How Netflix's subscription marketing plan beat Blockbuster
In today’s age, people want what they want when they want it. There’s no better example of this than Netflix, which has recently made its debut in homes throughout Australia.
Although it has soared in popularity in Australia since its arrival, business professionals can take more from Netflix than simply which TV shows or movies to watch during their spare time.
Not only has Netflix replaced video rental companies such as Blockbuster, they’ve surpassed them. Netflix is worth about US$28 billion according to a report from Forbes last year, which is about 10 times what Blockbuster was worth before eventually going bankrupt in 2010.
The service has taken the model created by premium cable channels such as HBO and Showtime of giving freedom to consumers and giving them a great product, all while maintaining a realistic price plan. Allowing the customer to pay a monthly fee in exchange for alleviating the pressure of late charges and trips to retail locations give them the flexibility every consumer desires.
According to a study earlier this year by Consumer Electronics Show (CES), 51 per cent of people age 13 to 34 consider Netflix subscriptions very valuable compared to 42 per cent for broadcast channels and 36 per cent for cable subscriptions.
Companies that offer the same services as their competitors can find the subscription approach to be a great way to change how your brand is viewed. Recently, an American movie theater began a subscription plan of charging $35-45 per month in exchange for unlimited access. It’s an experiment that is based on providing value to customers, and is expected to be a trend that will continue around the United States.
Subscriptions can be beneficial for businesses if you can turn an occasional customer into a frequent customer. It will provide a dependable revenue stream, separate your brand from the competition, appeal to frequent consumers of your product or service and change the value proposition from single purchase to an ongoing relationship model. It essentially allows you to build a relationship with clients and cater to their needs as they change.
With most projects the goal is to simply finish. With the subscription model, the goal is to not only complete the project, but also continue to provide value over time. You should always look for ways to remain innovative and make a greater impact.
Today, Netflix is making headlines. In the future, customers, partners and investors will expect this kind of production from the businesses they chose to work with and invest in.
So be open-minded. Have a system that works now, but will also work in the future. Constantly change what you offer to bring people closer, and don’t be afraid to reinvent your product or service.