Shove it in my face, why don’tcha …
Netflix also doesn’t have to worry about“finding the right audience” or spending much on marketing. It already knows who will enjoy its programming, and its content delivery platform can push shows directly to their target audience. Part of the reason I binge-watched House of Cards so quickly was that every time I turned on my Netflix, the app served up a giant banner ad inviting me to watch the next episode.
That’s not just more effective than traditional marketing — it’s also massively cheaper. Big studios commonly spend $100 million or more marketing a film before it’s release, and sometimes these expenses are big enough to turn what would have been a breakeven performer or even a mild hit into a disastrous flop. For example, in 2012 Disney’s John Carter actually earned back its production budget at the box office, but bloated marketing costs led Disney to declare a $160 million loss for the quarter thanks to the film. Similarly, HBO had a big hit with the grittyhistorical crime dramaBoardwalk Empire, but HBOspent north of $10 million promoting the pilot episode, which itself cost $18 million to produce.
Netflix still did spend money promoting House of Cards the traditional way. But with the ability to literally shove its content right into the faces of its target audience, I imagine the company will find that it doesn’t need to, especially if it can leverage its data into content like House of Cards that inspires zealous fandom.
The article A Bear Gives a Bull Case for Netflix originally appeared on Fool.com and is written by Daniel Ferry.
Fool contributor Daniel Ferry owns shares of Apple and Amazon.com. The Motley Fool recommends and owns shares of Amazon.com, Apple, and Netflix.
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