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Kum Dana
In a bygone epoch of Blockbuster, the red-and-white envelopes that carried Netflix DVDs to homes around America were instantly recognizable. The company has shipped over 5.2 billion discs since its inception in 1998.
But now, after 25 years, Netflix has announced that the DVD-by-mail service will end on September 29, 2023. Executives cited decreasing interest as a vast majority of their users have moved to online streaming.
The announcement comes at a troubling time for the streaming service, which in recent years has been embroiled in controversies ranging from staff walkouts over content choices to changes to its password-sharing policy.
But even though recent troubles have exacerbated the need for Netflix to cut costs, the end of the DVD.com era was a long time coming. This year had been suggested as a sunset date for the program since as early as 2018, reported Michael Liedtke of the Associated Press (AP) last fall.
Who are the die-hard fans still paying for and using the DVD-by-mail service? Why do they do it? Some customers argue that the excitement of receiving their movies in the mail cannot be replicated digitally.
Konkle teaches film studies at Georgia Southern University, and she said that the DVD service helped her discover films that she went on to use in the classroom. Still, many fans of the service tell the AP that the quality of the discs and the number of selections available in recent years have plummeted. Titles, when available, were arriving late, scratched or both.
Hastings talked about Netflix's "niche" philosophy -- a Goldilocks-esque business plan of staying "not too big, not too small" -- in a panel discussion Tuesday at the Wired Business Conference in New York City.
"We've consistently said getting into current season [TV] or newer movies would not be profitable for us," Hastings said. "It would be an Armageddon. It would be World War III, and we likely wouldn't survive that battle."
Hastings acknowledged that his company doesn't expect to compete on sports and breaking news, which are suited to live broadcast. "[Netflix is] not every single thing all of you folks want to watch, but it's $8 a month," he said. "It's choosier content."
Still, it's clear that one of Netflix's top priorities is upgrading the quality and depth of the content it has available for instant streaming. On top of licensing its first original series -- "House of Cards," starring Kevin Spacey and due out in late 2012 -- Netflix has recently snapped up some choice reruns, including "Mad Men" and the first season of "Glee."
That's a costly and time-consuming process, but it's been in the game plan all along. Netflix (NFLX) attracted most of its giant subscriber base -- which now tops 22 million in the U.S. -- through its DVDs-by-mail rental service. But streaming has been the real goal ever since the company's inception in 1997, according to Hastings.
"We had set up the whole business essentially for streaming, but the network wasn't big enough years ago," he said. "But in 2005 we clicked on YouTube and watched cats on skateboards -- and we thought, it's here! Since then, we've had so much fun finally delivering on our name: Net. Flix."
In the past three months, Netflix's instant streaming service dropped 163 movies from its library while only adding 131 titles. Considering the size of Netflix's library (in the thousands, though Netflix doesn't specify how big it is), a drop of 32 movies over three months doesn't seem that steep. But for a service that is growing larger years after its inception and upping their rates, the fact that its losing titles at all feels counterintuitive.
In August of last year, Netflix let a deal with the cable network Epix expire that removed titles like The Hunger Games: Catching Fire and The Wolf of Wall Street. In a smart move for a service that isn't known for its film library, Hulu picked up the deal and quickly put those titles on their own service.
Yet as Variety noted at the time, it was smart to let the deal expire. The Epix movies were on Amazon Prime anyway, and Netflix wants more exclusive content. Each show or movie that can't be seen elsewhere makes the service all the more necessary.
None of these series or films will ever find their way to Amazon Prime or Hulu. By creating their own, Netflix essentially safeguards themselves against their competitors and continues to add value. Said value means Netflix can continue to charge more. For those loving Unbreakable Kimmy Schmidt: Can you live without it? Would you pay $15 a month for it? $20?
Of course, there are drawbacks that come with such an increase in price. Netflix has avoided landing on the most-pirated shows list in large part because its programming is accessible. Were they to limit access financially, illegal download numbers would likely grow.
Still, for now, Netflix is playing a smart game. The decreasing number of films available may irritate users, but every dollar spent on keeping acquisitions is money lost on making new material. Not surprisingly, the service is betting the sheer amount of original content makes up for it.
Branding is more than just a logo or a catchy slogan; it's the intangible tapestry that weaves together a product and its customers. Branding encompasses everything from customer satisfaction to emotional connection and even to the aspirations a brand embodies. It's a holistic package of values, personality, and storytelling aimed to build a unique relationship between a consumer and a product. Key elements include:
Netflix's brand message has always been clear and consistent, evolving naturally as the company grew. Founded in 1997 by Reed Hastings and Marc Randolph, the platform began as a DVD rental service. Randolph, intrigued by the potential of the internet, wanted to launch an online business. Hastings, frustrated with the unfair late fees charged by traditional video rental services, envisioned a more consumer-friendly model. This synergy led to the birth of Netflix.
Netflix's original logo was quite generic, featuring black text divided by a film reel. During the '90s, a decade teeming with brand competition, this logo failed to capture the company's ethos. It seemed like a derivative design that could easily get lost among other logos of that era.
As Millennials became a dominant consumer force, Netflix streamlined its logo yet again. It retained the iconic arch and the red backdrop but discarded the 3D effects for a cleaner, more digital-friendly look. The design maintained its emotional resonance while adapting to a generation accustomed to instant gratification and quick access to data.
Netflix's brand has matured alongside its rapidly expanding content library and technological advancements. The way we consume media has dramatically shifted since the company's inception, and so has our interaction with brands. Netflix understands this and continues to evolve without losing sight of its original values.
In a digital age where content is king, Netflix has managed to build a brand that goes beyond its user interface. It is a testament to the power of robust branding, continually refining itself to stay relevant, adaptable, and resonant with audiences worldwide.
Whether you're seeking to refine your brand's message, improve its positioning, or are in need of a visual refresh, understanding the principles behind successful brand evolution, as exemplified by Netflix, The Uptown Agency can guide you in bringing your brand to life.
Both a movie studio and entertainment platform, Netflix has nearly 140 million subscribers and is the dominant player in the streaming services industry. But few remember that at the height of the recession, it came close to flaming out.
Netflix made a name for itself in 1997 as pioneer of the DVD mail-order business, ultimately helping drive competitors like Blockbuster and Hollywood Video out of business. It was also a first mover in streaming video, taking a chance on its future success in a market now valued at over $22B and growing by leaps and bounds.
People liked the convenience of ordering DVDs by mail and streaming video at home. And with economical subscription bundles and no late fees, Netflix offered good value when consumers were more price conscious than ever. Between 2006 and 2011, its subscriber numbers ballooned 290%, from 6.3 million to 24.6 million.
In July 2011, the company pushed forward with an initiative that made sense in light of its aspirations as a streaming company. First, they announced that Netflix was splitting its plans into two parts: streaming video and DVD rentals.
Those who wanted both streaming and DVDs had to pay 60% more per month. Previously they'd been able to bundle both for just $2 more. Any other time, this might've gone through with mild grumbling. But this wasn't any time. This was a painful, protracted recession.
"Netflix members love watching instantly, but we've come to recognize there is still a very large continuing demand for DVDs by mail," said Andy Rendich, Netflix Chief Service and Operations Officer. "By better reflecting the underlying costs and offering our lowest prices ever for unlimited DVD, we hope to provide a great value to our current and future DVD-by-mail members."
But members weren't buying it. In fact, most saw it as a cash grab, especially since on paper Netflix looked so healthy. Few understood the immense expenditures that were being laid out to keep Netflix on the cutting edge of streaming, including $30M a year to allow Netflix streaming subscribers to access 2,500 movies, TV shows, and concerts from cable channel Starz.
Three months later, Netflix put out an announcement made the situation exponentially worse. The company was now was splitting into two parts. Again, this all made sense in light of Hastings' vision, but it didn't take into account the headaches it created for customers.
The DVD rental side was to be rebranded Qwikster, a name that was widely mocked and compared with Web 1.0 era startups that went belly up, such as Friendster, Napster, and Dogster. For many who were hoping the company would walk back the pricing decision, this was the last straw.
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