After a tumultuous year for Netflix, long-time Chief Marketing Officer Leslie Kilgore will be stepping down from her role with the company. In her place, Netflix has named Jessie Becker as its interim Chief Marketing Officer and appointed Jonathan Friedland as the company’s Chief Communications Officer.
Kilgore had been Netflix’s marketing chief for 12 years, but the company suffered a number of setbacks in 2011. They began with an announced price hike that angered many customers as the company raised prices for joint DVD-and-streaming subscribers by as much as 60 percent. But the bad news kept coming, as Netflix came forward with plans to separate those services and spin out its DVD-by-mail business as a standalone service called Qwikster that never actually launched. Along with the news that Netflix would not be re-upping its Starz streaming deal in 2012, caused many subscribers to reconsider whether they wanted to stick with the company.
While Netflix might have moved too quickly to separate streaming from its DVD business, the real issue is that the company mismanaged communications with its customer base, which up until recently had been pretty loyal to the company. For years, Netflix was named among the top companies in terms of consumer satisfaction, but a number of stumbles in a short period of time caused the company to lose subscriber and investor support.
Netflix lost 800,000 subscribers in the third quarter, and its stock has fallen from more than $300 a share to as low as $62 over the past six months. While it’s been trading up recently — and has stabilized around $100 a share — it’s still a long way back to where things stood in the early part of last summer.
As a result, a shakeup in marketing and communications shouldn’t be too surprising: After all, Netflix doesn’t just depend on advertising to get people on board. It depends on positive word of mouth from its subscribers to start growing its domestic membership again.