An annus horribilis for RIM and Netflix
For those who don’t know what “annus horribilis” is, it means a “horrible year”. And for RIM and Netflix, a year they would like to bury. Both these companies committed massive flops, and were named by several analysts as the worst CEOs of the year – something that you don’t want to be part of. And surprisingly, they are still in their jobs – despite the massive failures this year.
For Netflix, it was their decision to essentially piss off their entire customer base. A company who essentially changed the video rental business with a new business model and the physical stores such as Blockbuster, it almost committed suicide when they decided to split the two core pieces – DVD and streaming – into separate companies. The streaming would stay “Netflix” while the DVD business would be named, in what may be the worst name in the world, “Qwikster”. It also appeared that Netflix didn’t research this and did this as a reaction to a consumer backlash to a recent price increase and a change in its plans. It also lost a major catalogue of movie streaming content after a deal with Starz ended.
Thankfully for many users, it was announced in October that it will not go ahead.
However, after the bad PR disaster, it managed to sign new deals with movie network Epix and several studios; and announced it will start producing its own content – including a new series of Arrested Development and a new drama based on the BBC’s House of Cards – outbidding HBO and AMC apparently for the rights to produce. So maybe that price increase came to some good use after all.
BBC News/YouTube (Uploaded by nsotd4)
RIM, however, was a major disaster in 2011. The company’s tablet – the Playbook – was lampooned by many since it was a tablet that relied heavily on the BlackBerry phone. The ecosystem was crap with a lack of applications. RIM was then forced to accept Android applications into the ecosystem since no one was developing for it. And it was poorly marketed – targeting corporations and not the consumer (reviews noted the excellent media support). It still targets businesses, ignorant to the idea that business people are also consumers.
The year got bad to worse. The company lost more than half of its market value, the share price is down 75 percent from last year and continues to haemorrhage money as it struggles to compete with the iPhone, Android and Windows Phone 7. Adding insult to injury, the company also experienced their biggest outage in October all over the world (except, for some unknown reason, Asia), and faces a ban in India (the second-largest country by population) due to a dispute over accessing encrypted communications.
BlackBerry/YouTube (Uploaded by nsotd4)
The company did announce their new BlackBerry 10 operating system (it was going to be called BBX, but then someone else had the name), but no smartphones running it. Everyone was expecting an announcement by Mobile World Congress next year, but then RIM decided their year of screwups needed, to quote Steve Jobs, “one more thing” – they will not be out until the latter part of 2012. For a company that is competing in a crowded market, a delay means death.
RIM’s shareholders are pretty much pissed. Some are calling for the two co-CEO’s heads, some are even asking for the entire board to be dumped and others are calling for RIM to break up and sell. Rumours of Amazon buying RIM have also emerged, but the likelihood of that deal going ahead is slim.
So congrats Mike Lazaridis and Jim Balsillie for running an innovative company for so many years into the ground. It will be a surprise if they stay in their jobs in 2012.