netflix launch

3 Inbound Marketing Lessons from the Netflix Australian Launch

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Jay Dillon

Director of Strategy and Creative at Inbound Experts
Jay is a digital marketer and producer whose creative and technical skills have developed digital brand strategies and sales campaigns using a range of complex internet applications from stand-alone websites through to Facebook API integrations.
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Frank Underwood, Marco Polo and Matt Murdock are heading down under.

Netflix is expanding to Australia: the service will launch on March 24 on a variety of devices, from smart TVs by brands like Samsung, Sony and LG to Xbox and Playstation game consoles.

While competitors of Netflix like Presto and Quickflix are undoubtedly concerned about losing market share, for Aussie fans of television and movies this news is overwhelmingly positive.

As cinephiles are getting ready for binge sessions of their favourite films, inbound marketers should be paying more attention to Netflix’s business model. In fact, there are plenty of things that you can learn about marketing from examining Netflix and the way that it has shifted its strategy over time to meet the demands of a developing market. After all, you don’t bring in over $1.1 billion in revenue from over 57 million customers worldwide without doing a few things right!

As the hugely popular video service gets ready to debut in Australia, let’s take a look at three of the biggest lessons that inbound marketers can learn from the success of Netflix.

 

Give People What They Want

You might not know that Netflix didn’t start out as the streaming media giant that it is today. In fact, when it launched back in 1997, Netflix had a completely different business model: the company was focused on providing DVD rentals by mail. At that time, DVDs were a recent invention: movies on this new medium provided excellent video and sound quality, making them popular with all types of viewers and tech enthusiasts.

Towards the end of the 2000s, however, things were changing. With the release of the new Blu-ray disc medium and the increasing shift towards video on-demand, DVD sales were slowing: reports showed that from 2010 to 2011, DVD sales in the United States alone had plunged by over 20%.

Netflix, seeing the writing on the wall, rolled out its streaming service in 2007. The rest is history: the company struck gold with its bet on video streaming. In recent years, major cable companies have suffered huge blows. Subscriber levels are at all-time lows, while streaming services enjoy more success than ever before.

The lesson for inbound marketers? Understand what your customers want, and give it to them. Just like Netflix saw that people were becoming less interested in DVDs and more interested in video streaming, you need to do your best to anticipate the shifts in your industry and focus your marketing efforts on meeting the new requirements of your customers by solving their current pain points.

Become a Content Creator, not Just a Curator

Netflix enjoyed some great early success as a service that curated the most popular films and television shows available, but the company quickly realised that this model alone was not sustainable. Broadcast networks and film studios were getting wise to the success of Netflix, and in an attempt to cash in on the growing trend of streaming media they started raising their prices. In the first quarter of 2013 alone, Netflix paid over $1.35 billion in licensing costs.

At the same time, Netflix started to see more and more competitors coming out of the woodwork, including HBO GO and Amazon Prime, two video streaming services that to this day are significant competitors for the service. With competition and supplier prices both increasing, Netflix decided to focus on creating unique content that no one else could offer. Even though the organisation had limited experience planning and producing TV shows, they understood that by providing original, exclusive content to their audience using their existing distribution channels, Netflix could cement its place in the market.

They were right: today, shows like House of Cards, Lilyhammer, and Orange is the New Black are among the most popular on the service. For inbound marketers, the lesson is a clear one: if you want to differentiate yourself and stand out in the increasingly-crowded world of marketing, you must create your own valuable content, not just curate works from others.

Partner With the Best

Netflix knew that they had a disadvantage when they entered the content creation field: there was no way that their in-house production team could compete with stalwarts in the industry like HBO and Time Warner.

To compensate for this lack of experience, they brought in some of the biggest names in the industry to help them with their content creation. Take House of Cards, one of the first shows that Netflix ever produced. To help them ensure that the show would be a success, Netflix brought in the Academy Award-winning actor Kevin Spacey and highly respected director and producer David Fincher, who worked on films like Fight Club and Seven.

Fincher and his team scored a smashing victory for Netflix with House of Cards: after only two seasons, the show has received 22 nominations and 4 Emmy Award wins for outstanding television. The success of House of Cards is a perfect example of why you should work with the people who are most qualified for the job, whether you are outsourcing your blog content or looking for a social media consultant.

Only time will tell how well Netflix does in Australia, but for inbound marketers, there is much to be gleaned about online marketing from the way the company has navigated the obstacles that it has faced in its nearly two decades of existence.

 

 

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