We Fear Change, Part 2: Netflix’s Interpretive Approach

I consider my well versed at making apologies. If there is anything that I have learned by apologizing, it doesn’t involve changing my name and creating a new identity for myself. Well maybe that’s not such bad idea after all.

Last week when I received an email from Reed Hastings, co-founder and CEO of Netflix, I treated it like one of the several hundred emails I get from Paul each day. I scanned it just closely enough to talk to him intelligently about it with him so when he calls five minutes after sending it, I can pretend like I really care. As a Netflix customer, I think that Reed’s email may have been misunderstood. It is my hope through this blog post that I can translate or read between the lines to help you understand the recent changes.

I try not to be one of those people (Paul Caputo) who fear change. The part that really bothered me about the change was the approach. Reed’s letter takes interpretive writing principles and uses them in an evil way. We all know that Jedi Mind Tricks are for the weak minded, so I wasn’t fooled by his red envelopes. Reed didn’t read the postscript in Freeman Tilden’s Interpreting Our Heritage where he unveiled his 7th principle of interpretation: “Remember, a Jedi’s strength flows from the Force. But beware. Anger, fear, aggression. The dark side are they. Once you start down the dark path, forever will it dominate your destiny.” Where he said Jedi, I’m pretty sure that was a typo that should have been interpreter. Who am I to question genius, though?

Here’s the letter and my comments are in parentheses (of course).

Dear Schafer, (Yes, my real name is Schafer. Insert your own jokes in the comments section.)

I messed up. I owe you an explanation. (Nice start, Roger Clemens should have taken this approach. Honesty goes a long way with readers, visitors, and baseball fans.)

It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming and the price changes. That was certainly not our intent, and I offer my sincere apology. Let me explain what we are doing. (Building a relationship by saying “I have heard from you and I’m sorry.”)

For the past five years, my greatest fear (Anger, fear, aggression…okay we know what Yoda has to say about that, and I agree.) at Netflix has been that we wouldn’t make the leap from success in DVDs to success in streaming. Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great that new things people want. So we moved quickly into streaming, but I should have personally given you a full explanation of why we are splitting the services and thereby increasing prices. It wouldn’t have changed the price increase, but it would have been the right thing to do. (Is he really just angry at the U.S. Postal Service or simply taking out aggression that DVDs are almost a thing of the past and they aren’t bringing in the cash they used to? The take home message here is: Daddy’s gonna get paid.)

So here is what we are doing and why. (Reed is setting the stage for meeting his objectives though this letter.)

Many members love our DVD service, as I do, because nearly every movie ever made is published on DVD. DVD is a great option for those who want the huge and comprehensive selection of movies. (Trying to relate.)

I also love our streaming service because it is integrated into my TV, and I can watch anytime I want. The benefits of our streaming service are really quite different from the benefits of DVD by mail. We need to focus on rapid improvement as streaming technology and the market evolves, without maintaining compatibility with our DVD by mail service. (He wants to play for the Yankees and the Red Sox. Though I’m sure in the future the collapse of the 2011 Red Sox and Netflix will be used one in the same when describing failure.)

So we realized that streaming and DVD by mail are really becoming two different businesses, with very different cost structures, that need to be marketed differently, and we need to let each grow and operate independently. (See take home message above. Revelation coming now, please continue reading.)

It’s hard to write this after over 10 years of mailing DVDs with pride, but we think it is necessary: In a few weeks, we will rename our DVD by mail service to “Qwikster”. We chose the name Qwikster because it refers to quick delivery. We will keep the name “Netflix” for streaming. (Okay, I’m lost. Wait, I see. Let’s take away any loyalty you have to “Netflix” DVDs because it is easier to kill something you don’t care about then you will come crawling to “Netflix” streaming video, your old red friend.)

Qwikster will be the same website and DVD service that everyone is used to. It is just a new name, and DVD members will go to qwikster.com to access their DVD queues and choose movies. One improvement we will make at launch is to add a video games upgrade option, similar to our upgrade option for Blu-ray, for those who want to rent Wii, PS3 and Xbox 360 games. Members have been asking for video games for many years, but now that DVD by mail has its own team, we are finally getting it done. Other improvements will follow. A negative of the renaming and separation is that the Qwikster.com and Netflix.com websites will not be integrated. (Was he serious about the name Qwikster? I’m pretty sure that handle on Twitter is taken by my brother-in-law.)

There are no pricing changes (we’re done with that!). If you subscribe to both services you will have two entries on your credit card statement, one for Qwikster and one for Netflix. The total will be the same as your current charges. We will let you know in a few weeks when the Qwikster.com website is up and ready.

For me the Netflix red envelope has always been a source of joy. The new envelope is still that lovely red, but now it will have a Qwikster logo. I know that logo will grow on me over time, but still, it is hard. I imagine it will be similar for many of you. (He’s right, we love those red envelopes. I’ve even heard Paul say “My marriage depends on those red envelopes!” I’m pretty sure Paul’s wife has him enduring some sort of post-baseball television sensitivity training that involves the movies Steel Magnolias, Beaches, and Fried Green Tomatoes. Don’t mind trick us here, we know they won’t be Netflix DVDs because of the new complementary color palette.)

I want to acknowledge and thank you for sticking with us, and to apologize again to those members, both current and former, who felt we treated them thoughtlessly. (Uh, we are not the stickees but the ones being stuck. If he is trying to provoke here, he was successful)

Both the Qwikster and Netflix teams will work hard to regain your trust. We know it will not be overnight. Actions speak louder than words. But words help people to understand actions. (This taken from the New York Times bestselling Book of Bad Coaching Cliches in the chapter titled When You Care Enough to Say the Very Least.)

Respectfully yours (Stick it in your ear),

-Reed Hastings, Co-Founder and CEO, Netflix

p.s. I have a slightly longer explanation along with a video posted on our blog, where you can also post comments. (Doesn’t he know that no one reads blogs anymore? What an idiot.)

Okay so this was more of a rant than a blog post, I’m sorry. I just needed to get this off of my chest. Lessons: realize your patrons are smarter than you, focus on what you are good at, be honest, and don’t use tested interpretive writing techniques for evil.

We Fear Change, Part 1: Facebook

We live in turbulent times. REM stopped making music, major college athletic programs change conferences almost daily, and Leonard and Penny split up after more than half a season together (I’m watching Big Bang Theory on Netflix Qwikster, so I’m a little behind the times). With all of this change, it’s a little unsettling when you reach for one of your comfort blankets at the end of a long day only to find that Mark Zuckerberg has knitted it into a completely unfamiliar pattern.

Welcome to what we’re calling Garth Algar “We Fear Change” Week here on IBD. I will discuss Facebook today, and Shea will address Netflix Thursday. Some day down the road, when we’re all emotionally prepared for it, we’ll write about the new logo for the Florida Miami Marlins baseball team.

In the 1992 movie Wayne’s World, the hateful Benjamin Kane (played by Rob Lowe) comes to Garth (Dana Carvey) with the insidious notion of giving arcade tycoon Noah Vanderhoff (Brian Doyle-Murray) a regular interview segment on Wayne and Garth’s cable-access TV show. Garth responds with a simple “We fear change” and starts smashing the robotic hand he’s building with a hammer.

Those of you who use Facebook may have noticed that there have been some changes recently to the design and functionality of the popular social media site. Those of you who don’t use Facebook, this is why two-thirds of the people you know recently spent the better part of a week screaming as though someone (Mark Zuckerberg) had stabbed a fork through their hands.

To say that the reaction to Facebook’s redesign has been negative is a little like saying some people didn’t like the movie Cabin Boy. (Note: One of my favorites.) As with all of Facebook’s previous changes, this one was met with tears, confusion, and threats to cancel accounts (and that was just one guy).

The difference now is that there’s another option. Google+ is gaining momentum and is seen by many as an alternative to Facebook, if only they could get their friends to come along. The irony is that many of Facebook’s changes (increased interactivity, larger images, tweaks to the “list” feature) are in response to the emergence of Google+.

And this is the crux of the issue: Facebook is in the unenviable position of needing to stay current, respond to competitors, and adapt to emerging technology, all while keeping the Garth Algars of the world from freaking out.

The day the changes were unveiled, there was a collective uproar on the site. When I posted on my Facebook page that I didn’t mind the changes (I actually like the new scrolling, Twitter-esque news feed), it garnered a pile of comments, some of them unnecessarily personal. (I will say that I don’t support the changes wholesale; Facebook needs to address the fact that some of the new features have upended privacy settings by allowing friends of friends to see items only meant for a select few.)

The thing is, this all felt familiar to me. I was searching for reactions to the new look on Google and found articles going back years where irate Facebookers were screaming that they wanted the old site back. Every time the site has been updated, features have been added, users resisted, then got used to them and even came to enjoy and rely on them. (In 2006, Facebookers were unhappy with this gimmicky new thing called a “news feed”—now a staple of the Facebook experience.)

Facebook is an optional leisure activity, like watching baseball or visiting interpretive sites. People don’t want to feel confused and annoyed by something they choose to do in their spare time. Any change to a comfortable environment is going to be disruptive to some people.

Interpreters faced with the task of creating materials for visitors—especially repeat visitors—should be extra careful that changes to exhibits, publications, websites, and logos are not just for change’s sake, but for the improvement of a product. If you make drastic, unnecessary changes to a place where visitors come to learn and relax and enjoy some solitude, you may just find your self playing the role of that robotic hand in Wayne’s World.

If you make changes that are warranted and actually improve your product, people will get used to them, but you still may find yourself cursed out on a highway construction sign.