"Marketing was key in the early adoption and success of Netflix. By getting the word out through major portals, Yahoo, MSN, and AOL, and through its relationship with BestBuy, consumers were deluged with information about the Netflix service"
"Free trials addressed the skeptics of a radically new service, and resulted in high conversion rates to continuing customers. The recurring transaction model helped consumers adopt the discipline of selecting films each week but without pressure."
NETFLIX Free Resources
"Both Netflix and Lowestfare.com will take advantage of Be Free's BFAST affiliate marketing technology platform and Outsourced Program Management (OPM) service. Used by many of the largest merchants on the web, OPM is a full-service option where online merchants can rely on Be Free's expertise to help optimize the management of their affiliate marketing programs."
Affiliate Marketers Netflix and Lowestfare.com Select ValueClick's Be Free
Word of Mouth
""We have benefited enormously from the rapid growth in word of mouth (publicity) ... It has taken us to (SAC) levels that we thought we would not soon see," said Chief Financial Officer Barry McCarthy." Netflix reports first quarterly net profit
"- some 40 percent of signups come from word of mouth, said a Netflix spokeswoman."
"The alliances with Best Buy were critical to launching their portal, as new DVD users were the most likely consumers to try a new rental service."
"Theatres became a preferred method of advertising the Netflix service, and added revenue to a film from avid movie patrons, rather than cannibalizing ticket sales."
Netflix Analyzed via the Value Framework
"The Company markets its service to consumers primarily through pay-for-performance marketing programs, including online promotions, advertising insertions with most leading DVD player manufacturers and promotions with electronics and video software retailers. These programs encourage consumers to subscribe to the Company's service and include a free trial period of typically 14 days. At the end of the trial period, subscribers are automatically enrolled as paying subscribers, unless they cancel their subscription. Approximately 90% of trial subscribers become paying subscribers. All paying subscribers are billed monthly in advance by credit card. The Company stocks almost every title available on DVD, excluding mature and adult content."
NetFlix.com, Inc. (NFLX)
"One of the easiest methods to accomplish this is through the Affinity Marketing programs provided by Leader Technologies. Leader has established independent relationships with multiple service providers. These include...DVD movie rentals from Netflix..."
Each affinity partner pays a fee or "bounty" to the manufacturer based on certain criteria such as receiving free issues of magazines or signing up for a trial subscription to a service. Bounty fees are collected from the affinity partner on behalf of the manufacturer and credited each month to the manufacturer's account. For this printer manufacturer, on average, more than $72,000.00 in bounty fees are generated each year that are used to defray costs of the registration services."
Affinity Marketing Programs...