Earlier this year, Netflix seriously damaged its brand through two huge marketing debacles. First, Netflix unexpectedly increased its prices by 60%, requiring subscribers to pay additional fees to use its once-free Instant service. Then, a few short months later, Netflix announced that it was splitting its DVD-by-mail and Instant services into two separate companies: its Instant service would remain as Netflix and its DVD-by-mail service would be renamed Qwikster.
Marketplace confusion and questionable managerial judgment led stockholders to jump ship. Netflix quickly withdrew its plans to split its business, but still lost over 800,000 subscribers. Today, after the tremendous amount of consumer backlash, Netflix stock is only 23% of the value that it once was.
Netflix also has plenty of competition in the marketplace. Cheap rentals from Redbox kiosks have disrupted its DVD-by-mail service, and other online services from iTunes, Amazon, and HBO are building wider user bases.
There’s no denying that internet video is where the industry is headed. Just as digital music sales have dominated physical sales at retail outlets, and eBooks have outpaced their printed counterparts, internet-provided video is picking up steam.
So, what can Netflix do to secure its future among its increasing competition in such a seemingly prosperous market?
To state the obvious, Netflix needs to acquire a steady stream of new content. By keeping users entertained and happy with new shows and movies to watch, customers will have no reason to look elsewhere for new content.
Part of this approach should also include obtaining exclusive rights to popular movies and TV shows, including cult hits. If the most popular TV shows, like Mad Men, Dexter, and The Walking Dead, can only be found on Netflix and not on Amazon, people will flock to Netflix. Exclusive rights will clearly cost Netflix more money, but an increased number of happy subscribers should offset the price. There are also ways to capture Netflix and burn to DVD, which is a sneaky but cool way of watching Netflix streams anytime you want offline. Ideally you would need to capture the stream and then use a software like 123 Copy DVD to burn to a DVD.
The other part of their plan should be to offer 100% original content. This is the biggest opportunity to secure subscribers. This content would also be exclusive to Netflix, but will be brand new and released over Instant streaming. Netflix currently is investing in exclusive, original content like this. For example, Netflix bought David Fincher’s, the award-winning director of movies such as The Social Network, Fight Club, and this December’s The Girl with the Dragon Tattoo, new TV show House of Cards. Content from established directors like this is normally a sign of high quality and will be a great attraction for Netflix.
Netflix has a lot of ground to make up from its incredible loss, but it seems to be heading in the right direction.
I work for Cliq-Studios, a cabinet manufacturer which can help you with your kitchen remodeling from the website, check out their kitchen cabinets and furnishings. In my spare time I spent a lot of time using Netflix and wanted to share my expereience with you!
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