Why did Blockbuster fail while Netflix continues to soar?

Why did Blockbuster fail while Netflix continues to soar?

Posted on Jul 09, 2015
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The quick answer is by not paying attention to how their customers’ preferences were shifting and, when finally reacting, doing too little too late: they offered ‘no late fees’ which did little to combat the Netflix offering of unlimited streaming for a small monthly fee.

Bernadette Jiwa confirms that “buying habits are trending towards more simple and hassle-free shopping”. Statistics from The Economist (2014) support it too:

  • 80% of consumers demand new consumption models
  • 6.8 billion potential subscribers on mobile, social & web


This shift has been dubbed the Subscription Economy.

A subscription pricing model: why it offers the right balance of value and service to the customer


in a world of infinite choices and digitally empowered consumers, quick wins no longer build sustainable business & they don’t create brands that people care about” (Difference, by Bernadette Jiwa)

This marks the shift in power between business and consumer: traditionally a big marketing budget to broadcast your message loudly and widely worked as consumers were information-poor. But now consumers are informed, they’re connected and they will buy in their own way because they can afford to be picky: the internet offers an endless number of opinions and possibilities. Businesses who want to be successful within the Subscription Economy need to devote their energies to fostering long-term relationships and away from selling products. 

The benefits of a subscription model for customers

  1. It keep the company on their toes – you’ll only want to keep subscribing to a service that continues to offer you value and this ensures the company will continue to keep offering you value.
  2. It’s one less thing on your to-do list – you never have to remember to re-order, you never run out so you can just switch to auto-pilot.
  3. Reliability – you know you can rely on the service to always be there: you can’t run out and it’s never closed.
  4. Fixed price – makes budgeting easier to manage as you know exactly what you’re going to get charged (no surprises).
  5. Added value – as everything you need is wrapped up into the one price.
  6. Transparency – there’s a justifiable suspicion about small print. When I’m subscribing for services I look for companies who don’t take card details for a trial and are upfront on how I can cancel. When they’re upfront with me, I’ll trust them more that when the time comes I won’t want to cancel – they’ve got faith in their product so they don’t need to trap me. I’ll choose to stay.

How this applies to the flick subscription

  1. We want you to keep us on our toes – we love getting customer feedback and we want to hear from you on how you need us to develop and that’s why, when you subscribe with flick, there’s a whole forum dedicated to getting your feedback on the features and courses you want to see us develop. You can vote for each other’s ideas so that we can see which things are most popular.
  2. We don’t want training to be a hassle – so now you don’t need to figure out how many of each course you need to buy as all courses are available for everyone all the time. The added benefit being that anyone keen on learning can keep going at their own pace too, keeping them motivated and without costing you any extra.
  3. Reliability - we want it to be just another one of the systems that’s part of your organisation like your phone, internet, CRM, Microsoft etc, so it’s just always there and working as you need it.
  4. There’s something quite reassuring about a fixed price, especially when it’s not combined with a fixed scope either – nothing is out of scope here, no admin fees, no small charges for this or that. Just the one subscription fee (disclaimer – barring VAT but there is quite literally nothing we can do about that, sorry).
  5. With us, the value should only just keep increasing as each month we’ll be adding new courses, quickflick guides, templates or resources and, as long as you keep subscribing, you’ll keep paying the same subscription price for life.
  6. You’re in control of your subscription – demo it for free (no card details required), subscribe then flick it on and off when you need (we believe in this idea so strongly we named the company after it).

So the difference between Netflix and Blockbuster? Listening*.

Feel like giving us something to listen to? Brilliant – tweet, email, chat to us from our website. We want to hear from you.

*or if you’re from Blockbuster, check this out.

 

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