...then a new player comes in and the rules of the game change.


Radosław Florczak


October 07, 2021

Newsweek in 1995 published an article by Clifford Stoll, titled "Why the Web Won't Be Nirvana". I will post a short excerpt from that article here:

"Then there's cyberbusiness. We're promised instant catalog shopping—just point and click for great deals. We'll order airline tickets over the network, make restaurant reservations and negotiate sales contracts. Stores will become obselete. So how come my local mall does more business in an afternoon than the entire Internet handles in a month? Even if there were a trustworthy way to send money over the Internet—which there isn't—the network is missing a most essential ingredient of capitalism: salespeople."

Two years later, Netflix was created.

Of course, in the beginning it was not the company we know today. It was involved in mail order DVD rentals, as were several other companies, such as Magic Disc Entertainment, Reel, and DVD Express. From the start, however, Netflix had one interesting option: if you liked a title, you could leave it for yourself for an additional fee that was additionally very good value for money. The films sent to customers were packed in characteristic red envelopes.

Radek Radosław Florczak marketing

In subsequent years, the company increased its market share, introducing, for example, DVD subscription rental, a referral program... to have 5 million users in 2008, 25 million users in 2012, 100 million users in 2017, and now... already 200 million active users. The horror of the movie studios is already huge. They disregarded Netflix as their competitor, recognizing that the content distributor does not threaten them as content companies. You can read similar dismay on the faces of TV station owners to whom Netflix doesn't make its productions available. I predicted it, and I've talked about it many times, that Netflix would not stop there and would enter another area of entertainment for Consumers. And so it happened - although still game producers and gaming platforms - treat this Netflix's solution as a curiosity, the more threat-conscious managers, should already prepare for a merciless war with this player.

If I were to predict Netflix's next moves, just as I predicted the expansion of their gaming offerings, I would point to a drastic increase in their movie offerings, but from their own productions. This is somewhat due to necessity and the problems Netflix has faced in co-opting the studios. With their own production, Netflix is not interested in problems related to licensing, copyright, territorial restrictions, etc. The problem for Netflix may be the quality of content it will offer viewers. The need to produce a huge number of films and series will probably involve the introduction of general guidelines for, for example, scriptwriters or directors. This can cause the opposite reaction from customers, namely, "I've seen one movie on Netflix - I've seen them all".

Of course, there will be gems, i.e. films or series that deserve Oscars or Golden Globes, but it is possible that customers will feel that their time is being wasted. This could reflect negatively on the brand in the long run.

Let's take a look at the competition. We have some strong players in the market: HBO, Disney, AmazonPrime... they don't stand to lose to Netflix. It is possible to get an edge for these players against Netflix. The task is doable and I have already done the analysis myself in this regard.
Cinemas have a much more difficult task ahead of them. If they want to survive - they will have to change for their clients from restoration sites(you can watch a movie here and eat the most expensive popcorn), in a social gathering place. I can also imagine such a possibility for cinema chains to enter the video streaming market. However, this should be a different format than the already known solutions. Does that seem impossible? However, if the cinemas don't make a move, it's possible that in the near future they'll disappear from the market, just like DVD and, before that, VHS.

Let's get back to Netflix, though. As I wrote in the article "Touch points between brand and customer can be surprising" which you can read in full by clicking the link HERE, one of the biggest values to a company is people. For many business owners, however, the human operating in the company is not a value, but a cost. He becomes merely an employee, that is, an undervalued hired force whose work is paid for within a fixed time frame, and the employee performs that work for the employer. Whereas Netflix's strength is also its approach to people and the ideas they generate. Reed Hastings, CEO and founder of Netflix, described the process of creating a workplace culture in his book, No Rules Rules. Building trust, taking care of leisure and most importantly: counting on the opinion of others. It's because of this attitude and awareness that Netflix is where it is and the movie studios are standing by in horror. Netflix's owners have constructed a business based on marketing. It takes committed people to do that, not only employees.

Thank you! 
The above article is the private opinion of the author. It was not intended to offend anyone or depreciate the brand. We treat this article in educational terms. If you feel that the author in any way e.g. violated the good name of your brand - contact the author. I'm sure we'll come to a common understanding.

source of the quoted article: https://www.newsweek.com/clifford-stoll-why-web-wont-be-nirvana-185306
photo source: https://about.netflix.com 

Radosław Florczak

Radosław Florczak

A professional with many years of experience gained during the full process of designing and implementing marketing strategies, brand building, marketing communication, organization of trade marketing activities and their logistics in the supply chain. An expert in the field of brand activation, lotteries, commercial marketing, shopper marketing, e-commerce. A person with an open mind and taking advantage of opportunities that the competition does not see. Multidisciplinary, with a lot of positive energy. A negotiator using the Scotwork method.


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