The New Content Models

In the first quarter of 2018, Netflix serviced more than 7.5 million new customers.

You don’t see growth like that unless your model really works. And there is no doubt that Netflix’s ‘something for everyone’ approach has made the start-up brand phenomenally successful.

But as the traditional content players begin to develop their offerings to include streaming services – through a combination of acquisitions and innovations – we are beginning to see alternative models develop.

Netflix have something for every person, at any moment. They have over 2000 demand states. Once paying for the subscription, it is very hard to justify leaving, as you can almost guarantee there will be something that appeals to you at any given time.

In contrast, longer established content providers like Disney are using portfolio plays and package propositions to encourage loyalty. With Hulu and ESPN+ in their family, it has been suggested that Disney may offer customers the option of purchasing a discounted bundle of these two streaming apps, along with their own upcoming Disney-branded service.

The Disney model is interesting for a number of reasons. Firstly, they use the distinctive propositions of each of the platforms (e.g. Disney for the kids, Hulu for mum & dad) to create a targeted but rounded offering, mitigating the risk that ‘if you’re for everyone then you’re for no one’.

Secondly, similarly to ‘quad play’ in the telecoms sector, the bundling approach provides users with a more for less, giving them access to a wealth of content at a cheaper price than if they were to subscribe to three separate services.

Lastly, bundling their new streaming service with familiar names like Hulu and ESPN could help Disney drive trial of their own branded offering.

There’s no doubt that the Netflix’s ‘for all’ model will continue to be a success in the near future.

However, if the bigger players are able to give the impression that they can provide the perfect balance; offering wide content access through multiple platforms, whilst also maintaining a feeling of targeted content with the distinct propositions of each app, Netflix may need to consider how their model can respond.

By: The Value Engineers

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