August 31, 2015

Netflix and Merchandise Forensics

You pay attention to stuff happening in other industries ... stuff that matters to you ... right?

Like Netflix losing movies like The Hunger Games? (click here).

There is a difference between giving your customers "The Hunger Games" and creating your own series for viewing on Netflix. It's akin to Nordstrom creating their own products, or selling Coach. Your own products are riskier, but if they work, they are much more profitable.

The quote about "exclusive to Netflix" is really key. There has to be merchandise that locks the customer in to Netflix, or eventually, Netflix becomes Blockbuster, right?

And you read the stuff about TV ratings falling because viewers are watching TV reruns on Netflix. That's another interesting merchandise dynamic ... Netflix doesn't control the merchandise there, either.

In television, it's called a "Golden Age" due to quality. There are likely to be over 400 new series introduced in the Fall 2015 - Spring 2016 season. New ones. New merchandise, if you will.

Every client I work with who is succeeding does so via knowing the right mix of new and existing merchandise. On average (there are exceptions - continuity programs come to mind), these businesses over-value the importance of new items, and are rewarded for their short-term investments with long-term success.