look like it can turn around. Some business class somewhere may put forward a very legitimate assignment when it has its students come up with ways to turn these example numbers around. But, there’s no fix for a company persona that lights its cigar while kicking its customer in the teeth.

Home Media Magazine has an article covering Netflix and Blockbuster Executive pay here.