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Netflix Shows Strong Results, Doubles Down on Great Customer Service

3 min read
Apr 22, 2020

It’s as obvious as the ending of a formulaic TV series. Everyone is stuck at home and looking for ways to pass the time. Netflix offers a lot of ways to pass the time. So, Netflix reported solid first-quarter results in otherwise catastrophic economic conditions. That said, a few details from the report give hints that Netflix’s current success is more than just a lucky coincidence.

Despite the rather jubilant mood of reporters looking for a positive story, Netflix was neutral and even downbeat in its letter to shareholders. The company acknowledged the increased demand but dismissed it as unremarkable. “Like other home entertainment services, we’re seeing temporarily higher viewing…” In any case, revenue wasn’t any higher than expected due to lower international revenue because the US dollar was stronger than expected.

The sober tone shouldn’t be surprising, however, as Netflix seems to realize that this isn’t a time to celebrate. It’s focused on the needs of its customers who are probably not all thriving during the crisis. This focus is clear from the investment Netflix made in customer support, adding another 2,000 agents to respond to increased demand.

This meme illustrates well what Netflix’s customer support focus means in practice.

Okay, not the meme itself, but I hope it at least made you laugh. Take a look at the first comment under that meme:

Netflix has a separate Twitter account to handle customer support, but this customer either didn’t know or forgot. In any case, Netflix wrote back right away and offered to help right in the thread – the thread under a meme that had nothing to do with customer support.

Netflix could still face other new challenges resulting from the pandemic. Production of new series and films is on hold all over the world. Here again, though, Netflix seems well-positioned. First, it has a huge catalog already available. Second, its recent investments in production give it a lineup of new content in post-production that it will release in the coming months as planned.

Since it’s Earth Day, we should also talk about the environmental impact of all this streaming. It’s significant but not as bad as you might have heard. As I wrote about recently, the biggest impact is on the side of the consumer. What kind of device you watch on makes a huge difference. For Netflix in particular, the story looks even better. It renewed its commitment to an ambitious investment in renewable energy three years ago. According to data from the EPA Green Power Partnership, the streaming giant has followed through.

Netflix seems like a lucky beneficiary of an unfortunate situation for now. But their carefully constructed strategy shouldn’t be ignored. It looks as if the strategy is built to help the company prosper for a long time to come.