Game On: How Netflix Levels Up its Entertainment Proposition with Gaming

By Leah Baptiste

3 mins read


Game On: How Netflix Levels Up its Entertainment Proposition with Gaming

By Leah Baptiste

3 mins read


Netflix is well-known as being one of the pioneers of mass-market video streaming, moving into this space back in 2007, when going to Blockbuster Video to rent the latest DVD was still a popular Friday night activity and Apple was still yet to offer movie rentals on iTunes. Netflix changed the game for how many of us consume content and a lot of brands followed suit, incorporating streaming into their more complex propositions such as Paramount+, Apple TV, Hulu and many more. 

 

To combat this, Netflix heavily invested in creating original content in 2013, starting with ‘House of Cards’ in order to differentiate themselves from competitors. By 2022, original productions accounted for half of Netflix’s library in the United States, with consumers spending on average 3.2 hours per day consuming content.

 

However, Netflix is still being challenged by large companies that have created their own streaming platforms and revoked Netflix’s rights to stream their content (e.g. Disney+). In order to protect its market share along with original content, the streaming giant is building a game library. They currently have 40 games to launch this year and 70 in development with partners. The games are accessible for subscribers through the app without any additional costs. This is an interesting play considering a recent report suggested fewer than 1% of the streaming giant’s subscriber base are interested in Netflix’s games. 

 

So, why would Netflix diversify their proposition?

 

Stickier propositions Diversifying a proposition increases the chance of customer loyalty through providing them with more services. This also enables the brand to keep its proposition relevant to consumer demands and changing market developments.

 

Attract a new audience Broadening a proposition reduces the limitation of the type of audiences attracted to the offering as there are more services catering to people’s interests. This expands brand awareness and ultimately increases sales.

 

Influence content strategies Netflix could use data to see the most popular games and then base their video content around it or vice versa. Having more complex propositions helps the brand better understand consumer preferences which can be used to influence brand priorities.

 

Inflation justification Netflix has recently announced they are increasing the baseline price, and announcing their gaming initiative may be an attempt to justify this upcharge.

 

Key Takeaways

 

There are increasingly blurred lines between organisations that sit within the streaming world as they rarely ever just offer streaming services as a single proposition. Netflix’s offering is quite simple, making it difficult to be a front-runner as their competitors are now big giants such as billion-dollar company, Amazon and Silicon Valley tech provider Apple. 

 

When expanding a proposition it is important to keep the consumer high priority as it enables the brand to tailor the new services to consumer demand and can influence their strategy. However, it is also just as important to introduce new services without hindering the quality of the other services within the proposition. Otherwise instead of keeping existing members engaged in the platform and driving new audiences to subscribe, it may just drive them away.

 

The introduction of games requires a very different skill set and I am very interested in how Netflix will align their content strategy with their gaming. If done successfully this could solve the curse of big companies introducing gaming initiatives and failing (Amazon, Apple, and Google have all swung and missed to varying degrees). So could this new initiative be the next big thing for Netflix, or is it GAME OVER for the streaming giant? Only time will tell…


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