Netflix vs. Blockbuster PR Wars: Marketing And Book Excerpt

Warren Buffett has said “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”  Netflix has harmed their reputation rather quickly in the last few weeks, and now we are seeing real battles emerge in their space.

Blockbuster has just sent out a message which read: “Attention press, Have you seen this movie before? First Netflix, now Redbox … all while Blockbuster stores lowered prices for its thousands of movies and games to 99 cents per day. Better yet, we accept cash, debit cards and credit cards at Blockbuster stores….” Netflix’s crisis PR mistakes has opened a window for Blockbuster, perceived as a stale brick-and-mortar movie rental retailer to become more aggressive and try and take advantage of their competitors mistakes. It could be a unique way for Blockbuster to gain market share as Netflix’s credibility and reputation is harmed.

Amazingly, Netflix is a company that succeeded as Blockbuster disappeared and didn’t address issues of importance to their core consumer – convenience, time, and cost as the following book excerpt from “For Immediate Release” states:

“Blockbuster Inc., the media rental company, didn’t evolve with its customers or technology and has suffered because of it. In a set of March 2011 court filings, the chain indicated it would begin closing 186 more stores by the end of that month, bringing the number of its U.S. locations closed or slated for closure to 1,145. It was a confluence of events (on-demand video, Internet movies), but number one among them was that

people hated the inconvenience of having to go to the store to return movies and face late fees for not doing so on time.

 

 Obviously Blockbuster lost the connection with its audience by not addressing issues that had become important to them— convenience, time, and cost. In contrast, Netflix, the DVD mail and on-demand movie rental service, is leading the way in terms of convenience and price with easy-to-rent and -return DVDs and with broad availability of on-demand movies. It’s also starting to create its own content by entering into production deals with directors. Interestingly, the company’s most effective PR has been on a grassroots, word-of-mouth level. An estimated 40 per cent of new Netflix customers come from word of mouth. “We have benefited enormously from the rapid growth in word of mouth (publicity). It has taken us to levels that we thought we would not soon see,” Chief Financial Officer Barry McCarthy told reporters. Netflix has grown and continues to innovate steadily.  Seems like Netflix stole Blockbuster’s lunch while Blockbuster was taking a nap.”

 

Time will only tell what the next chapter looks like.

Ronn Torossian is the CEO of 5WPR, a Top 25 PR Agency and has a best-selling PR book”For Immediate Release: Shape Minds, Build Brands, and Deliver Results with Game-Changing Public Relations” an Amazon best selling Public Relations book available for purchase at: http://www.amazon.com/Immediate-Release-Deliver-Game-Changing-Relations/dp/1936661160

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