Netflix — a brand so widely successful that it’s become a verb: “I’ll Netflix that later.”
In many ways, it seems as though no matter what kinds of content Netflix puts out, its popularity and value continue to rise. Sure, they’ve made some mistakes in the past. From cancellations of well-loved series to the “Qwickster” fiasco, there have been plenty of situations met with disapproval from critics and the public.
They’re by no means immune to controversy.
But, contrary to traditional belief, stirring up trouble might actually be helping them instead of hurting them. You see, a certain kind of controversy is part of the Netflix brand strategy.
So, how has Netflix used specialized controversy to solidify its brand image and increase brand awareness? This article will take a deep dive into their winning formula.
Stirring the Pot Since 1997
As you might remember, Netflix started out with a pay-per-rent model — shipping individual DVDs to their customers in the mail. Offering low price points and a simple set-up, Netflix discovered its early brand image: easy-to-use, affordable, and low-maintenance.
By 2000, Netflix dropped the single-rental model in favor of a monthly subscription concept — emphasizing its unlimited rentals and flat fee. Users welcomed this new set-up, and by early 2002, they saw a marked uptick in their subscriber numbers.
However, around 2010, Netflix made what might be its biggest mistake to date: trying to separate its streaming subscription from its DVD rentals, also known as the “Qwikster” debacle. This proposed change was met with massive backlash — thousands of angry customers posted negative comments on the company’s Facebook wall, and more than 25 million accounts were canceled.
Oh, and Netflix stock lost almost two-thirds of its value.
Understandably, Netflix walked back the decision by October 2011, stating that they grossly underestimated the appeal of a single service. While many praised Netflix for listening to their customers, others drew attention to the tumultuous chain of events and wishy-washy decision making.
Nevertheless, Netflix learned an important lesson: there are certain decisions that should not be made rashly — namely those concerning prices and subscription plans. So, if they were to be successful moving forward, public outrage and controversy need only apply to their content, not their business model.
Since then, Netflix has moved from strength to strength, becoming one of the most successful and profitable online streaming companies in the world. And their brand image has evolved as well, with an increased focus on a variety of choices and original content.
From peddling mail-order DVDs to producing their own content, Netflix has grown enormously. And along the way, they’ve figured out how to work the system: give the people what they want, but, every once in a while, throw in a nice, juicy (content-related) controversy.
A (Controversial) Formula for Success
When Netflix goes viral for releasing controversial content, as they did in summer 2020 with the hotly-contested Polish film or French movie Cuties, they often deal with backlash. Activist groups organize petitions online and social justice warriors cancel their subscriptions in protest.
Source: USA Today
However, thanks to the outraged coverage, films like 365 Days. While some criticized the aforementioned film’s themes of sexual violence and the romanticization of abusive relationships, it quickly became the most-watched movie in territories like the US, Germany, and the UK.
The viral nature of a good scandal cannot be denied — 365 Days made $9.5 million in the box office and boasted one of the longest periods as a “most-watched” item in the US in Netflix’s history.
While they may have upset certain demographics by standing by 365 Days, they gained far more than they lost. After all, whether or not one agreed with the film’s themes, many curious Netflix users just had to see what all the fuss was about.
And up, up, up went the numbers.
From questionable films such as Cuties to shows like 13 Reasons Why, it’s clear that Netflix stands by their decisions to release controversial content — their reasoning being that they support viewer choice.
A Netflix spokesperson explained, saying: “We believe strongly in giving our members around the world more choice and control over their Netflix viewing experience.”
Based on this logic, should users not want such contentious content to remain accessible on their account, it’s up to them to choose maturity settings for each profile.
The baton has been successfully passed.
However, this technique pretty much defines Netflix’s modus operandi and is a key part of their formula for success. Positioning themselves as a company that prioritizes freedom of choice, Netflix isn’t aligning themselves directly with their controversial content.
They’re just giving the people what they want — should you choose to watch it, that’s on you.
What’s the Hype?
Recently, Netflix announced a new reality showfeaturing the “Hype House” of Tik Tok fame. While some reacted positively to the news, the backlash from a vocal portion of the online community was immediate.
Many took to social media to express their disappointment and anger, with others going as far as to cancel their Netflix subscription. What’s more — Netflix stock seems to have taken a bit of a dip following the April 22 announcement, showing a 7% decrease in the following days.
Now, there’s no way to prove whether or not the change is directly related to the announcement, but it’s a pretty interesting coincidence.
So, why are people upset? Many of the “Hype House” members don’t boast the best of reputations. From “blackfishing” accusations of member Nikita Dragun to controversial tweets concerning sexual assault by Larray, the “Hype House” members aren’t what many would consider great role models.
Throw in the numerous parties they’ve hosted during a global pandemic, and it’s understandable why many people aren’t jazzed that Netflix is giving this group an even larger platform.
For a brand that often aligns itself with progressive social and political views, but still thrives on controversial shows such as Hype House, what does this recent situation say about Netflix’s brand image and values?
Brand Values vs. Brand Image: Are They in Opposition?
To be safe, let’s start with a few definitions. Brand values are the tenants that drive your business. They help define what your company stands for and embodies.
For example, Netflix lists some of its brand values as courage, inclusion, integrity, and impact. They strive to create a company culture that prizes innovation and responsibility and encourages employees to take informed risks.
On the other hand, brand image is your customer’s perception of your brand based on their experiences and interactions. Brand image consists of a company’s brand personality, positioning, and voice — essentially how they want to be viewed by the public.
Recently, Pulsar used the Social Brand Personality Index to analyze the public perceptions around Netflix, and they found that people view it as a “platform for light entertainment, self-care, and discovering new things.”
Netflix is also seen as the market leader for online streaming, with a reputation for competence. Sounds about right.
While many of these perceptions line up with the brand values Netflix has claimed, the question remains: does siding with freedom of choice release Netflix of any social or moral repercussions their content brings about?
Is Netflix not at all responsible for the issues their content can create? Is publishing questionable films like 365 Days or providing an enormous platform to problematic influencers a blameless activity? Does it promote integrity or consider impact?
There are no perfect answers to these questions, but one thing is clear: business-wise, it’s a great move. Controversy generates conversation which, in turn, leads to financial success.
Why change a winning strategy?
Ads & Live Sports? Netflix Backtracks in 2022
And as of 2022, Netflix has made a few more questionable decisions. From the beginning, the streaming platform has had two stances it claimed it wouldn't budge on: no ads and no live sports.
Well, earlier in the year, Netflix announced that it will be rolling out a less expensive streaming plan that includes ads. Gasp This is largely due to the fact that the brand lost subscribers in the first and second quarters of 2022 — "ending a decade of growth and sending Netflix's stock price into a tailspin."
But that's not all — the brand is also struggling to gain traction outside of the US, where it's dealing with more competition, such as HBO Max, Disney+, Hulu, and more. All the aforementioned streaming platforms offer less-expensive ad-supported plans. And though Netflix claimed it would never turn to ads, this year it "abruptly changed course once it became clear that its once seemingly unstoppable growth had stalled."
And even more recently, Netflix went back on its second claim of steering clear of live sports when it made a bid for Formula 1 broadcast rights in the US. Though the platform lost the bid to Disney's ESPN, it still proves that times really have changed for this streaming giant — and it's worried enough that it's starting to backtrack on its long-held brand values.
We'll wait to see how this impacts consumer perception of the brand, but we won't hold our breath.
Whether or not Netflix is at least partially responsible for the repercussions their content brings about is a philosophical debate that we, unfortunately, don’t have time for.
Approval of Netflix’s path to success aside, you can’t argue that it’s worked for them so far. By stirring up controversy with questionable films and unexpected cancelations, they’ve been able to keep the public eye on their brand for years.
And if Netflix keeps to this well-honed brand image — continuing to champion freedom of choice and provide diverse content — it’ll most likely continue to be wildly successful.
Now, that doesn’t mean there won’t be a scandal or two every few months. As a matter of fact, we’re counting on it.