The ways in which companies communicate with their customers is changing. Slowly.
Publicly traded companies are beginning to embrace social media for business communication.
One of the reasons that companies have been slow to adopt social media for business communication is because of the SEC regulations that govern how information can be shared with the public.
But it looks like that is starting to change.
How Netflix got the ball rolling
Netflix is a great example of a company that is pushing the envelope when it comes to sharing information. Last year, CEO Reed Hastings landed in hot water when he posted information about company milestones on his Facebook page even though the company didn’t report the information in a public filing.
Ultimately, the SEC refrained from bringing an enforcement action against Hastings or Netflix because of uncertainty about how disclosure requirements pertain to social media.
Instead, the SEC released a report of its investigation that says companies can use social media outlets such as Facebook and Twitter to announce key information so long as investors have been told where to look.
What’s next for Netflix
Now that the SEC has given the go-ahead for companies to use social media to announce key information, Netflix is going all in.
When Netflix announces its quarterly earnings next week, there won’t be a standard earnings call. Instead, Hastings and CFO David Wells will host a live video discussion about the Company’s financial results, moderated by Rich Greenfield, BTIG Research and Julia Boorstin, CNBC, with questions submitted via email or twitter.
The future of social media for business communication
What started out as a potential problem for one company ended up being a victory for those that want to utilize social media for business communication, and we hope to see other companies taking a page out of the Netflix book.
What do you think? Will the new way that Netflix plans to announce its quarterly earnings catch on, or will it be the only company to go out on such a limb?