I have written often about my admiration for Netflix’s corporate communications. This includes my grudging admiration even in the case when they use those superior communication skills in disingenuous ways.
[Related: A sample list of such opinions, at the end of this post.]
Netflix announced its quarter results yesterday and the way they have framed their shareholders’ letter deserves a closer look.
Everyone was looking forward to the stupendous surge in Netflix usage and subscriptions for the last quarter given the fact that almost the entire human species is cooped up inside their homes now.
And, as expected, Netflix did have a phenomenal quarter. In the previous 4 quarters, Netflix added 9.6 million, 2.7 million, 6.77 million and 8.76 million paid new subscribers. In the first quarter of 2020, they added 15.7 million new subscribers! That takes their total to 182.86 million paid subscribers, making them one of the largest entertainment services in the world!
But despite having such fantastic news, the first page of the letter was totally rooted in reality and humility! The first 2 paragraphs, in particular:
In our 20+ year history, we have never seen a future more uncertain or unsettling. The coronavirus has reached every corner of the world and, in the absence of a widespread treatment or vaccine, no one knows how or when this terrible crisis will end. What’s clear is the escalating human cost in terms of lost lives and lost jobs, with tens of millions of people now out of work.
At Netflix, we’re acutely aware that we are fortunate to have a service that is even more meaningful to people confined at home, and which we can operate remotely with minimal disruption in the short to medium term. Like other home entertainment services, we’re seeing temporarily higher viewing and increased membership growth. In our case, this is offset by a sharply stronger US dollar, depressing our international revenue, resulting in revenue-as-forecast. We expect viewing to decline and membership growth to decelerate as home confinement ends, which we hope is soon.Source: Netflix’s letter to shareholders, Q1 2020.
The first paragraph is a sober, no-holds-barred reflection of the devastating impact of the coronavirus.
And even to frame the fact that they are blessed to be one of the few services that are seeing a significant increase in demand, they say, “we are acutely aware that we are fortunate”.
Plus the self-aware acknowledgment: “we’re seeing temporarily higher viewing and increased membership growth”.
My favorite part was, “We expect viewing to decline and membership growth to decelerate as home confinement ends, which we hope is soon“. The focus was razor-sharp on the ending of the trouble people are in due to home confinement, even as it could have been to celebrate the spectacular membership numbers albeit for one quarter. But the realization that any kind of even mild forms of celebration would be completely at odds with human suffering makes them temper the success in a solid dose of reality.
I love their communications team. And going by my tracking Reed’s own writing and interviews, I’m reasonably sure that much of this is coming right from the top – from the man himself.
How does all this focus on the nuances of communication help? It helps in the way media understands and frames their stories. Take a look at how that focus on words and nuances translates in the coverage – from just 3 leading newspapers: New York Times, Wall Street Journal and Washington Post, and Fortune’s Data Sheet newsletter (in that order, below).
Related – some of my previous posts on Netflix’s communications.