Netflix and the New World Order of Investor and Customer Relations

I have no position in $NFLX, and I am not a Netflix customer.  This is not a post to convince you to buy or sell NFLX stock, nor a commendation of NFLX’s recent business decisions.  Love or hate the company, love or hate the stock, one must be intrigued at least in the way in which Netflix communicates with the investing world and with their customers.

It’s not so much that CEO Reed Hastings wrote a calm, public reply after his “friend” Whitney Tilson published a short thesis on Netflix, or that Hastings managed to do so without demonizing short sellers (in fact, he did the opposite, noting: “For the record, I think short sellers are a positive force in capitalism, and I acknowledge that CEOs are generally biased in their bullishness on their respective firms.”).

What I’m really intrigued by is Hastings’s public sharing of his own thought process, actions, and mistakes on the Netflix Corporate blog.   More-so, I’m blown away by the fact that he takes the time to respond to a number of commenters on that thread.

Hastings knows that the feedback he gets when he publishes posts like this is invaluable: a free look into the minds of his customers.  Some of the feedback is hostile, emotional, impulsive, but it’s all worth what it costs him: nothing.

CEOs need not be given medals of honor when they admit wrongdoing, but it is also refreshing to see Hastings open his post with the admission that he screwed up:

“I messed up. I owe everyone an explanation.”

Hastings’s admission is in especially sharp contrast to $UBS CEO Oswald Gruebel, who went the “there was nothing we could have done about this” route with his own firm’s issues:

“If someone acts with criminal energy, then you can’t do anything. That will always be the case in our business”

StockTwits* is aiming to become a cog in the New World Order of Corporate Communication, and recently hosted DELL ‘s quarterly earnings announcement (among others) in real time.  As Stocktwits IR notes:

“Companies are actively posting 10-20 messages during their earnings call that highlight the key points – almost like a “Cliff Notes” for earnings.  We believe this is an incredibly powerful tool, as it allows investors to digest earnings in a much lighter format and can draw the reader into the company’s story to learn more.  Then to add the viral nature of investors retweeting earnings numbers, companies are finding real value in this new real-time medium.”

DELL didn’t really respond to investor inquiries on their “Stocktwits” release, but imagine the day when CEOs who are so inclined (I think Reed Hastings may be one of them) will respond to intelligent questions in almost real time from the public – not just from Wall Street sell side research analysts on a conference call.

The New World Order of Investor and Customer Relations is coming.


disclosure: no positions in $NFLX or $DELL

* My blog is part of the StockTwits network.  I own no equity in the company, and receive no compensation for mentioning their endeavors.

related:  StockTwits Launches Investor Relations Services For Public Companies

NYT’s David Pogue: Parsing Netflix’s “Apology”

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