On the Call: Netflix CEO Reed Hastings

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LOS GATOS, Calif. (AP) ? When Netflix Inc. announced changes that will increase the price of its online video and DVD-by-mail service by as much as 60 percent, its customer service lines were initially swamped by infuriated subscribers who wanted to vent. The difficulty reaching Netflix on the phone made some customers even angrier and fed the perception that the company was caught off guard by the ferocity of the protests after the higher prices were announced two weeks ago.

Netflix CEO Reed Hastings drew a different picture Monday during a conference call with analysts to discuss the company’s second-quarter earnings. He said he expects the furor to die down not long after the new rates take effect in September. As it was, Hastings said the company was expecting a far worse customer backlash.

QUESTION: Netflix prides itself on customer service. Did the call volume after the price change surprise you at all? Calls were actually being disconnected instantaneously. And what about the social media reaction? Was the noise level in line or higher than you expected?

ANSWER: Believe it or not, the noise level was actually less than we expected, given a 60 percent price increase for some subscribers.

We knew what we were getting into. We tried to be as straightforward as we could. And that has worked out very well for us. In terms of the customer support line, it was a very short amount of time that it exceeded our capacity there and now our service levels have returned to our normal great service levels.