Netflix stock plummets — can it recover?

Netflix made a big change and — at least in the short term— it’s backfired on the company in a big way. Netflix stock hit a 52-week low in trading Tuesday, a breathtaking fall from two months ago, when it was trading above $300 a share. Customers have made it clear that the decision to split the company into two separate services on the heels of a price change was a one-two punch that may send subscribers away in droves.

Many customers are probably feeling betrayed by a brand that they’ve helped to build, said Howard Belk, co-CEO and chief creative officer at the branding firm Siegel+Gale. He said Netflix hasn’t done a good job of communicating its changes to customers, though he thinks that the company can make its case with customers if it keeps its message clear.

But, he said, the company didn’t do itself any favors with the Qwikster name. “It’s an uninspired name,” he said, adding that the company’s strategy feels too much like a reaction to earlier uproar over the pricing changes.

“I think customers get it that they’re not going backwards and won’t backtrack on the changes they’ve made,” he said. “And people will get over it. Netflix will lose customers, but they aren’t losing the most important ones for the business model.”

Over at The Motley Fool, analyst Seth Jayson echoed the complaints of thousands of Netflix customers in saying that moving away from Netflix’s simple interface is also fueling discontent. Jayson said Netflix could learn a thing or two from one of its main competitors, Amazon, which provides a one-stop shop for everything. This isn’t the end for Netflix, he said, but stepping away from simplicity was a bad move.

“Keep it simple, and keep in mind this little rule of thumb,” he wrote. “If you are in a service industry and you find Wall Street applauding actions that your customers despise, you should ignore the guys with the rings and the ties.”

Related stories:

More technology coverage from The Post

Netflix, Qwikster: Two sites, two queues

Netflix dilemma: higher prices, less content

Hayley Tsukayama covers consumer technology for The Washington Post.

business

technology

Success! Check your inbox for details. You might also like:

Please enter a valid email address

See all newsletters

Comments
Show Comments
Most Read Business

business

technology

Success! Check your inbox for details.

See all newsletters

To keep reading, please enter your email address.

You’ll also receive from The Washington Post:
  • A free 6-week digital subscription
  • Our daily newsletter in your inbox

Please enter a valid email address

I have read and agree to the Terms of Service and Privacy Policy.

Please indicate agreement.

Thank you.

Check your inbox. We’ve sent an email explaining how to set up an account and activate your free digital subscription.