Is a spammer running Netflix?

A few months ago, I posted a spoofed Netflix phishing spam that I made up that poked fun at Netflix’s decision to increase their prices, and how spammers could exploit that.  I’ve been wanting to write a follow up post about how wrongheaded Netflix is these days.

You have to wonder if a spammer is in charge at Netflix.  Why would I say that?  One of the common spam techniques is to poop-and-scoop – send out spam dumping on a company that drives the share price down, buy the shares at a low price, and then wait for the news to blow over or be proven untrue.  When that happens, the stock prices naturally drifts back to its former level where the spammer unloads them for a nice, little profit.

With all the dumb things that Netflix has done lately, you have to wonder what they could possibly be thinking (this comic at The Oatmeal summarizes their moves and the rationale behind it):

• They annoy their customer base by increasing their prices by 60%.
• They apologize to their customers by splitting a popular part of their service and making it way more inconvenient.
• In an about face, they have reversed their decision to split their service into two components and are just keeping the one.

The first bullet point caused their stock to drop.  The second one accelerated it (just like a poop-and-scoop scam).  Now they are undoing that bad decision… the final part in the poop-and-scoop scam.  Will their share price drift back up now?

What part of their management team thought that all of this would be a good idea?  I’m not a businessman and even I can see how dumb this was.  It only makes sense if you are trying to shoot yourself in the foot.

"We underestimated the appeal of the single web site and a single service," Steve Swasey, a Netflix spokesman, said in a telephone interview. He quickly added: "We greatly underestimated it."

No, really, you think?

If I were going to make a bizarre phishing scam, I don’t think I could have come up with anything as creative as that.

And to make things even more bizarre, a couple of weeks ago I got an advertisement from Blockbuster that said “Angry at Netflix for increasing their prices by 60%?  Come to Blockbuster where you get unlimited DVDs by mail for only $10 per month!”

I shook my head.  Netflix split up it’s unlimited DVDs by mail service and streaming.  Each costs $8.  So let me get this straight, Blockbuster.  You are competing against unlimited DVDs and your service costs 25% more?  And you’re enticing me with that?  How dumb do you think I am!

I couldn’t make this stuff up myself because sometimes real life is stranger than fiction.  Even spammers must be thinking “Uh, we can’t make any money off of this.  How are we supposed to compete against an industry that is self-imploding?”