There was a time, not long ago, that uttering the phrase “I don’t own a TV,” meant you didn’t watch television shows. You found more productive things to do with your life instead of watching Breaking Bad or Arrested Development, like reading, or hanging out with friends, or listening to NPR (but seriously, why wouldn’t you watch Breaking Bad? It was so good).
But in today’s world, not owning a TV simply means you don’t have cable – thanks to Netflix, you can still watch thousands of hours of TV shows right on your desktop or laptop computer. And based on the popularity of Netflix’s streaming service, we know that many people have now chosen to “cut the cord” with cable and watch Netflix instead. The company boasts nearly 60 million subscribers worldwide, and that number has been continually on the rise for years.
So what does the popularity of Netflix teach us about the modern consumer? Here are three of the most important lessons:
Put your product at the price level you think it deserves
Netflix sparked an enormous backlash in 2011 when it revamped its product offerings and price levels. Seeing that its DVD service was going to take a backseat to streaming in the future, Netflix decided to offer a streaming-only service, and increased the price of its streaming+DVD service. Customers were outraged. Thousands canceled their subscriptions, the stock price plummeted and the backlash even inspired a Saturday Night Live parody.
Well, Netflix may have jumped the gun a bit with their decision, but it appears to have paid off. Subscriber numbers rebounded and have continued to rise ever since, and the stock price hit a record high last year (it remains in the ballpark of that number today).
So what does this example teach us? Don’t undercut the prices of your products/services. If your product is worth it, then people will pay what you ask; but if you suddenly raise prices, you should expect a fair amount of blowback.
Online is where the money is
Another gamble Netflix took when it announced that 2011 price increase is to bet on its streaming service to become the linchpin of its product offerings. And it appears to have been a good bet: currently, only 6 million people still opt for Netflix’ mail service, while more than 50 million subscribers rely on streaming.
It’s yet another example of how the internet is no longer the future; it’s the present. Americans continue to flock to the web to fulfill all of their needs, from shopping, to bill paying and now entertainment. If there’s a way for you to use the internet for your products/services, the time has come to embrace it. And this online reliance is all the more reason to embrace inbound marketing as well. Don’t fear the internet; utilize it.
Content will always be king
Regardless of all the smart things Netflix has done, we probably wouldn’t be talking about it if not for the excellent content it provides. Not only does Netflix allow you to watch many of the highly-rated and critically acclaimed television shows of the past and present, it also invested in providing its own original, exclusive shows. House of Cards and Orange is the New Black have been massive hits for Netflix, and the shows have combined to win 7 Emmy Awards. There are also various other shows produced by Netflix, as well as several that are in development.
This is a great reminder that content is one of the most powerful draws in today’s world. It makes sense for Netflix to invest in this, as a content provider, but it’s a good lesson for marketers, too. Investing the time and resources to provide excellent, valuable content will pay major dividends for you and your company. No matter how slick or clever your marketing methods are, you still have to rely on content to bring people in.