Why do tech companies hate their customers all of a sudden?
It's a question worth asking after a wild week for two of the most valuable and important internet businesses. Netflix, already in the doghouse after announcing a price hike back in July, only made things worse by announcing its DVD rental business would be severed from its streaming video offering and shoved into a new company with a terrible name, Qwikster. Then Facebook rolled out critical changes to the social network's interface before users had a chance to get used to the last round.
Netflix disc
At first blush, these moves don't seem to have a lot in common, but look deeper and you'll see that what unites them is a tin ear for what their consumers want. Netflix subscribers don't want higher prices for essentially the same service, and they certainly don't want any complications, real or imagined, from having to deal with a separate company. They also didn't want an apologetic and misguided letter from CEO Reed Hastings that communicated the business strategy behind the move without explaining the consumer benefit. (Possibly because there isn't any.)
What Facebook users don't want is constant flux on a platform that's become an important habit for many. What they want, more than anything else, is stasis-an end to or, at least, a slowing of the fast-running stream of tweaks and overhauls that forces them to study up on how their personal information is shared and spend hours tweaking their profiles so they can avoid having their own, private social-media crisis.
These are obviously massive generalizations, but it's not hard to miss the annoyance targeted at the companies. As New Yorker writer Susan Orlean tweeted to her 185,000 followers, "I think the people running Facebook and Netflix went to a how-to-irritate-your-customers seminar together."
Each company had reasons to know they were courting backlash. Netflix already saw the negative reaction to its announced price hikes, enough of a misstep that a lot of subscribers initially assumed that Mr. Hastings' letter was going to be a rollback of the price increases. Instead it ended up being a tactical misstep that only helped to erode what's left of goodwill for the company.
Meanwhile, Facebook itself is an always-on referendum on a lot of things, including Facebook, and there's an intense amount of whinging that comes with each new version. It's easy to dismiss this when your user base and valuation continues to grow no matter what you do, but that continued growth is by no means guaranteed, especially when you introduce changes like this recent one that, on a foundational level, alters what Facebook is. Its new Timeline feature will transform your profile from a momentary snapshot of what you're doing to something more like a digital biography, possibly making old news-photos of your kegstands, ex-girlfriends-new again. The risk to Facebook, as it constantly dances around privacy issues, is that it will cause consumers more problems than it's worth. Why change a good thing? Facebook, we're told, needs to constantly innovate in order to avoid the fates of dead and near-dead social networks like Friendster and MySpace. But that translates it into an if-we-build-it-they-will-come(-or-stay) attitude that often comes off as arrogant.
Underlying all this is a disregard for listening to customers that we see all too often from tech companies and, to no small degree, we can blame Apple for it. Steve Jobs, famously distrustful of market research, instilled in his company a product design-led ethos validated by a decade of nothing but hits. Facebook feels a lot like Apple in this regard, led by engineering and a cultural insight that people want to share more and that should be enabled at all cost.
They both barrel forth as fast as their innovation cycles will carry them. The difference, of course, is that I can choose not to buy a new Apple product while still remaining a loyal customer and part of their ecosystem.
With Facebook, there's more of a feeling that you're all in, whether you want to be or not.
Netflix, on the other hand, is rather easy to opt out of altogether. You could simply turn to Amazon or Walmart or Redbox or even Blockbuster, now set to launch its own streaming service. Or you can ask yourself whether you really need a monthly bill for a limited selection of on-demand videos and maybe even save yourself a few bucks. In any event Netflix is sure to feel the pain. Videonuze estimates that about 6.5 million customers will leave Netflix this quarter, a record amount of churn for the company.
And while it's a long shot, now that Google+ is on the block, Facebook might find that its own disgruntled users, those who've wailed about leaving the service during previous redesigns, may finally have a place to run to.
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