And the Oscar Goes to�Netflix

By Cindy Waxer September 23, 2010

It’s not often that Netflix stumbles. The subscription-based movie and TV rental service has a market capitalization of $6.4 billion, has grown its revenue from around $996.66 million in 2006 to $1.68 billion in 2009, and analysts are anticipating the company will record $2.17 billion this year. What’s more, in 2011, this number is expected to grow to $2.77 billion. 

Quite an impressive profile especially considering Netflix was once called “a worthless piece of crap with really nice people running it,” by Michael Pachter, a Wedbush Morgan Securities analyst, back in 2005. Boy, did Netflix prove Pachter – and many other naysayers, wrong.

But this morning, the talk around Netflix wasn’t about a soaring stock price but a botched publicity stunt. This week, Netflix announced that, the U.S. company’s first website outside the United States, would go live, delivering its online streaming service to Canada.

However, a street celebration turned into a marketing disaster after reporters discovered that actors hired by Netflix had been instructed to hype the arrival of the company’s video streaming service at the event. In fact, according to The Financial Post’s website, it was during a scheduled press event in Toronto that reporters from Canadian media apparently noticed that some of the responses from people in attendance sounded like “canned responses.” The actors also were urged to fill a variety of stereotypical roles, including “mothers, film buffs, tech geeks, couch potatoes,” according to the one-page handout given to them.

According to Netflix spokesman Steve Swasey, while some of the people who attended the launch event were actors paid by Netflix, they were not paid to attend the press event. What’s more, said Swasey, Netflix never intended to mislead reporters, pointing the finger at the lengths Netflix had to go to obtain a permit to close an entire street for the celebration. To qualify for the permit, Swasey said Netflix decided to film a fake documentary which resulted in hiring a handful of actors to attract an audience for the event.

Edited by Erin Harrison

TechZone360 Contributing Editor

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