Revenue for Netflix brand is up, but it’s no reason to gloat

Tom Dougherty, CEO – Stealing Share

31 January 2012

Netflix is surging, but office politics should be eliminated

In an interesting turn of events, Netflix has surprisingly reported that its fourth quarter revenue is up by nearly 50% from last year. That’s not bad for a Netflix brand that recently shot itself in both feet so accurately that even Plaxico Burress had to be envious.

“I do hope that the leaders of the Netflix brand — the Reed Hastings of the world — are clearheaded enough to recognize that, as leaders, they need to look at themselves to solve the biggest problems.”

Netflix brandSure, this is big news for Netflix — a company now notorious for errant leadership decisions, price spikes and alternative viewing options that led to a loss of 800,000 subscribers.

Adding back 600,000 subscribers is big news, but cumulatively being down 200,000 subscribers from two years ago is not a reason for Netflix to prepare for Mardi Gras. In my estimation, Netflix isn’t quite where it needs to be before publicly patting themselves on the back.

For one thing, I don’t think the departure of Netflix’s CMO, Leslie Kilgore, was needed. If speculation serves as any indicator (Kilgore’s departure remaining unknown to the media), one might assume that Netflix has opted to have her serve as the scapegoat for its recent woes.

I hope not. Was Netflix’s problem poor advertising? Not really, although the newest ad with the hamsters doesn’t work (and may not have had Kilgore’s fingerprints on it). The problem were the erroneous leadership decisions by the CEO.

While it is noted that Kilgore willingly chose to step into a different position within Netflix, the lack of pertinent information about her stepping down to the media is troubling. I do hope that the leaders of the Netflix brand — the Reed Hastings of the world — are clearheaded enough to recognize that, as leaders, they need to look at themselves to solve the biggest problems.

One of my favorite authors, John Steinbeck, said it best:

“Power does not corrupt. Fear corrupts, perhaps the fear of a loss of power.”

That fear of losing power once manifested itself at Netflix. We’ll see if it is still manifesting itself in the months to come.

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