COMPETITOR DAMAGE ANALYSIS REPORT
As Netflix announced earlier this year, its price hike in service took effect September 1st. After contract negotiations collapsed between Netflix and Starz-a significant source of premium streaming movie selections- on September 2nd the cable network announced it would be pulling its content from the service in February. And when Netflix customers tried streaming two movies simultaneously on September 8th, they encountered an error message indicating they “should stop playing at least one movie and try again later.” How have these three events impacted Netflix brand equity? What can online social media tell us about Netflix customers? Do these social media soundings suggest the need for damage control? This summer, Netflix social share of buzz for movie selection and cord-cutting doubled, while share of cost buzz skyrocketed 14-fold, as seen in the chart below.
Netflix Share of Buzz by Topic vs. Prior Quarter Earlier this year with the perceived threat that Netflix might precipitate “cord cutting,” it seemed cable companies were hoisting the red flag. In a seeming reversal of fate, today it seems Netflix is doing so. The Netbase Scorecard we’ve tracked since June shows a continuing shift in online customer sentiment, with a growing vocal proclivity toward jettisoning the service. A strong sense of betrayal of customer loyalty also is apparent among some early adopters who saw the brand as having an equalizing effect on high monolithic cable rates. In July Netflix deployed streaming in Canada, and this week it launched its service throughout Latin America and the Caribbean. One would assume that this global expansion springs from a solid domestic foundation. However, during the past 12 months, our social media tracking shows the trend line in brand net sentiment has been zigzagging, yet with few exceptions (e.g. its July 11th price hike announcement) still remains in positive territory. Significantly, although not...
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