Is Hastings Crazy? Netflix Gives Away a $100 Million Show for Free
Feb 1st 2013 6:00PM
Updated Feb 1st 2013 7:00PM
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.
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