• by Erik Sass , Staff Writer, October 11, 2011

I can’t resist returning to this topic, as I seem to have morbid fascination with Netflix: I mean, when’s the last time you saw a high-profile, consumer-facing company get so many things wrong? This includes the company’s social media strategy, or rather a complete lack of one.

In the latest twist -- I hesitate to call it a “development,” as this suggests some kind of coherent plan -- Netflix CEO Reed Hastings announced that the company is scrapping plans to operate its DVD rental business as a new, separate company called Qwikster, while keeping the Netflix name for its growing streaming business. The move to scrap Qwikster comes after an outcry from Netflix customers who are used to the brand and didn’t want to deal with the hassle of new accounts with new billing details and so on.

This unpopular move came a few months after Netflix first triggered consumer backlash with the decision to raise subscription fees on most accounts, as part of the plan to eventually separate the streaming and DVD rental operations. Just as this brouhaha seemed to be dying down, Hastings picked at the scab with an ill-considered letter explaining the Qwikster plans -- but failing to outline any benefit to subscribers, many of whom probably expected the letter to be an apology scrapping the plans to raise subscription fees.

What is intriguing, through all this, is the total lack of a social media outreach strategy (as far as I can tell -- has anyone else encountered any social media messaging from Netflix on this topic?). I’m not suggesting that a social media strategy would allow Netflix to avoid consumer backlash altogether, but at the very least, interacting with irate consumers on social media channels would let them know that the company is listening.

The problem, of course, is that it isn’t. Indeed, I view the absence of a social media strategy as a symptom of the company’s general cluelessness when it comes to crisis control. If you have a PR problem, how can you afford not to make use of social media, where many consumers go for information and to vent their opinions?