by Kevin Coupe
Conceding that Netflix had shot itself in the foot earlier this year when it raised prices 60 percent and tried to separate its DVD rental and internet streaming businesses (a split that was aborted in the glare of enormous customer backlash), CEO Reed Hastings sold a media conference in New York yesterday that he continues to believe that “internet video is going to change the world in the next 20 years.”
According to the coverage in Advertising Age, “By 2016, he estimated that over half of all TV would be internet-delivered and ‘broadcast TV will decline like landline telephony.’ Potential and real entrants into the streaming market include Amazon, Verizon, Microsoft's Xbox, Apple and even Google, but Mr. Hastings said Netflix's only serious competitor today is HBO, which competes for consumer spending and, increasingly, for the rights to premium content.”
That’s right. Premium content. Which also, in this case, means differentiated content.
The story goes on to report that “Hastings said that 5% to 15% of Netflix's content spending going forward would go toward original shows,” and that he described Netflix as “the ‘Moneyball’ of content acquirers,” using subscriber data to make customer-focused decisions about programming decisions in a way that tradition broadcast companies do not.
It is an enduring lesson that MNB likes to point out whenever possible.
To really be competitive, retailers need to offer products and services that are unique to them. That can mean differentiated private brands, and also can mean services that stand out as being either original or remarkable - or both - in a marketplace. It doesn’t mean not selling national brands, but it may mean having a different take on selection or pricing - or both.
Netflix has been providing a lot of business lessons lately. Things not to do, and things to do. Offering differentiated content is decidedly a positive move for the company.
All Eye-Openers.
Conceding that Netflix had shot itself in the foot earlier this year when it raised prices 60 percent and tried to separate its DVD rental and internet streaming businesses (a split that was aborted in the glare of enormous customer backlash), CEO Reed Hastings sold a media conference in New York yesterday that he continues to believe that “internet video is going to change the world in the next 20 years.”
According to the coverage in Advertising Age, “By 2016, he estimated that over half of all TV would be internet-delivered and ‘broadcast TV will decline like landline telephony.’ Potential and real entrants into the streaming market include Amazon, Verizon, Microsoft's Xbox, Apple and even Google, but Mr. Hastings said Netflix's only serious competitor today is HBO, which competes for consumer spending and, increasingly, for the rights to premium content.”
That’s right. Premium content. Which also, in this case, means differentiated content.
The story goes on to report that “Hastings said that 5% to 15% of Netflix's content spending going forward would go toward original shows,” and that he described Netflix as “the ‘Moneyball’ of content acquirers,” using subscriber data to make customer-focused decisions about programming decisions in a way that tradition broadcast companies do not.
It is an enduring lesson that MNB likes to point out whenever possible.
To really be competitive, retailers need to offer products and services that are unique to them. That can mean differentiated private brands, and also can mean services that stand out as being either original or remarkable - or both - in a marketplace. It doesn’t mean not selling national brands, but it may mean having a different take on selection or pricing - or both.
Netflix has been providing a lot of business lessons lately. Things not to do, and things to do. Offering differentiated content is decidedly a positive move for the company.
All Eye-Openers.
- KC's View:
