Should Netflix own proprietary content?
Tiffany does. HBO does.
Jewelry designer Paloma Picasso designs exclusive pieces for Tiffany. It gives consumers a reason to come to Tiffany and only to Tiffany to buy designer jewelry by Paloma Picasso, Elsa Peretti and others.
Roger McNamee writes: “If you are a content owner, proliferating distribution offers lots of opportunity for incremental profits. The key is to behave like a consumer packaged goods company: give customers what they want, when they want it, at a price they are willing to pay. In most cases that means more, rather than fewer distribution channels. As a result, the best strategies for optimizing the value of content conflict with the best strategies for distribution. If they cannot deal with this, the major media companies will continue to produce suboptimal results.”
True, but not if you own the distribution channel. If you are Tiffany, you need to merchandise exclusive items, which would bring consumers to your store.
If you are Netflix, therefore, competing with Blockbuster and Amazon with a “commodity plumbing” positioning will become increasingly tougher. Amongst other brand differentiation strategies, Netflix needs to consider a carefully thought through Content strategy.
KQED Radio is perhaps one of the best proprietary content strategy I have seen. Sharply segmented to cater to a Thoughtful Intellectual segment, it also nicely aligns with a relatively higher income demographic, which allows it to be funded by listeners.
Netflix needs to learn a few branding tricks soon, so that it can position itself out of the shackles of its Geeky origins, and begin to do justice to its Hollywood style audience.
[…] Finally, it is not clear to me why Netflix should not become a “studio” and produce prop…. It has the audience and the distribution relationships. It could very easily diversify out of this low-margin logistics business model, and become a real player in the Online Film segment. […]