DouDou Blog

Netflix vs. Blockbuster can be a classic business case study in modern business history. As indicated by Molly Sloan, “But another key piece of the puzzle was Blockbuster’s unwillingness to put their customers first. The company’s revenue relied (massively) on charging late fees.“

Worse, Blockbuster ignored the pain point of customers by charging late fees for a big profit. As indicated in the article, “Blockbuster’s profit had to be sufficient to sustain their worldwide stores and staffing levels. As well as their pricing structure reflecting this, their profit also relied on something their customers hated – late fees.
A significant portion of the revenue that Blockbuster needed to stay in business was a revenue stream that Netflix didn’t even charge for, as you could keep their movies as long as you wanted.
Whereas Netflix developed a business model that simplified the video-renting process, making it more enjoyable for customers, Blockbuster only thought about maximizing their returns.“

Some marketing theories can be traced down from long ago, such as “Customer is the king,” or “Market orientation,” or even “Customer experience” lately, the timeless principle of marketing is “Always focus on customers’ needs and wants” and that principle has never changed. Many too often, the obvious fact is too easy to get oblivious.

And recently, Netflix is ready for shifting to another field as indicated by Ben Thompson, “That product is advertising.” For eCommerce sellers, this can be a great news. The advertising costs on Amazon, Facebook and Google are getting higher and higher, which takes up a big chunk of the hard earned profit. More importantly, the audience on the said platforms has got annoyed for ubiquitous selling ads and the privacy related policies are making advertising more and more inefficient, especially for both Facebook and Google.

Netflix advertising can be the next big platform for business to reach their customers or leads. And we have every reason to believe that the way to advertise on Netflix can be as dramatic as the advertisement shown in the cinema. It must be in a video form and full of entertaining contents to get people’s attention. In turn, the already booming video ads industry will reach another high in the near future.