We Can Learn from Business 101

courtesy pcworld.com

In racing, many lament its inability to think on its feet, or listen to its customers and respond in a timely fashion. For those who follow business outside the sport, we see such things each day.

Less than a month ago online streaming company Netflix announced that they were restructuring their offering by splitting the DVD rental business and the streaming business in two. In addition, they forced a price hike on customers, letting them know that the hike in DVD rental costs would be spun off to their streaming catalogue allowing them to expand the shows offered.

Customers were incensed. On chat boards, on facebook and everywhere else they did not want to login twice, be forced into the new DVD business (called "Qwikster"). As well, the share price was hammered.

Fast forward only one month. Just moments ago, Netflix has backed off their plans to split the offerings in two. They have added hundreds of new shows, TV's and news in their content since announcing the hike (delivering on what they promised), and lastly they announced to customers that pricing hikes will be a thing of the past. As an added bonus, the tech savvy company did not announce this via a 1947-type newswire service, but directly on its blog via a post from its CEO:

• We’ve recently added hundreds of movies from Paramount, Sony, Universal, Fox, Warner Bros., Lionsgate, MGM and Miramax. Plus, in the last couple of weeks alone, we’ve added over 3,500 TV episodes from ABC, NBC, FOX, CBS, USA, E!, Nickelodeon, Disney Channel, ABC Family, Discovery Channel, TLC, SyFy, A&E, History, and PBS. 

• It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs. This means no change: one website, one account, one password… in other words, no Qwikster..... we are now done with price changes.

Yes, in one month, a multi-billion dollar market cap company, with 25 million subscribers has changed  business strategy on a dime as a direct response to customers.

In racing - in places like California and elsewhere who have angered customers - we wait and wait and wait. And more than likely we quietly and unceremoniously leave.

Netflix shares are up to $130.20, or 10.92% in premarket trading.