Wednesday, September 22, 2010

Netflix both teaches and learns a lesson

In my first-year classes this week, we've been discussing professionalism and ethics in PR, and how fundamental they are to any kind of long-term credibility (and, therefore, success).

In PR, we're in the business of building and nurturing relationships with a wide range of internal and external audiences. As is the case in our personal relationships, if the "other" doesn't have reason to feel we're dealing fairly and honestly, there's little chance of any positive relationship at all.

So ethics are, really, the bedrock of any successful public relations operation or career.

Just this morning, as my class discussed the elements of the Canadian Public Relations Society's Code of Professional Standards and what they mean for professional communicators, a real-life case study appeared to be playing out on a Toronto street, at the Canadian launch of Netflix.

The first impression wasn't good.

The first I heard about the launch was on Twitter later this afternoon, when I followed a link to a story in The Globe and Mail about video-streaming provider Netflix's Canadian launch... and the revelation that some of the enthusiastic "everyday Torontonians" who had been on-hand at the launch event and sharing their enthusiasm with the media were actually actors paid by the company to attend.

It looked as though Netflix had stacked the deck, so to speak, with people paid to express company-directed opinions about the Canadian launch.

The problem with this, as my first-year students will tell you, is that the ethical practice of PR would preclude trying to fool reporters with paid spokespeople masquerading as unbiased observers; in fact, such a practice would contravene articles 1, 2, 3 and 4 of the CPRS's Code of Professional Standards.

Why is it such a big deal?  Well, if journalists (and their audiences) can't trust that a company will deal honestly with them, they naturally have a harder time believing what it says. And that's going to have an impact on a company's ability to share its messages with its audiences in the long run. 

Then, it got a bit better.

In the story in The Globe and Mail, Netflix's Vice-President of Corporate Communications, Steve Swasey, sounded as though he'd completely agree. Explaining that the extras had been hired but that their talking to the media "was not supposed to happen,” Swasey said, “some people got carried away and it's embarrassing to Netflix.”

But then, it got a bit worse. 

An article on Cnet quoted Swasey as saying "We did not pay [the actors] to attend the press event. We didn't need to. The event was very well attended...somebody there said it was better attended than some press events for [Canada's] prime minister."

And an article on the CTV website further quoted him as saying "I was unaware that a script was handed out to extras and that was not supposed to happen... Extras were not supposed to talk to reporters or convey that they were anything other than promotional people."
But if you read the actual instruction sheet reportedly handed out to extras, it seems to suggest whoever wrote it did intend for them to talk to reporters: "Extras are to look really excited, particularly if asked by media to do any interviews about the prospect of Netflix in Canada."

So... what's really going on here?

Of course, I don't know; I wasn't there. But it wouldn't surprise me at all if someone at a lower level than Mr. Swasey had set this thing up, and fully intended for the media to unwittingly quote actors (let's say because he/she didn't know any better), and Mr. Swasey's responses were inconsistent because the company was truly caught off-guard by the turn of events.

Netflix isn't a beginner in the PR game - I think part of the reason this fumble got so much attention was that we collectively expect the company to be above this kind of thing.

Regardless, though, Netflix is going to have some making-up to do.

Lesson review 1: what did we learn from Netflix today?

Today, we got to witness in real-time what happens when public relations people don't deal honestly with journalists. As Swasey himself is quoted as having put it, this should have been a "perfect day" for Netflix; instead, he spent the day putting out fires on an embarrassing story.

Lesson review 2: what did Netflix learn from Netflix today?

As for Netflix, I suspect they may have learned that they have some tightening to do in the way they manage their events. Whether or not the company executives were aware that someone in their organization (whether internally or at their PR agency) was planning to try to dupe reporters, they paid the price in negative coverage.

I'm willing to bet that next time around, Netflix PR and agency staffers can expect to deal with a significantly stricter signoff process on the plans for company events.

UPDATE: Thursday morning

There's an update on the story this morning from the Canadian Press, in which Mr. Swasey apologizes for the incident in a blog post entitled "We Blew It," saying the extras were given "improper direction" and that they weren't supposed to have been talking to the media. "Swasey says the company didn't intend to mislead the media or public and he understands why questions were raised... 'This was a mistake and was not intended to be part of our launch plan. Simply put: we blew it,' Swasey writes in the blog post. 'We're sorry that our misfire has given Canadians any reasons to doubt our authenticity or our sincerity.'"

Given the circumstances, I don't think Netflix could have done anything more/better. Admit to the mistake, apologize, and move on.


  1. Heard about this on the radio this afternoon.
    Because of their blunder, many more people in Canada are aware of Netflix's launch than would have been otherwise. And likely 90% of them will forget the transgression in no time.
    Overall a good PR day for them? Good classroom discussion fodder.
    Of course, I wouldn't condone these kinds of tactics.

  2. Forget the transgression?
    Forget that.
    Spin it any way you want, here's the take-away:
    Netflix lies.

  3. Steve - you may be right that everyday media consumers may forget the transgression, but as Duncan points out, I don't think the media are likely to!

  4. And now Netflix has apologized for lying.

  5. Honesty is always an important key in public relations. This is such an interesting 'case' for discussion!... Apologies may be accepted in the end but it will be hard to forget- it's written all over their faces like an indelible ink that would fade away over a long period of time but its traces can still be found.

  6. Since I didn't know much about Netflix, "liars and fakes" is the only thing I can think of when I hear about them now. Such a bad move on their part!

  7. You've both made an important point: that no apology can ever undo a company's misdeed. Your audiences may forgive, but some will be unlikely to forget!