"How to Kill a Brand": the Reed Hastings Biography (NFLX)

Netflix, Inc. (NASDAQ: NFLX) has managed to do what many thought was impossible.  The leadership’s changes have managed to kill the growth and direction of the brand, and it has happened in only a few short months.  By splitting the services up, by significantly changing the prices, by losing content partners… Reed Hastings has managed to kill the growth of the Netflix brand.

Customers can revolt against a company in an instant and the 800,000 customer losses in the third quarter versus the 600,000 projected only solidifies the move.  Reed Hastings is finding this out the hard way.  Content costs are rising and losing Starz really meant losing Sony and Disney.  Adding the CW and other TV network shows might not matter.  International customer additions are slow.  Does the word defection come to mind?  Or boycott? 

Hopefully Reed Hastings won’t start sending out political messages to his clients.  He should know that the move could send another half of his subscribers elsewhere.

Janney now has a new far uglier price target: $51.00. J.P. Morgan has cut the rating to Neutral from Overweight and cut the $205.00 target down to $67.00.  Citigroup has also cut the stock to Neutral from Buy.

If you want to see just how bad things are, Netflix shares are down under $74.00 after closing at $118.84 yesterday.  The 52-week low was $103.13 before today and this was at $300 (very briefly) as recently as July.

JON C. OGG