Published on: November 21, 2011by Kevin Coupe
It is a case of understanding that if you want to attract new customers, keep existing customers, or - in this case, perhaps most importantly - bring back old customers, sometimes what you have to do is provide a product that nobody else has.
Netflix - which has been losing customers of late because of a price increase as well as what can fairly be called a ham-fisted attempt to separate its DVD rental and online streaming businesses (which it subsequently had to abandon) - announced over the weekend that it has signed an exclusive deal to air new episodes of the cult comedy series, “Arrested Development.”
According to the announcement, new episodes will be available only to Netflix streaming subscribers in the U.S. in 2013.
“Arrested Development” ran on Fox from 2003-2006, and since its cancellation has been the subject of persistent rumors that it could come back to television or find new life as a motion picture.
This is Netflix’s second bet on an exclusive TV series as a way of giving itself a differential advantage; “House of Cards,” starring Kevin Spacey, has been announced but not yet made available to subscribers.
This is an important lesson that needs to be absorbed beyond the TV and video rental business.
Netflix knows that to grow and survive in an increasingly diverse and competitive business environment, it cannot just be a distributor of other people’s product. It needs to create its own proprietary products and services - in essence, private label.
I’ve said it before and I’ll say it again: Everybody is looking for an edge, everybody is looking for a differential advantage, everybody is looking for that disruptive product or service, everybody is looking to rewrite thew rules in their favor, and everybody is potential competition. In video. In supermarkets. In virtually every kind of retail marketing. And if there are companies out there that are not looking to do these things ... well, the odds are pretty good that in the long run, these companies are going to be the victims of the companies that do.
They’d better have their Eyes Open.
- KC's View: