Netflix and the Myth of Transparency in the Modern Age

A few days ago, Netflix announced that it would not, after all, split the company in two. You know the story -- recognizing its future is in streaming media, Netflix set out to create separate companies for its DVD and Streaming businesses.

When the company met with a very bad reaction from customers (and a lot of other constituencies), it retracted the plan. Some press described Reed Hastings a "chastened", among other words.

There are probably a number of lessons here. But, I believe the lesson in this episode is that transparency in the new media age is a myth. Netflix was attempting to be the ultimate in transparent: acknowledging to the market that its future was not in DVDs and a new company needed to be formed. It wasn't hiding that fact or playing games. Just taking steps and moving ahead.

A lot of people say that in today's world of 24/7 communications, the market figures everything out and you might as well just admit what you are doing and not try to manage your communications. Netflix did just that and was roundly punished for it.

The reality is it's critical to be a bit cagey in today's world. Or alternatively, do what you want to do but don't acknowledge or admit it. We have seen Facebook, Amazon, Google and many other companies do that repeatedly in recent years. And despite exclamations to the contrary, some of these moves might be a just a little evil.

Netflix was actually trying to not be evil. And it was vilified.

Hashtag Movements: Whither big ideas and social media?

One of the most puzzling communications issues today is how to introduce new ideas in the current environment that is dominated by social media and often calls for 140 character ideas. This is a question I think about regularly because we often represent companies that aren't just an evolutionary step from something that exists already, but often call for people to think about new and different issues.

I was reminded of this puzzle in reading today's Reuters story about the current anti-Wall Street movement.

What can we learn from this movement, called "Occupy Wall Street" and which has been described as a "hashtag movement"? I think there's one big lesson: social media works to generate interest when you can sum up your new idea with a simple, short tagline. I am not trying to be caustic or cynical here. Just observant.

Does that work for all communications problems? I am going to have to keep thinking about it. Over the years, as we have worked with companies with big, new ideas, I have come to understand that to help them succeed we need to come up with a way to systematically lead the market to believe it needs what the company has. In "the old" world where people relied on somewhat extended stories, we could develop an educational program designed to raise questions, answer them and gently ease perception in the direction we wanted. This could be systematic and allowed for explanation and clarification along the way.

But how do you do this when 140 characters is the norm? This is a really big challenge for new ideas.

There's clearly an opportunity within the social media space to address this issue. In the meantime, is the answer a series of progressive "hashtag movements" to get a market from here to there?