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How Netflix’s Brand Strategy Is Destroying Its Streaming Service Dominance

Netflix is a great tech company whom curates some of the most prestigious streaming video content in the world, their customer service and user engagement is top notch, they hold arguably the loyalest subscriber base of any tech brand.

And according to NASDAQ, they are top 3 in market capitalization across the United States.

But all is not good for the tech Goliath. Here’s why…

Let’s say you’ve corned the market with your business in recent years, wouldn’t you feel like you can afford a little oversight? Perhaps overlook a bit of the brand, maybe pull back on the marketing push, because who the hell needs it when there is no competition in sight?

Well, this is not the climate of 2012 where Netflix was largely unmatched, powerful brands are moving into the direct-to-consumer streaming services market, and they aren’t looking to be in 2nd place.

Unfortunately, Netflix is so hyper-focused on producing content in reaction, they’ve backed off any serious development and deployment of any brand or branding strategy…

They’re betting on product-based marketing.

So you will not see a brand awareness or marketing campaign from Netflix outside of showing ads associated with one of their shows. And if they’re wagering this strategy will hold their position at the top, I doubt it will keep in the top 5 within the next 5 years unless they diversify.

Native content and exclusivity are crucial to keep the subscribers satisfied and engaged with your brand, but its a lazy oversight to not also have a campaign outside of your organization geared toward client acquisition.

At this rate, Netflix has high probability of forfeiting its market share to media brands who understand the power of brand and marketing outside of its existing subscriber base, which is why they did not meet their projected numbers of sign ups from new subscribers.

And should Netflix implode on itself or get destroyed by the competition, it will be due to them not executing a well developed brand strategy.

Netflix Has a Blockbuster Problem

We all agree that Netflix started out as a very smart business in the 2000’s, to go from a DVD Distributor to an online video rental service was an amazing feat.

And despite their $50 million dollar acquisition offer to Blockbuster Video being turned down at the time.

Netflix was still able to forge a new disruptive online streaming service with a subscription-based business model that left everyone thinking “Damn! Why didn’t i think of that?!”

They’ve managed to develop highly intuitive interfaces, rich user experiences, and original content for its subscribers, which made even fortune 500 brands license their brands over to Netflix.

Netlfix streaming video of Disney, Warner Bros Media, and Marvel content

But, Netflix has a “blockbuster” problem (pun intended) which may not play out to its conclusion for the next several years, new brokers are entering into the neighborhood.

And the Netflix brand will become unsustainable if the company continues to run on the steam of a two-decade old “good idea.”

Netflix toppled Blockbuster by just becoming a better content broker than Blockbuster, it was fresher, more convenient, and instinctual to the user…

They are going to have to compete for “top of mind” brand positioning for the consumer with other tech titans, and the Netflix problem is not related to tech, nor is it a content issue… it is a brand problem.

  • What does the general public know about the Netflix brand other than the content?
  • Do you remember the last gripping Netflix advertisement you saw?
  • Do you want to visit the Netflix offices to see the magic behind the scenes?
  • Does the public have a perception of Netflix outside of the platform? Who’s the CEO?
  • What can you come to expect from Netflix as a brand?

Most people know Netflix as a SaaS (software as a service) platform that offers them content to choose from…

How is that any different than a vending machine named Netflix that delivers candy and beverages?

The reason that’s a fair analogy is you can take contents of a vending machine and just place it in another machine, and the consumer wont care as long as they get the candy.

So what will keep subscribers from leaving Netflix if the content candy is put on another platform? In my opinion, Netflix has not done much brand work to create uniqueness for a consumer to think twice before cancelling their subscription.

Netflix is not developing innovative brand strategies to sound off a unique value and vision to the average consumer as their streaming options continue to expand, then Netflix will become just another streaming app.

Netflix does not understand if content is King, then brand strategy and marketing is the military arm that must protect the sovereignty of the kingdom.

The Netflix Streaming Wars

Behemoth brands who truly understand the power of brand are entering into the direct-to-consumer streaming service industry, brands like…

…and pretty much every other media company looking to get in on the action… The Streaming Wars are underway.

Streaming Service competition between disney plus, netflix, youtube, apple tv, and amazon fire

Netflix acts as if its red logo colors are on the side of Ferrari, zooming past spectators marveling at a spectacle.

But Netflix is no longer the only machine of its kind on the road, and their competitors don’t see the color-coated brand as a beautiful and powerful Ferrari… they see it as blood in crimson water.

The streaming companies who will beat Netflix are the brands who aren’t limiting their value to just the customer experience.

The experience of the customer is important, but it should not be the only target for a company.

Of course, any successful brand must continuously nurture the relationship with their subscriber base, but they should also prioritize customer acquisition and branding in order to make new connections, bring in new customers, and keep existing customer relationships fresh and exciting.

And the streaming brands who will win the war for the hearts and minds of the consumer are the ones who understand it must be won on multiple fronts at every available touch-point.

Disney Plus vs Netflix

As the streaming market continues to fill up with charismatic combatants like Disney (1923) or Paramount (1912) whom have developed a century’s worth of equity and proprietary content.

Netflix’s rush to build momentum with a content library and equity to compete may see Netflix lose its dominance in the streaming wars, because they are not preemptively looking at all the multiple fronts their competitors are bringing to the battlefield.

Walt Disney started out with a disruptive big idea in the early 1900’s, just like Netflix did in the early 2000’s.

Disney not only helped roll out animation as a profitable form of entertainment, but he utilized color and sound in ways that had never been done before. And went on to create arguably the biggest content provider in modern history.

And The Walt Disney Company didn’t just rest on its laurels by just producing cartoon shorts and animated feature films.

Walt always integrated salesmanship as an entrepreneur and as a media company, they built a strong production house to produce high level content, but Walt nor the Walt Disney Company never stopped selling and expanding the brand.

So it was by no accident that every successor of Walt uphold the same kind of salesmanship he did, because those corporate values allowed Disney to stand the test of time, and Disney Plus is another representation of that.

Sales was a feather in Walt Disney’s cap, but he didn’t focus on selling the product or the content, he mainly focused on selling the experience, energy, and value of the Brand that the products and services delivered to the customer.

Although Disney Plus is being treated as another content distributor in Disney’s family of products and services.

It will have binary function, expect for Disney to use it as another marketing channel or platform to enhance the awareness for other ancillary products, events, attractions, IP’s, and services.

If Netflix wants that kind of staying power, they are going to need to treat the brand sales side of their business, just as serious as their customer retention strategies.

Netflix And Chill

The most glaring indication that Netflix wasn’t brand-focused was after observing their handling of “Netflix and Chill.” This phrase became deeply entrenched within online/western culture, and it perfectly narrated a visceral experience of how the average Netflix subscriber engaged with the brand.

It was one of the most popular phrases on social media, and it even was added to Wikipedia and the dictionary.

Oddly, Netflix did not grab the phrase and use it’s social currency in their favor. They missed an opportunity to build massive brand equity.

Why didn’t Netflix have enough wherewithal to capitalize on the social currency generated by its own customers? Well, they tried twice, sort of…

On twitter Netflix tweeted a meme from the 90’s movie clueless to let its users know they were hip to the phrase.

Netflix and Chill twitter and social media post

And one year later in 2016, Netflix released the “movie night” short film video ad centered around the popularity of “Netflix and Chill.”

Unfortunately, it didn’t have much resonance, as it tried to use high school kids who seemed to be using Netflix as a buffer for sexual relations, which missed the mark.

Yes “Netflix and Chill” has always had the sexual undertones, but we can argue that “Nike’s Just Do It” also has carnal connotations, but its lazy to go there.

Netflix should’ve grabbed that phrase directly, or repurposed it, to create a myriad of micro-stories representing the “Netflix and Chill” narrative.

One long form video ad cant be expected to tell all the stories and angles to the value of Netflix.

Netflix Is Chilling On Building Any Brand Equity

Customer engagement and participation shows a company what they value most in your brand which you can then covert into brand equity opportunities.

And that feedback from the “Netflix and Chill” narrative, among other metrics, should’ve been crystallized like lightning in a bottle, developed into a new strategy for the brand, and poured into the entire ecosystem of the brand to market to like-minded prospects to bring in new subscribers.

The benefit of social media for a business is it allows a business to be interactive like a real-time focus group, and the brand can measure the ebbs and flows of customer interests.

Netflix doesn’t seem to be interested in building any kind of brand equity.

They seem to be more accepting of the “word of mouth marketing.”

To my knowledge, Netflix does not produce any ads, stories, programs, products, or campaigns in order to build brand equity outside of its content… and that’s a damn shame.

Netflix needs to bring in brand consultants and strategy experts to help them craft more universal quips that will assist them in developing a brand people can connect with outside of its content.

Netflix’s Race for Content

Overall, Netflix’s brand strategy seems to be alarmingly minimal, while they are spending an enormous amount of resources on content creation and strategy.

They intend to use original content and licensing content of documentaries, movies, and original shows as a gateway into their productized service.

Products and services are not the brand, so making cool interfaces, algorithms, content, and everything related to product is integral in user experience and shaping the brand, but it is not the brand.

And their brand is experiencing a noticeable slowdown.

Netflix has decided to burning through billions of dollars to quickly fill the void of content being pulled from major studios who are creating rival direct-to-consumer streaming services. And their brand is taking a hit.

And in their race for content production, their cumulative returns are dropping considerably, and it seems to be Netflix racing to create the content in a short window is a bet they likely won’t win.

Netflix and Disney Plus cumulative returns

According to Alexia Quadrani, JP Morgan’s Managing Director of Finance, Disney is ending its licensing agreements with Netflix and pulling their content because it feels Disney+ can beat Netflix in the direct-to-consumer streaming market by amassing 160 million subscribers within the next 2-3 years.

Though Netflix was first to market with the idea, it put added pressure on the streaming service to continually evolve and expand its reach to stay relevant as fresher options into the market landscape.

Netflix The Content Broker

Netflix holding the top position at the moment, does not mean it will not be overtaken by those brands who were late to the party, because its looking like the approaching giants such as Disney Plus, AT&T, and AppleTV+ will be fashionably late.

We know a lot of the creative writing and clever ideas are on streaming tv shows, and we know Netflix can create great content in-house.

However, the brand recognition that comes with the content should be of concern to Netflix… you can have an outlier like “Stranger Things” which has gotten the word out strictly based on how good the show is, and even “Roma” won an academy award for best picture…

stranger things on netflix

So we know Netflix has quality content, writing, and creativity, and they can essentially license content from any creator or company, but so can AppleTV+, who has the same license to broker those kinds of deals…

So if they want to remain content focused then they will still need rely heavily on brand strategy and marketing to craft a unique perception, story, and value offering that no other streaming service can manage.

And if you were negotiating a licensing deal between Netflix and Apple, wouldn’t you choose the solution whos reach extended beyond one platform? That would be the smart move, and given that criteria, you’d choose Apple over Netflix…

Same reason why combat sports switched from a cable channel to media networks, why it moved from the HBO and Showtime PPV model to the FOX and ESPN (Disney)… more exposure and bigger network for promotion.

Netflix Generic Branding

If we take a look at the Netflix Instagram page it is another example of the brand being sacrificed for product focused awareness instead of connecting brand awareness with the products being shown, see my example below…

Netflix generic brand strategy and instagram branding

The far left image is the genuine Netflix Instagram page, the middle image I replaced the logo and header with the GAP Brand Logo, and the far right is the Foot Locker Logo and description.

You can see each of these brands fits the content created by Netflix, which is problematic because the branding is not particularly unique and is so generic it is interchangeable with completely different brands.

As a brand you want the consumer to always see the product as synonymous with the brand.

In fact, the brand is so regressed if you have one look at their Instagram page, you can literally insert any brand, celebrity, or company in its place because its extremely generic.

Netflix Treats Content Better Than It’s Brand

According to Chief Content Officer of Netflix, the company told its investors they will focus on the content creation  over its brand. Apparently, Netflix conducted studies which showed it is the best course of action, so they are spending tens of billions on creating original content to compete and embracing direct-to-streaming video deals such as “The Umbrella Academy.”

Bad idea. Right now Netflix still has the brand of a broker who is licensing content and is in a rush to develop shows to take the place of its brand, and that business strategy can be easily replicated with anyone with enough capital.

What you can’t easily copy? Brand equity.

Close to zero brand marketing is being produced by for Netflix to control and build their brand equity…

And after reviewing the Netflix executive team there is a noticeable absence of a Chief Brand Officer or Chief Strategy Officer, they will need someone in place to help them significantly re-strategize their brand strategy in order to find an niche or sector they can dominate…

As history has proven, a company will not survive just simply holding the latest tech invention or populating the dashboard with original content, because someone else will learn from your success and produce a better version of it than you.

The rivals of Netflix are moving their pieces on the chessboard to position themselves as the prestigious “A-list online movie library.”

And if Netflix doesn’t begin the campaign to parry those moves, they could inadvertently plunge into the equivalency of a dark basement with dangling light bulbs filled “B-Movies” you watch because you’re bored.

Or worse yet, if they ironically became like Blockbuster, the very company they put out of business so many years ago due to their lack of foresight.

No Netflix Ecosystem?

In 2016 AdAge awarded Netflix “Marketer Of The Year” for its content, obviously it has done an excellent job in producing and showcasing original content, its just not enough to keep its dominance.

Given the track record of Disney and Apple, we can bet on them producing equal or superior content, but they will also position their streaming services as extensions to ancillary products and services.

In other words, they will create an atmosphere that will make you feel like you should live and breathe their brands.

Case in point, Disney+ will use the direct-to-streaming shows as an extension to the Avenger’s Marvel Cinematic Universe in order to continue the journey with the characters.

You can follow the characters through innumerable touch-points such as apps, movies, social networks, videos, comics, books, games, park attractions, animations, toys, etc.

What’s Netflix’s answer to the digital ecosystem that these other brands will create?

How else can Netflix subscriber follow the IP Content other than on the platform? What ancillary products or services can Netflix develop to further engage customers?

Netflix capitalized on the internet early on, but they do have not grasped the concept of inter-connectivity popularized by it.

One of the reasons why people are so interested in Marvel movies is because of the connected universe concept is what intrigues users, not only in entertainment, but in the value offerings of a business.

Ask yourself Netflix, if someone purchases the services, what other value and monetization opportunities can you uncover to enrich the original purchase and to keep users engaged…and i don’t think its just simply more movies and shows.

Netflix should start thinking more like the media company it is.

The Netflix Solution

The solution to Netflix’s blockbuster problem will not be found in brokering content, it will be solved by engineering a new brand strategy and developing a digital ecosystem surrounding their strengths.

You can’t just rely on the “good idea” you have to expand it into a brand ecosystem…

Subscribers are more likely to cancel memberships to one inexpensive solution and pay higher prices for a more engaging one.

Netflix needs develop a strategy around symbiotic solutions to connect it’s consumers in more engaging and creative ways, and I hope the content creation race is only a short term strategy to build their arsenal in order to be better prepared for the streaming wars.

So what do you think of the Netflix strategy? Share your opinions in the comments below.

Drew Lewis

Drew Lewis

Drew is a brand engineer, creative entrepreneur, digital marketer, and designer.

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