We’ve written about Netflix a few times on this blog. Beginning in July 2011 with their poor execution in communicating a major pricing structure change, it seems this former media darling has been on a downward spiral in the news ever since. And their stock performance certainly reflects this.
But while Netflix’s saving grace has historically been their unique product offering, that differentiation is growing smaller by the day. Amazon and Hulu have been nipping at their heels for a while now in the streaming category, and just today, Redbox announced its beta streaming service will go live later this month and will also include a disc/streaming combo package, not unlike Netflix’s.
In the absence of a proprietary service or unique product, brands must rely on price or reputation to differentiate themselves. Unfortunately for Netflix, at this point the company is neither winning the pricing game or the popularity vote. Had the company handled its initial pricing change better – and its subsequent reaction to the public’s disapproval, they may very well have remained heads above their competitors in the public eye. When consumers are satisfied with a product or service, they have little reason to seek out alternatives. But by alienating their customers, brand loyalty dwindled and Netflix opened the door for their competitors to swoop in with similar offerings.
It will be interesting to see how Netflix will be affected by Redbox’s entrance into the streaming world, considering the latter is already well-known and liked. What do you think? Is Redbox poised to surpass Netflix, or will Netflix find a way to redeem itself in the public eye to keep its customers? Is Amazon still a contender? Or is there a dark horse in the form of another company that we should be watching for? Do you think it will all come down to who offers the most content?
Image via CNN Money.