How Netflix Could Make Watch Instantly Even More Viral
September 18th, 2008 Davis
Netflix sent me an email yesterday announcing their latest promotional offer. The offer allows me to give out a one month free membership to five different friends. This is two weeks longer then their normal free trial and is certainly a good deal for anyone who is interested in DVDs by mail, but who still haven’t tried the service. Of course this isn’t the first time that Netflix has reached out to their customer base for referrals, but this time around they’ve added a new twist by giving their customers an extra free disc for referring Netflix the business.
The addition of the bonus disc reminds me of the Columbia House CD programs that I joined in high school and college. Since Columbia House would give out four free discs for a referral, I worked overtime to sign up all my friends for the service. As a music fan, I got pretty “creative” with the promotions and even worked out CD “revenue sharing” deals with my friends. This time around though, I don’t think I’ll be knocking myself out just for a couple of extra free rentals next month.
While it’s hard to fault Netflix for a smart word of mouth advertising campaign, I do think that they could leverage their customer base even better with a little bit of creativity. Over the last two years, Netflix has continually improved their Watch Instantly service. While the initial rollout was restricted to a limited number of films and to watching it on an Internet Explorer browser, it’s been exciting to watch Netflix rollout more movies and devices to support the service. Netflix still has a ways to go before they perfect their VOD product, but everyday they continue to enhance the service and by the end of the year, I think we’ll see 15,000 titles, Mac support and even an internet enabled television set that is capable of tapping into the service.
Even with these improvements though, if all you did was read the press coverage, you wouldn’t know that the service was any better then when it was first launched. Despite the fact that Netflix now has over 12,000 Watch Instantly titles available, they are still frequently criticized for not having a large enough selection. I don’t really feel that this is a fair criticism though, because it ignores the high satisfaction niche appeal of the movies that are already on the service.
It’s true that Watch Instantly doesn’t have a lot of mainstream hits, but because Netflix has been able to spy on gauge demand by looking at their customer’s queues, they’ve been able to fill about 10% of people’s queues with Watch Instantly selections (while still keeping the cost for their movies affordable for the company.) These may not be the mega hits that drive marketing campaigns for new subscribers, but by letting ME see films like Super Size Me and the Inconvenient Truth or British Sitcoms like Coupling, it’s created an experience that I’ve enjoyed just as much even more then the DVDs that I watched this weekend. With over 50 watch instantly films currently sitting in my queue, there’s been no shortage of high quality films for Freeberg despite what you may have heard about poor selection.
The problem is though, that from the outside all that people see are bunch of lousy b-rated movies that couldn’t cut it on the big screen, even if the Watch Instantly consumers love them.
So what should Netflix do?
I would argue that the company is sitting on a potential viral gold mine with the service. There have been times where some of my posts may get picked up on another blog or two, but I know that I’ve written something really powerful when people start emailing it to each other. With all the buzz and marketing campaigns it’s easy to fake legitimate viral demand, but it’s a lot harder to inspire the real thing.
Netflix can continue to send out friendly reminders and bribe their customers into giving word of mouth by giving them a good deal for their friends and a free movie for them, but how much more powerful would it be if you were allowed to send a specific film that you really enjoyed to a friend or family member for free?
What this would do is change the word of mouth emphasis from Netflix’s service and would instead turn every single watch instantly movie into a powerful emotional marketing channel for them. If you saw a film that you knew your Mom would love and was able to share it with her at no cost, no credit cards and no hassle, how much more likely is it that she’d subscribe to see more films?
Netflix already does a good job of personalizing their recommendations, but by leveraging their customer base through this type of promotion, a user could individualize the gift to the unique tastes of their friends and loved ones. Essentially, it would allow Netflix to match up “lousy” niche watch instantly movies with the long tail demand that really does loves them (without having to know anything about the people in your social circle.)
In addition to creating a more favorable watch instantly impression on new customers, this would also provide a convenient way for their current customers to give “gifts” to the people that they know. Growing up in a big family has its advantages, but just about every month, there is another birthday, graduation, holiday etc. to celebrate. While many of my loved ones deserve to be recognized on these events, it would be really expensive to give out gifts to everyone for minor holidays or accomplishments, but if Netflix limited the program to X number of free movies to give out each month, I could at least send a quick email with a free movie link and some words of encouragement for those not as important events. It may not be the same as taking the time to pick out a real gift, but it would be a way for you to recognized a cousin’s wedding anniversary without breaking the bank.
The threat of course would be that this could potentially eat into gift certificate sales, but Netflix could always turn on and off the promotion depending upon its impact on demand.
There would also be an ancillary advantage to using their watch instantly program as a marketing tool in this way, in that it would help Netflix to leverage the popularity of the service without having to promote the juicy details of how successful they’ve really been. Despite all of their hard work, Netflix’s has been very reluctant to discuss any of the metrics associated with the service, even though they are very likely the number one internet delivery movie provider on the net. Some might argue that their reluctance to talk about their success is a sign of failure, but I believe that they are trying to down play the appeal of subscription based VOD while they still have an early edge on the competition.
Some may also point out that I can already give away five free watch instantly experiences through their current promotion, but I believe that a two hour targeted subscription to Netflix would be 30 times more powerful then their current 30 day offer. It’s hard to know if such a program really would be successful without seeing it in action, but hopefully Netflix would at least be open to experimenting with some trial groups and then taking a look at the numbers. I believe that this type of program would be a runaway success and would make Netflix even more viral without having to bribe their members.
If you’re interested in one of my five free memberships that I have to give out, feel free to leave a comment and I’ll be happy to shoot you the promotional code they gave me, and no, I won’t be sharing my extra DVDs with you, even though you could have squeezed me for two free CDs during my Columbia house days.
Posted in Movies, VOD, Disclosure - I own stock in co. mentioned, Netflix | 1 Comment »
Holy Flash Batman, DivX Brings Hulu To Your TV
September 6th, 2008 Davis
Earlier this week, Ubergizmo broke the news that DivX has officially updated their Connected software to include support for flash video. With 98% of the world’s computers already using flash, this may not seem like a big deal, but when you consider that 0% of the world’s televisions support flash, this really is groundbreaking.
Along with the update, DivX also released several plugins for their Connected device. These plugins add support for Vimeo, Daily Motion, YouTube and for the first time ever, Hulu all on your TV set. After playing around with the update, I created a video of the software in action. In the clip, I detail the basic features of DivX Connected and give you the very first look at Hulu Connected in action.
I hope to provide an even more detailed review in the future, but this news was simply too exciting to ignore. If you haven’t already checked out DivX Connected, I would encourage you to take a closer look. There are a lot of media bridge devices out there, but few of them have seen the kind of support that DivX has been able to generate from the open source community. Between the work that the community is doing with the Connected SDK and the work that DivX continues to do behind the scenes, they’ve managed to turn a very niche product into one of the most robust consumer electronic devices on the market without Connected customers having to buy new equipment. Considering that Connected has been out for less then a year, it’s remarkable to see how far the product has come in such a short time. I hope that you enjoy the video and that you’ll stay tuned for a more detailed analysis later on.
Posted in DivX, Technology, Media, TV, VOD | No Comments »