Word Cloud On Netflix from Social Media Monitoring
I teamed up with my friend Jennifer Tyler, @JenHowell4, at Sysomos and we did a little social media monitoring on the Netflix situation. One of the goals of this blog post is to show that data can be used to tell a story. When you tell a story, the audience listens.
A Cause for Pause I hope that this case study gives every CEO, CMO… a cause for pause — to consider social media as well as social media monitoring –to give it a real, hard consideration. Not just because you want to avoid risk, but because you can begin to see that there is mission critical, real-time data that you can use in your business. And so now to our story, aided by the social media monitoring data.
Blockbuster’s Customers Didn’t Like the Delivery System Because It Involved Late Fees If we examine what was being said about Blockbuster in social media prior to bankruptcy, the negative conversation was around late fees. Clearly there was something not working about the delivery of movies. Customers had to come in, rent the DVD and remember to return them on time. Or else the “evil” late fees would consume their positivity around the brand.
But was Blockbuster listening? It doesn’t appear that they were “hearing” the feedback, at least not enough to shift their business model. Here’s a word cloud that can be generated via social media monitoring. It tells you what was being said about Blockbuster in social media. You can clearly see- in the word cloud- that the main jist of the conversation was about late fees. (In word clouds, the larger the words, the more times they are mentioned in social media.)
Social Media Monitoring Word Cloud on Blockbuster
If Blockbuster was using social media monitoring, they could have seen that their customer sentiment was not positive. They could have clicked on the red part of the pie chart to understand what customer’s were upset about. By clicking on the graph they could choose to look at tweets, at blog posts, etc… that pertain to that negative sentiment.
Blockbuster Sentiment Chart in 2010
But Blockbuster didn’t listen — or at least they didn’t hear and shift their business and had to file bankruptcy on Sept 23, 2010. You can see in the word cloud about Blockbuster’s bankruptcy, that Netflix is showing up in the conversation. Clearly something to pay attention to — when the word cloud is supposed to be about your business and your competitor is showing up in the same cloud! YIKES!
Blockbuster Word Cloud Sept 23 1010 Bankruptcy
Social media monitoring can show you what is being said about your company. Below are clips that represent blog posts in social media about Blockbuster’s bankruptcy.
Conversations on the web about Blockbuster's Bankruptcy
And here’s customer sentiment around Blockbuster’s bankruptcy in tweets:
Blockbuster Twitter Conversations About the Bankruptcy
July 12, 2011 Flash Forward to July 12, 2011. Was Netflix listening to their customers? If you look at the graph at the top left hand side, you see a yellow-ish curve. It is pretty much the same height until July 12, 2011.
What you can do in social media monitoring is to click on the peak and then see what that is attributed to. In the upper, right hand corner, you can see the blog post by Netflix’s CEO Reed Hastings is what gave rise to the spike in social media and online conversations. The screenshot is of the Facebook post with a link to the CEO’s blog post. There are 81,789 comments. Out of those comments, there are 1,429 Likes. That’s about 1.7% positive responses.
If we do a word cloud on the same peak, we can see what the main topics are. That’s the group of words to the lower right. The key words are: Netflix, price, hike, streaming, dear…. It’s clear what the crowd is upset about. If we look at the lower left screen grab, you can see a buzz graph. The buzz graph tells you what words are being used in association with other words and the thicker the line, the more prominent is the use of the word. Those words are: increase, stream and redbox…
Social Media Monitoring Data on Netflix July 12 2011 Price Hike/ Change
Here’s the actual blog post by Hastings— note that he ends the post with telling customers that they can cancel their services at any time.
Netflix CEO Reed Hastings Blog Post July 12 2011, With Invitation To Cancel Customer Subscriptions
Here’s some of the thousands of comments to the CEO’s posts, most all negative, about the changes to the Netflix services:
Customers Reaction to Netflix CEO Reed Hastings Blog Post July 12 2011
Despite the >23,000 negative comments on the blog on July 12, 2011, Netflix sent out a notice on the price hike on Sept 19th, 2011. What happens when you don’t listen or hear & you act without considering what customers think, feel and know? Customers were outraged… and the press picked up the coverage… If for no other reason than the press looks to social media for stories, companies MUST start taking social media seriously.
Press That Covered Netflix Price Change and Splitting Up the Company
And here’s some of the titles of the articles below. Companies work very hard to get coverage like this. Unfortunately, it wasn’t positive coverage.
Titles of Articles About Netflix
Here’s a sample of the tweets about Qwikster (Netflix’s new offering) – Sept 19th, 2011.
Sample of Tweets About Netflix Qwikster
And the three top words in the Buzz Graph?
Buzz Graph on Netflix CEO Reed Hastings
Here’s Doug Gross’s article, from CNN Tech and The Daily Dog’s Report on Netflix:
Daily Dog's Story on Reed Hastings and Netflix
And Tom Loftus’s Wall Street Journal story on Netflix and Reed Hastings:
Wall Street Journal's Story on Netflix's CEO Reed Hastings
And more stories from some great journalists:
Stan Schroeder, Mashable: Netflix’s @Qwikster Problem: Twitter Account Controlled by Weed-Smoking Elmo
Ben Fritz, LATimes: Netflix CEO admits ‘arrogance,’ renames disc business Qwikster Mark Memmott, NPR: Netflix’ News: Signal Of DVD’s Demise?
Scott Cleland, Forbes: Netflix Crushes Its Own Momentum
Matt Burns, TechCrunch: Netflix Stock Erases 12 Months Of Massive Growth, Crashes Through 52 Week Low
Mike Issac, WIRED: Meet Qwikster: Netflix Spins Off Discs-By-Mail from Streaming Video
Austin Carr, FastCompany: Netflix: What We’ve Got Here Is A Failure To Communicate
What was interesting is that I checked Blockbuster’s twitter handle… and guess what I saw? Blockbuster is NOW listening! They are offering 1 year subscription to the people who provide the best reason for leaving NetFlix:
- Blockbuster is listening now!!!
What makes this whole situation even worse, like Stan at Mashable said… Netflix didn’t even check the twitter handle– @Qwikster. Someone else has it. Here is one of his typical tweets. It’s not “on brand” with Netflix and Netflix doesn’t own the twitter handle. (Note to companies- before you pick the name of a new company, go to Twitter and check to see if the name is available!!)
Qwikster Tweets
Did Blockbuster cross the chasm of it’s time? No. It’s customers were saying, “We want a different delivery system where we don’t get dinged for late fees.” It didn’t shift with the changes in the marketplace. Did Netflix take their spot. You bet. Did Netflix get arrogant? One would think that after >87,000 comments or 24,000 comments, that if the customer’s weren’t good with what was being proposed, and Netflix went ahead anyways, yes, it appears so.
What could Netflix have done better? Ask the customers what they think before making a declaration. Explain that to keep the company profitable and to keep delivering the streaming services, that there might need to be some changes. Ask, don’t tell is the VERY FIRST things good leaders learn in and out of business school. Asking vs telling would be a paradigm shift for most CEOs.
Netflix announced the deal with Facebook and Michael Drobac, director of Government Relations at Netflix is asking customers to help bring Facebook Sharing to the US. Has Hastings done so much damage that fans and customers will not rise to help? Did the apologies and explanations by Hastings help or hurt the company? Do you think Hastings understands what he did wrong? Todd Wasserman of Mashable.com reported rumors of Blockbuster to launch a Netflix rival. Is it too late for Netflix?
A Social Media Teaching Moment What can we learn from this? Call it a “teaching moment.” We can conclude that’s its important to listen to our customers. It’s important that executives listen to customers and use that feedback to make good decisions. The information about a company that is contained in social media is real-time and real relevant. It’s your customers, your advocates, your influencers, your ambassadors, the press and your nay-sayers giving you their point of view. And it lives forever, it can go viral and change not only what customer’s think but also what investors think, as well as stock prices. Social media is clearly a medium, that if you don’t understand it, it can get you!
So where is your company in the adoption of social media? If it’s stuck, then perhaps consider social media monitoring. It will give you:
- A benchmark on where your sentiment and share of voice is- especially compared to your competitors
- Assurances that what you are doing is working; fair warning when it isn’t
- Mission critical data to adjust your products and service
- Data to help create a business case for the decisions you are making
- And give you data that can be used to calculate social media ROI.
Where is Social Media Going? Many people are asking me what’s the next phase in social media? They’ve got their Facebook and Twitter handle and they are posting. They have somewhat of a content strategy and interaction plan. And they are trying to drive customers through a marketing funnel and help customers with their customer service issues.
The Third WAVE of Social Media Adoption The next phase, and maybe it should be one of the first phases, is to do social media monitoring. Why? A good case study in this is re: Netflix and Blockbuster situation. Where we are in the social media lifecycle is the Third Wave. Wave One was lead by the Innnovators. Wave Two was championed by the Early Adopters.
- The Social Media Adoption Curve by Dr Natalie Petouhoff
For social media to become the business-changing paradigm shift that it can be, it must win over the Early Majority. If that happens, then the business world would be entering WAVE Three, in the Social Media Adoption Curve. (I adopted Geoffrey Moore’s and Roger’s Diffusion Theory thought leadership around this concept.)
Don't do the Ostrich
Take your head out of the sand and cross the chasm
The Social Media Adoption Chasm - Don't Fall Into The Gap
Link to my Social Media ROI videos: http://www.drnatalienews.com/blog/did-u-see-the-videos-on-the-roi-of-social-media
Link to my white papers on the ROI of Social Media: http://www.drnatalienews.com/blog/roi-of-social-media-white-papers-by-dr-natalie-petouhoff
Dr. Natalie is a business strategist and a futurist. She has spent her careers looking about how businesses interact with their customers and their employees and she provides companies with the best way to create environments that foster loyatly, motivation and innovation.
Great post Dr. Natalie. I too have tweeted negatively about the Netflix changes, but I received no response. For example, when I first tweeted about the split: “Best way to gouge customers? New Pricing. Correct! Who is condescending? @netflix Correct!” That was supposed to be funny (the ads we are all sick of, right?) I also tweeted “@Netflix was smokin’ dope like @Qwikster when they angered customers over pricing.” This is definitely a Social Media teaching moment.
Hi Charlie!
What’s interesting is the Netflix doesn’t seem to be responding to people. That’s a fundamental aspect of social networking. Can a brand survive, especially when their delivery system is essentially virtual without customer interactions in social channels!? Keep me posted and let me know if they respond. I don’t mean to pick on Netflix or Blockbuster. The truth is we are all learning as a collective consciousness about the dramatic shift in business that’s being driven by social media’s transparency that is truth-telling, authentic and genuine. These words rarely existed in describing companies in the past. What fascinating times we live in! Thanks Charlie for taking the time to read and comment on the blog post! @drnatalie
Hi Dr. Natalie,
Excellent and well researched post. Couldn’t agree more on the listening to the customer. In my experience with many top enterprises it has been planned ignorance, not accidental. They asks questions that limit responses to return positive information only – loaded questions in other words.
Even when, in cases like you have suggested, the writing is clearly on the wall, they ignore and move forward with the notion that “they know best”. Fascinating look at market place risk and how that can actually influence product/service development and even financial policy for enterprise.
There is an old expression – How long does it take to ruin a great brand? Not long if you try hard enough.
Again, many thanks for doing the research to move this past a left field opinion post.
Jeff – Sensei
Hi Jeff!
I appreciate the comments. My goal was to show, with a little bit of social media monitoring, the mountain of gold that can be obtained if brands are open to learning something new. I’m an old CRM person… marketing, sales and services applications – systems integrator and management consultant. I’ve watch businesses not pay attention to customers for years, even when they were trying to be customer centric. What’s interesting about social media is that when you aren’t paying attention and making strategic decisions, its all transparent for everyone to see the mistakes. Businesses have never had this happen before. I don’t think most of them realize that things are this obvious and the whole world can see… I call that the Witness Factor. Perhaps this, if nothing else, will increase adoption for the Early Majority!
My focus for the last two years has been social media monitoring and social analytics… and learning the ability to tell a story with data. Glad to know the studies and butt-in-seat-time has paid off! Look forward to talking soon!
@drnatalie
Enjoyed the post, Dr. Natalie. Makes me think of the old adage “be careful what you wish for, it just might come true.” Monitoring gives you access to information and sentiment from your customer base.
But as Chris Heuer (@chrisheuer) so adroitly pointed out at Social Media Masters in NY, “If your customers told you they didn’t like an upcoming product, would you have the courage to stop production and take it off the market?”
Alan,
I hear ya on the idea about having enough guts and being courageous. I think social media is the breeding ground for new leadership. I do know companies that are using the social crowd to make decisions about products and services. They are getting the feedback from social networks and changing their product roadmap and direction. So to answer your question– and the one Chris Heuer points out – there are companies who are rewarding managers, directors, VPs, SVPs and executives for these kinds of decisions.
I think the bigger question is — do you — not meaning you personally — work in an environment where decisions like this can be made? Or would it be career suicide to “stop the line?” My guess will be — because of where we are in this next phase of social media adoption, that it will take a while to sort out the courageous from the non. I think that what will separate companies and their leadership is the devastating results that not listening and acting on customer feedback will have one brands.
Imagine a company that does listen. Imagine their competitor that doesn’t listen. Imagine the company that is listening… they hear the feedback, they make changes to their products and service, and then they let their customers know that they did that.
Now imagine a company that is putting out the same old, same old. The customers are talking in the social net, but the company isn’t listening. Customers are getting used to the companies that are trying and especially those that are making real changes. Imagine 1, 2, 4 10 years from now.
If you were a customer, who would you rather buy from? A company that is arrogant and doesn’t listen to the feedback to make products and services that make more sense to the buying audience? Or buy from a company that doesn’t understand, doesn’t seem to care and blatantly — in an unsubtle and unashamed manner, ignores the customer?
My guess is that companies that do this will end up going out of business. And those that do listen, will grow like topsy.
@drnatalie
Dr. Natalie,
Your post is well-written and researched, and you do a great job of telling a story with the data as you intended. My only question is, did Netflix actually lose revenue from the price split? I know people were outraged, but of course they were. They were paying $9.99, and all of a sudden they have to pay $17.99 if they want both services. However, compared to paying for movies on cable or on-demand, they still save a lot of money.
I think Netflix thought about this thoroughly, and even though they didn’t present their announcement in an optimal way, I think if they are losing money on this, it’s not significant. In the long run, they make actually be making even more money because now people have the option of getting the streaming service OR the DVD rental service. Looking at the numbers is the only way to tell for sure.
When it comes to social media monitoring, I think it’s actually just the first step in quantifying a company’s social presence or social buzz. I think most of the insight in this article actually came from YOU, not Sysomos. The software i’m sure helped you out, but because of your critical thinking ability and expertise in evaluating customer’s, you were able to derive insights that frankly most companies struggle to do.
Basically, the bottom line is measuring the impact of social (or any unstructured data for that matter) on a company’s key business performance metrics. If you can’t tie the data to your business, looking at mentions in nice dashboards becomes irrelevant after awhile. Monitoring is of course better than nothing because of social media crisis prevention and obvious reputation management, as we’ve seen on multiple occasions that I wrote about here … http://blog.evoapp.com/post/8433714762/top-10-pr-disasters-social-media-giveth-and-social but the bottom line is, if you can’t derive actionable insights from the data and tie it to your business, monitoring loses its edge.
The next step beyond monitoring is social media business intelligence. What you’ve done in this post is use a software tool to put together a thorough analysis of an event that potentially could tarnish a massive company’s brand name, and outlined concrete examples of angry customers. If you were to go to the next level and show Netflix’s revenue over the same period of time or their reduction in profits or other financial figures, you’d get to the next level in business intelligence. I think THAT is the future; correlating the social data you find with key business performance metrics, to suggest to companies what it is they need to do to increase revenues based on social engagement and analysis.
Either way, great job and thank you for the post. If anything, YOU show exactly how to derive insights in a clear cut way to tell a story based on social media data. Keep up the great work,
– Sergei Dolukhanov
@sdolukhanov (twitter)
Hi Sergei!
I agree with you on all your points! The business of social business is that where one can take the social media monitoring data, tie it to business results and insights and then do that over time. I’ve built CEO social media dashboards that provide this type of data on a real-time basis. Now looking at how do you take the social media monitoring data and drive a business insight calculator!
The only way to know if social media does affect the long-term financials is to track them. United Airlines stock dropped with the Dave Carroll United Breaks Guitar video on tube. It’s gone up since. It’s a fascinating space to be in, for sure!
And thanks for the compliments!
Natalie
No worries, keep up the good work 🙂
– Sergei
[…] Could Social Media Monitoring Have Saved Netflix & Blockbuster from Themselves? – An interesting case study of how data analysis could have been used to avert a couple of social media crises. […]
Great report. Thank you
[…] not listen and understand their online audience, the backlash can be devastating. (Think Netflix- check out my blog post on how Netflix wasn’t really listening or understanding why customers w…t ) That doesn’t mean a brand should not enter into the social media realm. It means they need to […]