Netflix's branding stumbled when it tried to split its DVD-by-mail and streaming services into separate brands called Netflix and Qwikster in 2011. This resulted in 800,000 subscribers canceling and a 70% drop in Netflix's stock price due to the negative customer reaction. Netflix ultimately killed the Qwikster idea and apologized, working to regain customer trust through free trials and promotions. The incident taught Netflix the importance of listening to customers and maintaining a consistent brand experience.

1. NETFLIX BRANDING STUMBLES
Brand Management- Individual Assignment

2. REED HASTINGS
An entrepreneur and a philanthropist.
Works with geniuses (or genii if you
are a Grammar Nazi), and gives them
their space
Father of Netflix

3. ENTER NETFLIX
He’s American and 19 years old.
He has an innovative mind and provides Internet
TV network to the needy and destitute

4. He loves choice and hates TV commercials
Life Mantra – Watch what you want, when you want
(at affordable price)

5. THE SECRET TO HIS SUCCESS
Flawless service delivery + wicked skills to recommend awesome
movies/ TV series

6. HE TALKS WITH
EVERYONE (…TRIES TO)

7. MAJOR EVENTS IN NETFLIX’S LIFE
• Birth  August 29, 1997
• IPO  May 22, 2002
• Instant Streaming  2007
• Qwikster  2011 (We’ll get back on this xD )

8. THE RUSH OF TEENAGE
It was as if Netflix could do no
wrong

9. NETFLIX’S STRATEGY
• It was positioned as a national brand, even though it had
international reach
• The logo and website were kept the same, however no
consistent use of other brand elements
• Used affordable pricing and heavy use of content marketing.

10. WHAT LED TO THE BIRTH OF DUMPSTER
• MONEY!!
• Gross profit margins by mail
order and streaming rentals
was significant.
Qwik

11. SO WHAT DID OUR DEAR NETFLIX DO
• Charge separately for DVD by
mail and Online Streaming
• This decidedly meant
increased prices for
customers for 24 million
customers who wanted to use
both services (60% rise)
Source: WebProNews, google images

12. MURPHY’S LAW!! – NOT REALLY
• Facebook gets 60,000+ negative comments
• Market cap dropped by 70% and more than 800,000
subscribers unsubscribed

13. MISTAKES OF THE TEENAGE
• Netflix tried to explain,
said he must’ve been out
of his mind
• Says it was just a phase
and it was out of his
system. Literally.
• That was when Qwikster
came out

14. LETS TRY TO ELABORATE WHY QWIKSTER WAS A
STUPID LUDICROUS IDEA
• Users had to create new accounts at
different domain names
• Different credit card statements
• Different sets of ratings and preferences
• Unintentional typos everywhere (Quick, Qvik, Qwick…)
• They added video games as an OPTIONAL upgrade, not included in
the standard package
• The twitter handle for Qwikster was already handled by Jason Castillo (loved
marijuana, DP – pot smoking elmo)
THE LIST REALLY GOES ON…

15. SO WHAT SHOULD BE DONE
(PLAN A MURDER AND MAKE IT LOOK LIKE A SUICIDE OF COURSE)
• OCT 2011- After several weeks of outrage, Reed Hastings
apology – Netflix killed Qwikster
• It was terminated even before it was supposed to see a big
launch
• It was “renamed” DVD.com

16. MATURITY COMES WITH MISTAKES
AND COMPENSATION TO THE CONSUMERS
• Netflix offered more free trials to customers with higher
quality of content
• Promotional strategy included a plethora of stuff including:
– theatre tickets,
– commercial and radio spots
– banners and popups

17. LESSONS LEARNT
• Listen to the consumer:
– Netflix had always relied on heavy market research but in this case, it
was lax
• Shared product:
– Social media has significantly changed the product landscape, and
since it takes heavy feedback from consumers… consumers feel they
have a part in the development of the product
• …which leads to intense loyalty:
– In a similar fashion as was in the case of new coke, Netflix users were
outraged when they took away “their” brand name.

18. CONCLUSION
• Netflix correctly predicted the demise and cannibalisation of
its DVD segment by live streaming segment – but he acted too
early
• Proper Brand architecture/extension strategy should always be
a result of proper planning if we want to avoid a disaster.

19. CURRENT POSITION
• Netflix is the world’s leading
Internet television network
with over million members in
over 86 190 countries

20. FUTURE OF
NETFLIX
By 2020, there will be over a hundred million non-U.S. Netflix subscribers
worldwide (including me).

21. DISCLAIMER
• The presentation was made by Mayur B. Verma during the
PGP Brand Management course taught by Prof. Sameer
Mathur at IIM Sirmaur.
REFERENCES
1. https://en.wikipedia.org/wiki/Netflix
2. https://www.netflix.com/
3. https://www.statista.com/topics/842/netflix/
4. https://www.facebook.com/netflix/
5. http://www.nytimes.com/2011/10/25/technology/netflix-lost-800000-
members-with-price-rise-and-split-plan.html
6. Price MEME – google images, Webpronews