Netflix: More work to do to rebuild customer relationship

Netflix Financial Chief David Wells also says the company won't be streaming live events or start selling ads for its U.S. site.

David Cross as Tobias Funke in a poster for the fourth season of "Arrested Development," available exclusively on Netflix. Netflix
Netflix still has some work to do to rebuild its relationship with customers, the company's financial chief said Wednesday.

David Wells, speaking at the J.P. Morgan tech conference, said Netflix expected the process to regain customers' trust would take about three years, and that's likely still the case. The company in 2011 angered users and lost nearly a million subscribers in four months after hiking prices and taking steps to separate Netflix's DVD operations from its streaming video business.

Wells noted at the tech conference, which offered a live feed of the conversation, that Netflix continues to see improvements in metrics such as "likelihood to recommend" and net subscriber additions, but "we still feel like there's more recovery to be had."

"We're still mindful that any negative pricing things could set that fire off again," Wells said.

Netflix has been digging itself out of a hole since it first unveiled the pricing. It has been adding more streaming members and posting strong financial results. And the company also has started offering original programming to attract new users, including its popular "House of Cards" miniseries. Its latest original programming, the fourth season of "Arrested Development," will be available later this month.

Wells on Wednesday said it's uncertain how much "Arrested Development" will help boost subscribers. He noted that Netflix expects it "will take multiple [original content] titles for there to be a real impact on net additions."

"'Arrest Development' fits in an interesting category," he said. "It has a very, very loyal fan base. There's an acknowledgement that it might have an impact in Q2...'Arrested' is a wild card."

He noted that Netflix will experiment with owning more pieces of a particular show, such as exclusive rights to online streaming and DVDs, instead of just one piece. While Netflix is the only company that can stream "House of Cards," Amazon has been promoting the DVD release on its site.

And Netflix also may experiment with new features on its site, such as a tab for original content that can highlight what's new and different.

"By the end of the year, we'll have a more robust offering" of original content, Wells said.

Meanwhile, Wells said Netflix won't be streaming live content, such as sports and concerts, and it has no plans to sell ads for its U.S. site.

"We did experiment with [ads] awhile ago in the past," Wells said. "We felt like it was not conducive to the brand we have today."

 

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