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The Greatest Trick Netflix Ever Pulled Was Convincing The World HBO Is Its Rival

Richard Plepler and Reed Hastings are frenemies. Reuters/Fred Prouser, Richard Brian

It will surely go down as one of the great CEO quotes of 2014. Netflix’s visionary CEO, Reed Hastings, was asked about his counterpart at HBO, Richard Plepler, who had recently said he was not concerned about people sharing passwords for HBO’s online service, HBO Go.

“So I guess Plepler, the CEO of HBO, doesn’t mind me sharing his account information. So it’s and his password is Netflixbitch” remarked Hastings.

The apparent tension between Netflix and HBO, the two iconic companies behind some of America’s most loved shows (and Americans do love their television) has captivated the media, ourselves included. It’s not difficult to understand why. In many ways, it symbolizes the classic 21st-century business story: an upstart challenger from Silicon Valley disrupting an incumbent with a compelling and well-priced product, underpinned by impressive technology.

But the rivalry is grounded less in reality than in clever marketing.

Last year was by any measure a resoundingly successful one for Netflix, which added a 6 million paying users, a 25% increase, in the US market. But how many did HBO lose over the same period? None. In fact, it added 2 million subscribers, its best performance in 17 years. Media analyst Rich Greenfield earlier this year dismissed (registration required) the notion that Netflix’s growth was coming at the expense of premium channels like HBO. “We believe over-the-top video households are among the most passionate about video content—meaning you subscribe to HBO and Netflix, not HBO or Netflix,” he wrote.

The best evidence that this is not a zero-sum game comes from viewing patterns. Asurvey of nearly 10,000 households by TiVo last year found that those that watched the first season of Netflix’s political drama, House of Cards, watched 85% more HBO content than non-Netflix households did. HBO itself publicly argues that it does not compete directly with Netflix, often describing it as a complementary service.

So why does Hastings keep on fanning the rivalry? According to a report by the New York Times media columnist David Carr (which Netflix has never denied), Hastings has privately told executives at Time Warner that the “comparison benefits Netflix” and that he sees the banter as “harmless mischief.”

But it also serves a subtler purpose.

Americans love HBO shows—the channel’s hits over the past two decades include The SopranosThe WireGame of Thrones and this year’s True Detective. But they also hate their cable companies, who force them to pay for expensive bundles of hundreds of channels in order to get the few, like HBO, that they actually watch. And the cable firms do this because media companies like Time Warner, HBO’s parent, make more money if their channels are all bundled. So the Netflix boss’s quips at HBO are also part of a broader narrative that resonates with almost all Americans: their dissatisfaction with how the pay TV industry works.

A Netflix spokesman describes the rivalry between the two as being like that between baseball’s New York Yankees and Boston Red Sox (“We push each other to do great work”). But as businesses, at least, HBO and Netflix are very different beasts, and that doesn’t look like it’s about to change. At an investor briefing last week, Plepler was again asked whether the company would consider selling HBO Go on a standalone basis, which would make it a lot more like Netflix. (Currently, only subscribers to HBO on cable can use its online service). “We have the capacity to do it. We have the ability to pivot, and if we think that makes sense, we’re going to do it,” he said. “But right now, there are four billion reasons or so to do it the way we’re doing it [now]“. (HBO generated $4.4 billion in revenue last year).

There are, of course, ways the two companies compete directly. They have both tried to acquire the same content in the past: Netflix outbid HBO for House of Cards. They compete for critical acclaim, although at this juncture, HBO retains a commanding lead. But as Jeffrey Katzenberg, the CEO of Dreamworks, succinctly summarized the situation to the New York Times last month. “I think there’s a fiction here that somehow Netflix gains are HBO losses.” And it’s a fiction that Netflix seems quite happy to sustain.

By: John McDuling (Originally Posted at Quartz)


Why the Norton Marketing Team is Winning Newsjacking in 2014

norton“Can you name five brands that have you excited for the rest of 2014?

Was one of those brands an antivirus software company? If yes, get help. If not, keep reading to see why Norton Antivirus may be one of those brands actually worth getting a little excited about.

The antivirus software industry isn’t exactly known for innovative, creative or funny marketing campaigns. It honestly seems that most of the interaction between the majority of the population and antivirus software is clicking the “NO” box when asked to renew a 30 day trial. Fortunately, there’s nothing about any of this that means things need to stay this way. In fact, Norton may have just broken the proverbial ice with a brilliant little Facebook post.

Remember a few days ago when you couldn’t turn on your television without hearing about everyone’s favorite Canadian pop star? As one CNN anchor put it, “the most important story of the week”. In a week severely lacking subtantial news stories, like massive riots in the Ukraine, the Sochi Olympics, severe chemical spills in West Virginia, and an upcoming State of the Union address, I am glad our largest media outlets chose to focus on the news that truly matters.

But, I digress. Norton was able to brilliantly leverage this absolutely insane level of coverage to their advantageby posting the picture to the right up on their Facebook page.

Did you laugh? I definitely did when I first saw this post come up in my Facebook feed.

As of the time of this blog being written the post containing this picture onNorton’s Facebook page has reached over 14,000 likes, nearly 12,000 shares and just shy of 700 comments. For reference, the average across the last 3 visual posts by Norton would be 38 likes, 3 shares and 1 comment. I’d say the marketing team at Norton did a good job with this one!

In a year where McAfee is absolutely reeling  as they attempt to rebrand into Intel Security, Norton couldn’t have chosen a better time to go viral. By going viral on Facebook Norton have likely exposed themselves to thousands of individuals they otherwise would not have reached, especially those young folks that will become the future customer base of Norton.

I just wanted to share this with all of you and I hope you got as much of a kick out of it as I did! This is really just a great example of how creativity can help in making your content stick. Norton’s marketing team took a current news bit, and instead of just writing a blog post about it decided to make a simple but funny visual piece of media out of it. Simple, but brilliantly well done, and all within Norton’s current brand scheme! I’m in content heaven, guys.

Stay creative everyone, inspire yourself every day.

To the marketing guys at Norton who drew up this great bit, keep up the great work. No pressure.”

Taken from MediaWizardz blog titled “Why the Norton Marketing Team is Winning Newsjacking in 2014” by Michael Korolishin. 

Twitter: @EimantasK

Branding Trust: Why we buy brands?

What do consumers do when they are going through the purchase decision? They gather information. But, do they gather information for all the options? Most likely the answer is no, they do not. 

Consumers tend to stick to certain brands they trust. This is very important for not only organizations, people and businesses to understand.

Lets take a theoretical situation where John is looking for a surround sound system. After getting off of work on Friday, John stops at a gas station to fill up his car. While he is standing at the gas pump, day dreaming about his choices for which sound system he would like to buy this weekend, a person walks up to him asking him if he would like to buy a surround sound system for $150 (a friend of mine was approached and given this price). When I bought a BOSE surround sound system, I paid upwards of $800 for it. If you were John would you pay cash for a surround sound system sold on the street. In most cases no you wouldn’t, because you have no trust in the person selling it, and you would also have to trust that it actually works.

Lets look at another example, this one taken from “The Brand Gap”, written by Marty Neumeier, a book I read a few years ago. Looking back, before the Revolutionary War of the United States, when there was also paper currency. But right after the Revolutionary War paper money became much less valuable than previous to the war. Silver and Gold became currencies that people of that time could trust. Since then, it took close to a few hundred years in order for citizens to accept Silver Certificates as a substitute, even though they were still backed by metal reserves. Further, it wasn’t until a hundred years later that we were willing to accept Federal Reserve Notes, which aren’t even backed by metals but instead by the brand of America. Quickly afterwards in the book Neumeier writes “Will we soon be ready to accept international cyber-currency as an improvement on credit cards? Sure, if we can trust it.” (This book was written almost ten years ago)

Nearly ten years later we are seeing just that, the acceptance of a cyber-currency named ‘Bitcoin’. Why are some companies from all over the world taking it as a form of payment, why is an individual selling his house in the Hampton’s for Bitcoins? The answer is simple, we are beginning to trust it.

Much like trusting a person, or a form of currency when we make purchase decisions we are engaging in trust, whether it be the brand of a product, or a brand of the distributor. Nevertheless we are Trusting The Brand. We trust the brand because of previous experiences, word-of-mouth, or the fact that the brand has been around for many years. There are many reason why we trust certain brands, but this trust from consumers is very important.

How do you get consumers to trust you? How do you get a person to trust you? Through time and actions can a perception of trust come about.

Twitter: @EimantasK