Brandable Magazine’s Brand Audit

Case Study: A close look at Netflix

Abstract

Netflix became a household name relatively quickly. What started off as a mail-order DVD service is now one of America’s premier streaming services. This is a reflective case study about how Netflix became an outstanding brand.

Introduction

The question is simple enough. Netflix is one of America’s most recognizable brands, considering they’ve only been around for less than 20 years. Questions that relate to how Netflix became an outstanding brand might include how they got started, when they made the decision to start offering streaming services, and why people are so quick to turn to Netflix when it comes to a home streaming service. I attempt to answer these questions to uncover the answer to the original question of how Netflix became an outstanding brand.

Methodology: How I Went about Finding the Answers

My method was relatively simple. Using search engine results from various search terms on Google, I searched for articles that could potentially answer these questions. After reading through a dozen or so articles, I came upon six which I decided could best respond to the question. I tried to use the most authoritative articles freely available to the public. The six websites I chose were from Media Buzz, Adweek, Dicks + Nanton Celebrity Branding Agency, First Round Review, iMedia Connection, and a LinkedIn Slideshare presentation covering a brand analysis of Netflix.

Findings

One of the first things I found that made Netflix an outstanding brand, at least in the early years, is price. In a 2008 article written by Media Buzz, a critical question was asked in regards to Hollywood allowing Netflix to stream their digital content. They asked, “Would you pay $4 to stream a film when you can watch as many as you want for $8.99 a month on DVD?” [1]
Adweek quotes the Nielsen charts from New York Times saying,

36 percent of U.S. households subscribe to Netflix (more than 40 million U.S. subscribers in all), with Amazon Prime (13 percent) and Hulu Plus, now known simply as Hulu (6.5 percent), lagging behind.” [2]

This puts Netflix in the lead with over 2.5 times the customers of Amazon Prime.

Netflix used to be bigger than it currently is. Netflix had the right idea when they introduced streaming services to their services lineup. At the time, they only had the DVD mailing service. In 2011, they decided to split the two services: one digital content streaming service, and one DVD mail-in service. Between July and September of that year, Netflix lost over 800,000 accounts based on that move alone. The Dicks + Nanton Agency wrote an article about the loss calling it the power of perception [3]. While the business decision might’ve made sense internally, it didn’t make sense to its customers. Not surprisingly, Netflix is quoted as later reversing the decision.

Netflix didn’t go from where they were to where they are now by accident. The First Round Review is cited as saying Netflix used three distinct tools to create the brand [4]. The first one is the Positioning Model, which gets them to define the brand and who they are. The second one is the Branding Pyramid, which gets people to anchor the elements from the Positioning Model into the minds of the customers. The third one is the Concept Summary, where you take the elements of the first two tools and create a written summary so that you can convey these ideas directly to the customer.
In a brand analysis published on November 10, 2011, it was found that the majority of customer feedback for Netflix was still positive, they performed well against the competitors at the time, and supporters created a buzz about them on social media platforms [5]. The analysis found that the three areas that Netflix could improve on were price, prompt delivery, and communication with its customers.

Kyle Montero, a contributing editor for iMedia Connection, discusses Netflix’s fall from grace in 2011 and how it has in making a comeback ever since [6]. Much of the success is attributed to Kyle Bennett, the current CMO for Netflix. Bennett discussed in a summit how Netflix was a disruptor to how Hollywood’s digital media was traditionally delivered. He went on to attribute their success further by saying that Netflix lives, “at the intersection of technology and entertainment.” He ended his keynote by his discussing what Brand Love was and how Netflix is using it.

Conclusions

By taking these six authoritative articles, I found that Netflix markets their brand very carefully. They use social media along with digital innovation to create a method of delivering content from one place to the next. Before Netflix, Hollywood already had a huge following. Netflix in no way introduced Hollywood to the world. What they did was connect customer to content providers in a way that was previously impossible. They did it in an affordable and straightforward way – becoming America’s premier digital content provider. And increasingly, people are switching from traditional cable companies to Netflix.

References:
All content accessed on August 19, 2015.
[1] NetFlix: Building a Brand for the Future | Media Buzz
http://mediabuzz.monster.com/news/articles/596-netflix-building-a-brand-for-the-future?page=1
[2] Here’s Why Consumers Love Netflix More Than Amazon and Hulu | Adweek
http://www.adweek.com/news/television/here-s-why-consumers-love-netflix-more-amazon-and-hulu-165547
[3] Netflix and the Power of Perception | Dicks + Nanton Celebrity Branding Agency
http://www.celebritybrandingagency.com/blog/netflix-and-the-power-of-perception.php
[4] The Three Tools Netflix Used to Build Its World-Class Brand | First Round Review
http://firstround.com/review/the-three-tools-netflix-used-to-build-its-world-class-brand/
[5] Netflix: Brand Analysis | DePaul University – College of Communications via SlideShare
slides:http://www.slideshare.net/DePaulDigitalPR/netflix-brand-analysis
[6] Netflix’s formula for marketing success | Kyle Montero via iMedia Connection
http://blogs.imediaconnection.com/blog/2013/09/17/netflixs-formula-for-marketing-success/

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