Is Hastings Crazy? Netflix Gives Away a $100 Million Show for Free
Today, Netflix unveiled its first truly homemade show. The star-studded political drama, House of Cards, cost $100 million for two seasons, and Netflix is doing all it can to get some new subscribers out of the investment.
To wit: The first episode is totally free to anyone who wants to get a taste of the drama. Just shimmy on over to the promotional page Netflix created for the event and get your Machiavellian fox for free.
I'll note that the page is absolutely drenched in offers to open a subscription account via the usual 1-month free-trial deal. Grab some eyeballs and see if they'll stick around for more.
You could argue that Netflix is giving away its most exclusive content. If you're so inclined, you can most definitely start with that first episode and then suck down the entire 13-installment season of Cards without paying a penny. And then there's nothing to keep you from walking away. No multiyear contracts, no having to convince customer retention specialists that you really want to get out, nothing. Click, click, and you're done. Come back again when Arrested Development bows in May.
This might look crazy, but it's a very conscious strategy -- and a brilliant one, I'd say.
As CEO Reed Hastings put it to a flummoxed analyst in last week's earnings call: "The fundamental though is not to focus or we don't focus on churn because we really want to make it easy to quit. I know that sounds strange. But we spend a lot of time so that if you leave, you have a really good experience, and that makes you much more likely to come back in."
So even if you exploit Netflix's free-trial offers to the max, Hastings feels confident that you're likely to come back for more. After all, if you don't like your experience the second time, it's just as easy to walk out again.
It's safe to say that Netlfix will gain some valuable brand awareness from this counterintuitive move. The long-term subscriptions might not pile up all at once, but the company is happy to build its reputation the right way. Patience is a virtue, dude.
More expert advice from The Motley Fool
Can Netflix fend off its burgeoning competition, and will its international growth aspirations really pay off? These are must-know issues for investors, which is why we've released a brand-new premium report on Netflix. Inside, you'll learn about the key opportunities and risks facing the company, as well as reasons to buy or sell the stock. We're also offering a full year of updates as key news hits, so make sure to click here and claim a copy today.
The article Is Hastings Crazy? Netflix Gives Away a $100 Million Show for Free originally appeared on Fool.com.
Fool contributor Anders Bylund owns shares of Netflix, but he holds no other position in any company mentioned. Check out Anders' bio and holdings or follow him on Twitter and Google+. The Motley Fool owns shares of Netflix. Motley Fool newsletter services have recommended buying shares of Netflix. The Motley Fool has a disclosure policy.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
