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Netflix is an American provider of on-demand Internet streaming media. It is rolling out its streaming-video service now in Europe.
Businessweek points out that Netflix activities in the Netherlands adding content are based in part on what shows are popular on piracy websites. One of the shows that Netflix acquired the rights to in the Netherlands is Prison Break, since it is heavily pirated here.
This reminds me of a marketing story I was part of myself, being a marketer of children’s candy in the Netherlands in the 90s. As marketer you’re also responsible for initiating point-of-sale promotions to stimulate sales. In our candy company we had several product groups and one of my colleagues was really "king of promotions." When you initiate promotions it was quite common to have three or four failures out of five. My colleagues and I were no exception. Except one of them. All his promotions were spot on, increasing sales for his licorice candy products with double digits.
Once I asked him to tell me his secret. And he told me it was quite simple. He was approached by a lot of traders of little gifts and premiums. They knew that if we did a promotion, giving away their gifts on-pack, they could sell 100,000+. He picked out three gifts (often children’s puppets or gadgets) and put them on his desk. What would happen was that they were stolen a lot by our own colleagues from his desk, to give them away at home. My colleague kept a list how many times each potential promotional gift was stolen. After two weeks he would select the premium which was stolen most as his next on-pack promotion. In the three years I worked at the candy company he was never wrong…
Like theft, piracy can be viewed as a perfect indicator of consumer demand.
The Dutch Consumentenbond (Consumers’ Union) evaluated how many of the IMDB film top 30 and TV series top 30 could be watched in The Netherlands via Netflix and competitive (local) pay-per-view services like: RTL XL, Apple iTunes, MovieMax, Pathé Thuis, Kijk, Viewster, Ximon. Netflix offers most of the series and is ranked in the middle showing IMDB top 30 films.
So the key question for Netflix is not to identify what media consumers want. They are well aware of that. But is their ability to acquire the rights to popular films as strong as identifying them? That might be their "Achilles heel." Can Netflix give the people what they want?
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Gijs van Wulfen is a LinkedIn thought leader on innovation. He recently wrote "The Innovation Expedition, A Visual Toolkit to Start Innovation". Available at Amazon.com or Amazon.co.uk.
Photo Credits: Flickr/Coffee Table Art Stuff
Featured on:Technology
Posted by:Gijs van Wulfen
