The idea may be sound, the execution is what killed it. Strategically, Netflix saw a changing business model and tried to get ahead of the curve. The customer wasn't ready to follow. It may have been the 60% price hike that ultimately done it in, but the idea was sound. At some point the DVD rental business will go away; just not today. And with such a negative attitude about Qwikster, the idea of selling it later to someone else lost its luster. The best thing you could do was simply kill it.
Coke also tried to stay ahead of tastes, seeing a need for their drink to be sweeter and more Pepsi-like. But the customer loyalty of the old brand mutinied when the brand changed too radically. Netflix customers did the exact same thing. And like New Coke, Qwikster is dead. Welcome to the dead brand club!
So was there any marketing lessons learned? 1. Perhaps for both Coke and Netflix, when things don't work, ask for a do-over. 2. The strategy may be sound, but so must be the execution. It is about the timing and sometimes pulling the bandage off too quick is not a good idea. 3. Responding in a timely matter is necessary. With Netflix, the response to the price increase alone should have been enough to reconsider announcing Qwikster. 4. Listen to the customer. Would the change be an improvement on how they used the brand? How does 2 separate services help the current Netflix customer to navigate, select, and use the service? It doesn't. 5. Doing nothing may be a possibility but doesn't move you or your brand forward. With every risk there is the possibility of failure. It is not the failure alone to worry about, but how one responds to it.
Tuesday, October 11, 2011
Content Distribution Windows Keep Shattering
Technological change has affected many industries. The iPod is noted for changing the music industry forever and cable has changed the face of TV syndication and the Movie Industry. The rise of multiple national cable networks means that the market to sell TV shows to multiple markets has gotten smaller; now shows are sold to one network like Comedy Central or TV Land for syndicated viewing. And along with cable on demand and streaming sites like Hulu, TV shows can be watched anytime not just outside prime time.
The movie industry has also seen its distribution windows drastically change. With DVD sales way down, distributors are seeking new revenue with premium pricing for same day as or even before theatrical release. Independent film companies have been pushing this plan. And now it is reaching the big budget film distributors. "Fallout in the exhibition industry continues over Universal Pictures’ controversial move to offer its upcoming Eddie Murphy-Ben Stiller comedy on premium video-on-demand just three weeks after it opens in theaters." Three weeks is hardly a window for theater owners and some are fighting back by not showing this film.
Will consumers pay a premium price to watch a first run film at home? It has not done well in past attempts. In addition consumers are seeing that the distribution windows have gotten much shorter. Where it once took a film more than a year to go from big screen to on demand, it now sometimes takes 3 months. And then shortly after it appears on a premium cable network like HBO or Starz. another 6 months and it lands on basic cable like fx or TNT. Consumers thirst for more seems to fill the pipeline with tons of films all passing through with lightening speed.
It is not just that the DVD has dies, it is that we as consumers are tired of the clutter of ownership. The iPod taught us that we can listen to what we want, when we want, where we want without filling up bookshelves with CDs. So too go the DVDs. How much the consumer will pay for the timeliness of the content is to be determined. Some may pay a premium price to watch in the home; most others will not. Theaters can't fight technological change, but they can make their experience a preferred one. Don't simply shut out the movie, but offer to make the experience a superior one.
The movie industry has also seen its distribution windows drastically change. With DVD sales way down, distributors are seeking new revenue with premium pricing for same day as or even before theatrical release. Independent film companies have been pushing this plan. And now it is reaching the big budget film distributors. "Fallout in the exhibition industry continues over Universal Pictures’ controversial move to offer its upcoming Eddie Murphy-Ben Stiller comedy on premium video-on-demand just three weeks after it opens in theaters." Three weeks is hardly a window for theater owners and some are fighting back by not showing this film.
Will consumers pay a premium price to watch a first run film at home? It has not done well in past attempts. In addition consumers are seeing that the distribution windows have gotten much shorter. Where it once took a film more than a year to go from big screen to on demand, it now sometimes takes 3 months. And then shortly after it appears on a premium cable network like HBO or Starz. another 6 months and it lands on basic cable like fx or TNT. Consumers thirst for more seems to fill the pipeline with tons of films all passing through with lightening speed.
It is not just that the DVD has dies, it is that we as consumers are tired of the clutter of ownership. The iPod taught us that we can listen to what we want, when we want, where we want without filling up bookshelves with CDs. So too go the DVDs. How much the consumer will pay for the timeliness of the content is to be determined. Some may pay a premium price to watch in the home; most others will not. Theaters can't fight technological change, but they can make their experience a preferred one. Don't simply shut out the movie, but offer to make the experience a superior one.
Monday, October 10, 2011
Kindle Believes Content Is King, B&N Retaliates Like A Spoiled Child
Amazon is taking the digital book wars to an exciting level. First it was price discounts on earlier models and now it is content exclusivity. Their latest exclusive content deal is with DC Entertainment, owner of graphic novels, a perfect complement to the e-reader. And a move that has riled its leading competitor Barnes and Noble.
But I am sad to hear that B&N has responded in a very childish way. "Comic book industry blog Bleeding Cool reports today that Barnes & Noble e-mailed all of its employees yesterday and told them to remove all print copies of the books included in that exclusive from their shelves." The only people that get hurt from this move are B&N customers who are in the store looking for these print issues and B&N reputation and bottom line. How does removing these issues help you compete with the Nook? Frankly, it doesn't. It sounds like a pouty child taking back his or her toys.
I am a huge fan of B&N and I understand their displeasure. But if they believe that content is king, like I do, then they should work harder to build their own exclusivity partnerships. DC Entertainment is not the only game in town. But B&N needs to work smarter to attract other partnerships and exclusivity deals. For every DC, there are Lucas, The Simpsons, and other graphic deals to make. And Archie is just announcing its own line of superhero comics. And think beyond the box to video and audio opportunities as well. To pull print copies off the shelf does not grow your digital business. The game is young and far from over.
But I am sad to hear that B&N has responded in a very childish way. "Comic book industry blog Bleeding Cool reports today that Barnes & Noble e-mailed all of its employees yesterday and told them to remove all print copies of the books included in that exclusive from their shelves." The only people that get hurt from this move are B&N customers who are in the store looking for these print issues and B&N reputation and bottom line. How does removing these issues help you compete with the Nook? Frankly, it doesn't. It sounds like a pouty child taking back his or her toys.
I am a huge fan of B&N and I understand their displeasure. But if they believe that content is king, like I do, then they should work harder to build their own exclusivity partnerships. DC Entertainment is not the only game in town. But B&N needs to work smarter to attract other partnerships and exclusivity deals. For every DC, there are Lucas, The Simpsons, and other graphic deals to make. And Archie is just announcing its own line of superhero comics. And think beyond the box to video and audio opportunities as well. To pull print copies off the shelf does not grow your digital business. The game is young and far from over.
Apple Still Shines
Steve Jobs legacy will be felt for some time and Apple will continue to dazzle. Despite a mediocre response to the latest iPhone news, advance orders for the next generation of iPhone are doing quite well. "Apple Inc. said on Monday that pre-orders for its new iPhone 4S set a record last week with more than 1 million units snatched up online in the first 24 hours. The results top the previous one-day pre-order record of 600,000, set by the new unit's predecessor, the iPhone 4." That the iPhone is now available to Sprint customers is one reason, and there are many users that simply want the next generation of iPhone no matter what. The latest software update with Siri voice command may be the next winning idea for Apple.
And as Apple attracts more customers to its devices, it also attracts more users to its App store. It is a healthy business model that will enable Apple to continue to grow.
And as Apple attracts more customers to its devices, it also attracts more users to its App store. It is a healthy business model that will enable Apple to continue to grow.
Friday, October 7, 2011
Steve Jobs' Business Lessons
Steve Jobs has left an amazing legacy on the business world. He built success from failure and didn't let failure stop him. Others might have quit, but Jobs never did. It may be fun to list his products that failed, from the Apple III to Lisa to the Newton, but he also gave us the mac, iPhone, iPod, and iPad. He transformed the music industry and built a retail empire that hired workers and delivered superior customer face to face service. Amazing given that his products could be noted for not needing human interaction.
He taught us to "think differently" and to never give up. And he never stopped. He turned the movie industry on its ear with the rise of Pixar and changed Disney as a result. He like Walt Disney made you believe in magic.
Apple will continue to prosper as will Disney, but the legacy of Steve Jobs will be felt for some time. He taught us amazing lessons of perseverance and passion. He made us believe and to see failure as the road to success. Simply put, we should follow from his example.
He taught us to "think differently" and to never give up. And he never stopped. He turned the movie industry on its ear with the rise of Pixar and changed Disney as a result. He like Walt Disney made you believe in magic.
Apple will continue to prosper as will Disney, but the legacy of Steve Jobs will be felt for some time. He taught us amazing lessons of perseverance and passion. He made us believe and to see failure as the road to success. Simply put, we should follow from his example.
Thursday, October 6, 2011
Is Microsoft Buying Yahoo?
A simple question. Yahoo is down and lacking leadership, Microsoft needs to expand its footprint. Bing has not been the answer and maybe Yahoo can help. "Given the wide reach of both Microsoft and Yahoo independently, a singular entity would already come with a great degree of demographic overlap."
And that is the challenge facing Microsoft in any of their efforts. They have become corporate while entrepreneurial technological companies take risks and push new ideas. Microsoft needs a leader. It is what Steve Jobs was for Apple. He was a visionary, a risk taker, an idealist, who sought to "think differently" and follow his gut. Without him, the challenge for Apple is to enable that same sense of entrepreneurship and risk. For Microsoft, current leadership has not led by example, they seem to simply follow.
So while a Microsoft-Yahoo merger could provide some synergies, it comes with many challenges too. It would require new risk taking to succeed. Otherwise, it will be noted as another failed attempt by Microsoft to get beyond their Windows and Office product line.
And that is the challenge facing Microsoft in any of their efforts. They have become corporate while entrepreneurial technological companies take risks and push new ideas. Microsoft needs a leader. It is what Steve Jobs was for Apple. He was a visionary, a risk taker, an idealist, who sought to "think differently" and follow his gut. Without him, the challenge for Apple is to enable that same sense of entrepreneurship and risk. For Microsoft, current leadership has not led by example, they seem to simply follow.
So while a Microsoft-Yahoo merger could provide some synergies, it comes with many challenges too. It would require new risk taking to succeed. Otherwise, it will be noted as another failed attempt by Microsoft to get beyond their Windows and Office product line.
Wednesday, October 5, 2011
The Problem With Expectations, We Are Usually Disappointed
It is human nature for us to make expectations prior to outcomes. But I think for the most part, our fiction is always greater than the facts. It is when we are caught off guard that we are most excited. So it comes as no great surprise that yesterday's Apple announcement regarding the next generation of iPhones was dealt with the same way, large expectations, and little satisfaction.
But dig deeper into the announcement and the additional features of the iPhone along with another distribution partner in Sprint will lead to positive long term results. The problem with being an innovator is that your are constantly expected to be innovative. Likewise, the problem with being a comedian is that you are always expected to be funny. It is why comics sometimes deliver dramatic results to surprise and hopefully intrigue their fans.
Same too with Apple. It's only way to top expectations is to do something surprising. These press announcements don't allow for it; they encourage early expectations to be built and then fall into rubble. No, Apple needs to figure out a way to surprise its "fans" so that when it makes its next announcement it is unexpected yet significant. Perhaps that is what is up Apple's sleeve.
Yesterday's announcement will be quickly forgotten as financial results for Apple are released. Apple has the products, the pipeline, and the backbone to deliver content to their devices. But they need to stay innovative and unexpected as Amazon, Google, and others are on their tail.
But dig deeper into the announcement and the additional features of the iPhone along with another distribution partner in Sprint will lead to positive long term results. The problem with being an innovator is that your are constantly expected to be innovative. Likewise, the problem with being a comedian is that you are always expected to be funny. It is why comics sometimes deliver dramatic results to surprise and hopefully intrigue their fans.
Same too with Apple. It's only way to top expectations is to do something surprising. These press announcements don't allow for it; they encourage early expectations to be built and then fall into rubble. No, Apple needs to figure out a way to surprise its "fans" so that when it makes its next announcement it is unexpected yet significant. Perhaps that is what is up Apple's sleeve.
Yesterday's announcement will be quickly forgotten as financial results for Apple are released. Apple has the products, the pipeline, and the backbone to deliver content to their devices. But they need to stay innovative and unexpected as Amazon, Google, and others are on their tail.
Tuesday, October 4, 2011
Zune Is Out Of Tune, Microsoft To Focus On A Windows Phone
It seems another Apple competitor has raised the white flag. For other companies, it was to stop producing a competitive tablet and now for Windows, to not compete with the iPod. "We recently announced that, going forward, Windows Phone will be the focus of our mobile music and video strategy, and that we will no longer be producing Zune players."
So how will a user listen to music on the Windows Phone and why not keep the Zune as a brand extension? While Google and it's Android devices seem to have a strategic approach to compete effectively with Apple, Microsoft may be scattered. What is the Microsoft strategy for mobile and why isn't Zune a part of it? One hopes that Microsoft's history of failed product launches doesn't extend to the Windows Phone. But so far, the loss of Zune seems the rule not the exception.
So how will a user listen to music on the Windows Phone and why not keep the Zune as a brand extension? While Google and it's Android devices seem to have a strategic approach to compete effectively with Apple, Microsoft may be scattered. What is the Microsoft strategy for mobile and why isn't Zune a part of it? One hopes that Microsoft's history of failed product launches doesn't extend to the Windows Phone. But so far, the loss of Zune seems the rule not the exception.
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