Facebook, Netflix, and the art of blowing the lead

This week, both Facebook and Netflix--two indisputable leaders in tech--got a little cocky and might blow the entire game because of it. Is arrogance the one thing customers simply will not stand?

It's a pretty old story. At some point, when your team is up by 20 or 30 points headed into the fourth quarter, a little complacency sets in. You get cocky, thinking you've got it in the bag. You bench your starters and let the new guys with the big ideas start trying out some new things. You start tinkering with the formula, running some new plays, maybe even showing off a little.

And that's exactly how you end up in the losing column of the greatest comebacks of all time wrapups that will inevitably include the story of your stunning collapse.

This week in the tech world, we've seen two of the indisputable leaders in the space, Facebook and Netflix, start to fall apart late in the game. In fact, the startling implosion of Netflix early in the week was topped only by the atomic-like bomb that is Facebook's new redesign.

The redesign appeared today, for most, with a blog post from Facebook attempting to explain the changes. Now, Facebook is obviously no stranger to rage about its redesigns and feature rollouts. The original News Feed, the Beacon program, and every profile update and "privacy" update. There's an entire Wikipedia page devoted to criticism of Facebook. So, what's the big deal about the latest pixel-pushing update?

Well, first, it's kind of a mess.

YO DAWG I HERD YOU LIKE FACEBOOK SO WE PUT A FACEBOOK IN THE UPPER RIGHT OF YO FACEBOOK SO YOU CAN FACEBOOK WHILE YOU FACEBOOK
That about sums it up.

There are duplicate feeds of news and status all over the page, there are status updates in the chat box. The status update box is gone, replaced with a link; the Account menu option on which so many privacy-tweak How-To instructional videos rely is also gone, replaced with a drop-down arrow. The weird real-time status update widget on the right isn't labeled (what's the difference between that and the News Feed, again?) and it doesn't scroll with the page, just stays there like an odd, persistent slug. And when you first encounter the new page, with all the weird pop-up instructions festooned all over it, it's so appalling I just closed the tab completely.

Facebook's redesign, on first appearance
Um. What, now? CNET

Second, though, the redesign is arrogant and controlling, and that's what makes it a little more dangerous than previous Facebook design storms. In the blog post announcing the changes, Facebook's Mark Tonkelowitz describes a complicated system for showing you news from your feed in which Facebook itself somehow decides what's "interesting" and "important." How often you visit determines what "Top Stories" you see. Then the "ticker," the weird real-time widget, apparently shows you the actual chronologically ordered News Feed along with every single comment or activity that goes along with it. Messy.

And--I kind of want a nickel for how many times I've typed this sentence about Facebook in the past few years--none of it is optional. No more "most recent" link to let you decide that you prefer your News Feed to be a simple chronological listing of updates from the select group of people online you have decided to befriend. You can't hide the annoying ticker (although you can make it smaller ). If you check often enough (really!?) to only see Recent News and not Top News, there's no way to toggle to Top News, in case you are curious about what Facebook thinks is "interesting." Facebook is now in charge of which of your friends interest you, at what moment in time, and that, quite simply, is that.

Here's how we've decided you like your news.
Here's how we've decided you like your news. CNET

Reaction? Not good. Timing? Less good, considering that Google+ just opened its doors to the world this week, and got a lot of folks thinking it might be kind of easy to slip into a world a lot of them already use--to combine their e-mail, search, calendar, and photo services with their social networks and be off to the races.

When it comes to Facebook, most of the Web is the defeated team hoping for a miracle in the fourth quarter. Facebook may have just given them an opening. Most users don't truly care about privacy--Mark Zuckerberg is sadly right about that. The slow and steady exposure of personal information to the world is part and parcel of a new mentality online, it wasn't going to force people off the site in droves. But this new arrogance, this new dictating of what you'll see and when you'll see it and what's interesting...this might prove indigestible.

The compact with Facebook has always been that we'll turn over our valuable personal information, our browsing and shopping habits, and our likes and dislikes, and in return, we get to keep up with our friends, stalk love interests, and watch the world of our "social graphs" go by in whatever form we like. It's not "News," Facebook. It's life. They're not your friends. They're mine. Users will take a lot of abuse, but make no mistake: Facebook is utterly optional. And when a company's tone slips over into arrogance, tone-deafness, and bullying, there's almost always an alternative waiting in the wings. If that alternative is Google, all the more reason to fear.

Netflix is in a similar position, albeit without an equally obvious alternative. Reeling from a hostile reaction to its 60 percent price hike on combined DVD/streaming plans, Netflix was watching subscribers defect in droves and its stock price slide further day after day. Ironically, CEO Reed Hastings had confidently reassured shareholders that customers might be upset about the price hikes, but they'd never go so far as to leave the service. Netflix is just too wonderful! And once they quit their complaining and start paying, Netflix would be making more money than ever! Oh, that elephant-sized shape over there marked "no streaming content" and "30-day delay on new DVD releases" and "recession"? Pay no mind!

But defect customers did, and as they were leaving, they told Netflix loud and clear that it wasn't just about the price hikes and the lack of content and the increasingly consumer-unfriendly concessions they'd made to the studios. It was the arrogance, the callousness, and the hubris of telling shareholders that your sheep-like customers would take the abuse, take a little more abuse, and then come back and ask for more.

Welcome Qwikster! (Sigh.)
Welcome Qwikster! (Sigh.)

In response, and pretty clearly in a panic, Netflix made it worse, as you now know: a consumer-unfriendly branding split that forces users into two queues, two Web sites, and two too many choices of services that offer too few benefits. The split continues to push a future-looking agenda--the death of DVD and the rise of streaming as the dominant media consumption--down the throats of consumers who, frankly, aren't quite ready for that future. The spinoff of the Qwikster service feels like setting DVD out to pasture, and while I certainly concur that DVD is headed for pasture, the thinnest of streaming libraries and a lack of widespread consumer acceptance puts that pasture farther out on the horizon than Netflix realizes.

Again, switching your credit card information over to a new site and continuing to get DVDs unabated isn't the worst problem anyone will face in the modern world, just as Facebook's redesign is annoying, but hardly an earth-shattering problem compared to war, famine, unjust executions, and heck, even Google's Senate antitrust hearing.

But that's exactly the thing that Netflix and Facebook don't want their customers to realize: just how optional they really are. Because the worst thing in the world is to end up being the team that lost the big game. After all, those are the names nobody remembers.

 

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