Thanks for an interesting question. Netflix success has been, in my
opinion, driven by one primary thing: people hate returning videos.
I once saw a comedian who had a routine about returning videos. The
line was a friend was going to the store and his buddy asked him to
return a video for him. His response? "I would rather help you move".
There have been several marketing schemes that have driven Netflix
success. Below I have provided some quotes as well as the links to
information about their various marketing ideas:
"Marketing was key in the early adoption and success of Netflix. By
getting the word out through major portals, Yahoo, MSN, and AOL, and
through its relationship with BestBuy, consumers were deluged with
information about the Netflix service"
"Free trials addressed the skeptics of a radically new service, and
resulted in high conversion rates to continuing customers. The
recurring transaction model helped consumers adopt the discipline of
selecting films each week but without pressure."
NETFLIX Free Resources
"Both Netflix and Lowestfare.com will take advantage of Be Free's
BFAST affiliate marketing technology platform and Outsourced Program
Management (OPM) service. Used by many of the largest merchants on the
web, OPM is a full-service option where online merchants can rely on
Be Free's expertise to help optimize the management of their affiliate
Affiliate Marketers Netflix and Lowestfare.com Select ValueClick's Be
Word of Mouth
""We have benefited enormously from the rapid growth in word of mouth
(publicity) ... It has taken us to (SAC) levels that we thought we
would not soon see," said Chief Financial Officer Barry McCarthy."
Netflix reports first quarterly net profit
"- some 40 percent of signups come from word of mouth, said a Netflix
"The alliances with Best Buy were critical to launching their portal,
as new DVD users were the most likely consumers to try a new rental
"Theatres became a preferred method of advertising the Netflix
service, and added revenue to a film from avid movie patrons, rather
than cannibalizing ticket sales."
Netflix Analyzed via the Value Framework
"The Company markets its service to consumers primarily through
pay-for-performance marketing programs, including online promotions,
advertising insertions with most leading DVD player manufacturers and
promotions with electronics and video software retailers. These
programs encourage consumers to subscribe to the Company's service and
include a free trial period of typically 14 days. At the end of the
trial period, subscribers are automatically enrolled as paying
subscribers, unless they cancel their subscription. Approximately 90%
of trial subscribers become paying subscribers. All paying subscribers
are billed monthly in advance by credit card. The Company stocks
almost every title available on DVD, excluding mature and adult
NetFlix.com, Inc. (NFLX)
"One of the easiest methods to accomplish this is through the Affinity
Marketing programs provided by Leader Technologies. Leader has
established independent relationships with multiple service providers.
These include...DVD movie rentals from Netflix..."
Each affinity partner pays a fee or "bounty" to the manufacturer based
on certain criteria such as receiving free issues of magazines or
signing up for a trial subscription to a service. Bounty fees are
collected from the affinity partner on behalf of the manufacturer and
credited each month to the manufacturer's account. For this printer
manufacturer, on average, more than $72,000.00 in bounty fees are
generated each year that are used to defray costs of the registration
Affinity Marketing Programs Significantly Lowers Cost to Collect
"Best Buy Co., Inc. (NYSE: BBY), the nation's number one specialty
retailer of consumer electronics, personal computers, entertainment
software and appliances, and Netflix (Netflix.com), the largest online
DVD rental source, today announced a strategic marketing alliance
designed to make the purchase and rental of DVD movies easy and
accessible to consumers nationwide. As part of the agreement, Best Buy
and Netflix have launched a co-branded DVD rental service that is
accessible through BestBuy.com, SamGoody.com, MediaPlay.com, OnCue.com
Best Buy and Netflix Offer Co-Branded Online DVD Movie Rental Service
Thanks again for your question and I hope the above information is
helpful. If you need any additional clarification, please let me know.
netflix marketing costs
netflix marketing program