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Netflix steps into cinema

The co-existence of the old and the new sometimes seems tricky in the marketing work. As soon as a new product, brand, service, or model comes along, the old versions must die. ‘X is dead, Y is king’ is an all too common phrase, with business models and brands often accused of ‘killing’ their established competitors. One of the most famous assassinations in the brand world is Netflix’s elimination of Blockbuster.

But arguably, Blockbuster killed itself.

Look a little closer, and it’s clear Blockbuster failed to adapt to the wider changes that were altering how consumers were being entertained. They were seemingly oblivious to the context of the changing technologies and lives which influenced this. Netflix was able to observe Blockbuster from the outside, as well as the macro forces of change affecting people’s lives. In doing so, they were able to create a service that made sense for the way that they were – and are – living.

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Pour one out: Blockbuster Video, no more

Netflix has infamously said that its main competitors are not other streaming services like Amazon Prime or the much-anticipated Disney+. Their biggest competitor, so it goes, is sleep. This attitude encapsulates Netflix’s ability to adapt to the world in which it finds itself, and shape entertainment from the inside out, rather than attempting to fit a square peg into a round hole.

The most recent display of this agility comes in the form of the entertainment giant’s acquisition of the iconic Paris Theatre in New York. Signing a 10-year lease on the cinema signifies a huge commitment from Netflix, and an acknowledgement that the silver screen in physical form is still as relevant as it was before Netflix established its cultural dominance. In fact, recent studies have shown that Netflix has not killed cinema at all – a 2018 study carried out by EY shows that those who go to cinemas more frequently also stream more frequently. According to the UK Cinema Association, in 2012 (the year Netflix started streaming in the UK), cinema admissions reached 172.5 million. While they dipped to 157.5 in 2014, admissions have remained steady about 170 million since 2017. Netflix is positioning this acquisition as a gesture of appreciation for the history of cinema, and themselves as custodians of the space, preventing its tragic demise.

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The Iconic Paris Theatre, NYC

So, what can other brands learn from Netflix’s latest move? Consider the world outside. Outside your organisation, outside your category, and even outside of the dominant culture of today. Snow melts first from the edges: and by anticipating the change outside, bold brands can adapt, innovate, and win. And maybe buy a cinema in the process.

 


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