“Attention Marketing”; or, What If You Sold Books by Subscription?

post thumbnail
September 2011
by Joseph Esposito

« Back to Independent Articles

“Attention Marketing”; or, What If You Sold Books by Subscription?

by Joseph Esposito

Several years ago I happened to be introduced to Reed Hastings, the founder and CEO of Netflix, at a Little League baseball game. I was already a subscriber, and I got to ask Hastings the question that had been nagging me: “Don’t you risk losing money if your customers order too many movies?”

This was before Netflix began streaming video to the home; its entire business was in DVDs sent via the USPS, and the odd thing about it was that a customer got unlimited usage: all the DVDs you can watch for a fixed-price subscription (at that time, around $20/month). I assumed that Netflix had an interest in handling those DVDs by mail as slowly as possible, but the fact was that the mailings were becoming more efficient. Mail a DVD back on a Tuesday, and a replacement DVD would arrive on Thursday. Why was Netflix operating against its economic interests?

Over the course of the ballgame, Hastings patiently set me right. What limits usage, he said, is not how many DVDs a customer has; the limiting factor is how many DVDs anyone can watch in a month. After he compared Netflix to a smorgasbord where people eat their fill and no more, I realized that although Netflix was ostensibly in the business of renting videos, …IBPA Members – Click here to view the full article (login required).

Join Today!

« Back to Independent Articles

How to Get Involved!
Marketing Opportunities

From mailings to exhibits, see how IBPA's marketing programs help you grow your sales.

Educational Opportunities

Attend a seminar, ask an expert, and get more free advice with our educational programs.

Become a member

Access exclusive members-only benefits starting at just $10.