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Communications.Management.Marketing

Truth Is Just Perception

Is Netflix A Brand?

And, by the way, what is a brand?

Yesterday, Bob Greenblatt, chairman of WarnerMedia Entertainment, the new entity created by AT&T following its acquisition of TimeWarner, said about Netflix:

Netflix doesn’t have a brand. It’s just a place you go to get anything — it’s like Encyclopedia Britannica.

This statement makes you wonder what a brand is. In my latest book on digital transformation, Le génie gênant (only available in French), I give the following definition:

A brand is the guarantee of an expected experience. Said experience can relate to pricing, innovation, product quality, customer service and/or other elements. For example, Apple and Costco do not offer the same guarantees to their respective customers but both brands inform them of what to expect. If Apple was offering the quality of Costco’s products and Costco the pricing of Apple’s products, their customers would be appalled.

The performance guarantee communicated by a brand is meaningful and satisfies an emotional need for belonging. Before even selecting their products and services, customers of Adidas and Nike, Apple and Microsoft, Avis and Hertz, Burger King and McDonald’s, Coca and Pepsi, Fender and Gibson, Ferrari and Lamborghini purchase, often unconsciously, a bond of trust with those brands. […]

A brand is neither an experience, nor a product nor a service. It is a relationship, that is, shared values and emotions.

(CC) Netflix

To claim that “Netflix doesn’t have a brand” and take the example of Encyclopedia Britannica to justify that assertion is therefore doubly absurd. In its time, Encyclopedia Britannica was a brand that, to use my definition, guaranteed an experience made of the completeness of the topics covered, the reliability of the information provided, and the craftsmanship of the physical books delivered.

The same is true for Netflix today. Its brand guarantees the volume and diversity of its content, the simplicity of its user interface, the technological excellence of its streaming infrastructure, and the ability to binge-watch its shows.

The power of Netflix’s brand stems from those key characteristics and from the appreciation of its subscribers for the experience it provides them with. As a result, its main competitor, as Netflix cofounder and CEO Reed Hastings once said, is sleep.

In fact, Bob Greenblatt’s statement could become to the competition between HBO and Netflix what Steve Ballmer’s 2007 infamous prediction about the iPhone1 has been to the mobile rivalry between Microsoft and Apple:

There’s no chance that the iPhone is going to get any significant market share. No chance.

Those judgments tell more about their authors than their subjects. They demonstrate Greenblatt’s and Ballmer’s inability to think beyond their own experience: HBO’s brand in one case, Microsoft’s business strategy in the other.

In both cases, by trying to expose the supposed weaknesses of their competitors, both leaders show theirs.

1 Which had been unveiled by Steve Jobs four months earlier.

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