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Video Game Marketing

Indie Game Marketing from the author of the Game Marketing book, The Indie Developer's Guide to Selling Games. Video Game Marketing made simple... or at least as simple as I can make it.

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Monday, October 23, 2006

NetFlix, Communism, and You

Sorry for the delay in posts, I will explain what went on lately another day.

Today's post has little to do with marketing beyond understanding spin. It's more a clever observation brought on by a very auspicious ad.

Karl Marx basically said that Democracy is the first step to Communism. At least I think it was him... someone important wrote it... I digress.

In the video rental world we can actually see the microcosm of an advanced governing system. Allow me to illuminate:

When video rentals started it was not dominated by Blockbuster and the very idea of NetFlix would have had people laughing in your face. I will admit that Block Buster was a major player since the get-go; but for now lets just suspend that fact.

So early on many video rental stores were the only stores in town. They were local owned and operated. This is basically a democracy, each store's selection and availability based on personal knowledge and supply and demand. It offered some interesting benefits (and since I live in very small town with just ONE movie store where they literally rememebr your name, I can say this from experience) - the owners and workers could help you select good movies and special ordering movies is a breeze. The downside was selections were limited as well as having limited quantities available to rent. Yes, our democratic system worked, but it didn't last too long.

It wasn't long before major chains, lead by Block Buster, really kicked it up a notch. With improved selections and centralized corporate structure you gave up a certain level of personal service for improved quantities and selections, and sometimes even lower prices. Yes, this socialst form of half-central and half-local governing is pretty snazzy.

And now NetFlix is ready to overtake Block Buster. Doesn't anyone else find it not-surprising that NetFlix is nothing more than a centralized warehouse that literally dishes out pre-destined portions of what movies you CAN and CAN NOT watch? Sure, you make a list of the movies you want, but ultimately you're not even the one selecting them anymore. What if NetFlix decided nobody would rent the movie Shop Girl because it was so bad nobody should ever want to (it is, trust me, don't rent it.) They have the power to do that, we gave it to them.

NetFlix is a communism, with all the pros and cons of a communism. It isn't a good thing or a bad thing. I'm not a 1950s anti-soviet flier; I just find it really strange that such an advanced concept of governing can be so simply explained through the evolution of movie chains.

Democracy leads to communism. That's what some important guy said, and in this case he sure was right.

Oddly, NetFlix does have an outstanding track record; and comes reccomended from every single person I know who uses it. I'll stick to my local store for now though; they give out free popcorn with every rental- made in a real popcorn popper!

3 Comments:

Blogger Hanford Lemoore said...

Interesting take on it.

Netflix ends up feeling this way I think because users pay a monthly fee, even if you they don't use it at all. This can conjure up feelings of exclusivity, like I'm now "stuck" with Netflix.

However, even with a Netflix subscription, I still have a Blockbuster card, which costs me nothing when not using it, and I can still use it when I want to (in fact, I use it more than Netflix these days). I can also buy movies I really want from any number of places, and I can still choose to see a movie in a movie theater. There it Pay-per-view, and Premium Cable channels as well. All these services compete with each other.

So, there's still lots of options that are open to me, even though I have a Netflix account. And, when Netflix fails me (which is does in the I-want-it-now department) I use those other options.

Democracy tests and improves weak points in the system ... Netflix is dominating Blockbuster by exploiting their weaknesses, but and whoever rises up to challenge Netflix will undoubtedly be exploiting Netflix's own weaknesses.

Hanford
http://www.monolux.com
http://blog.hanfordlemoore.com

1:20 PM  
Anonymous Austin said...

As you say in the 80's it was the mom and pop stores.

In the 90's blockbuster came to dominate. Part of which is because they formed exclusive partnerships w/ hollywood movie producers. This occured in the mid to late 90's btw

So in effect they made it where the mom and pop stores simply could not get the movies. (I was told this by a mom and pop owner from Louisiana)

Of course netflix came along and really threw blockbuster for a spin.

http://finance.yahoo.com/charts#chart3:symbol=bbi;range=5y;indicator=volume;charttype=line;crosshair=on;logscale=on;source=

and movie gallery
http://finance.yahoo.com/charts#chart1:symbol=movi;range=5y;indicator=volume;charttype=line;crosshair=on;logscale=on;source=

So now blockbuster is in a bad position of owning TONS of stores which it is dependent upon for revenue, yet the future is internet downloads.

So what do you do? abandon your revenue base and try to fight the much more experienced netflix on its own turf? OR keep your stores and open your own internet downloads and canabalize your store sales.

And whos to say Apple or the movie studios do not just offer the downloads?

Its nasty either way you go.

If you want a really good laugh look at next years growth estimates of blockbuster.
http://finance.yahoo.com/q/ae?s=BBI

NINE HUNDRED PERCENT

yea.. thats right. 900% growth next year. So they are saying business is going to go up 9x times.

ha
ha ha
ROFL!!!

5:14 PM  
Anonymous Angry Sicilian said...

I had netflix.. tossed it after they started 'regulating' how frequently they sent me movies on my one at a time, unlimited plan.

I have enough movies laying around for now, but next time I sign up, I'm going to do Blockbuster's by-mail. Its convenient because you get in-store rentals as well -- No Wait.

12:46 PM  

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