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How Netflix Is Cashing In On Your Nostalgia

Netflix logo with currency symbols

It’s when my technologically averse best friend started using Netflix that I knew the online entertainment platform had entered the mainstream. (I’m not even kidding, he’s worse with computers than my grandma…)

Anyway, Netflix has become a household name all over the world for a good reason. Apart from being criminally convenient and reasonably priced, the service enables you to watch anything you want, anytime you want. Well, as long as it’s part of their library.

If you’re from the U.S., that’s less of an issue than if you’re from, say the French Southern Territories – currently the single region with the smallest Netflix video selection, counting no more than 324 different movies and TV shows. As if it wasn’t bad enough living in the middle of nowhere, there’s also nothing to watch.

French Southern Territories Google Earth location in the middle of nowhere

Like, seriously. If I zoomed out any farther, I’d be on the moon… (Photo: Google Maps)

But even more populated (and popular?) countries like Germany and France have access to about a third of the 5611 videos American Netflix users can watch. So thank god there is original programming, right?

It was a genius move when Netflix decided to make their own movies and TV shows in 2011. Instead of having to fight with movie studios, licensers, and regional authorities over streaming rights, the company is free to make original content available almost anywhere in the world. Which they certainly make use of as much as possible – just look at this informative map from Netflix’s help page, demonstrating how international of a company the Internet giant really is:

Netflix Worldwide Availability

North Koreans are not only restricted from Netflix – they also don’t have access to food

It makes sense for an online movie platform to produce original content, because it creates a sense of exclusivity for prospective customers. “For only $9.99 a month, you can watch shows you won’t see anywhere else.”

Apart from being accessible from almost all countries, Netflix is also accessible from almost all devices. It doesn’t matter if you’re on a desktop, laptop, tablet, smartphone, smart TV, or whatever else you’ve got lying around. As long as it has a screen, Netflix’s simple user interface and omnipotent video player make watching movies on it a breeze.

And this scheme works pretty well for Netflix. Need proof? All right:

Netflix Stock Price 2011-2016 according to Yahoo! Finance

Despite the current rough patch, Netflix’s stocks have significantly increased in value since 2011.

Just to be clear: The significant price drop during 2012 occured after Netflix split up their streaming and DVD rental services into two separate plans, each costing $7.99 a month, instead of the prior $10 for a combined option. It had very little to do with the production of original programming. In fact, their own content probably even helped get the company back on its feet when it first came out in 2013.

What this graph shows, however, is that Netflix’s worth has significantly improved since 2011. Before then, not a lot happened with their stock. Original programming put the company on the map. And for a good reason.

“House of Cards” and “Lilyhammer” were the first of the bunch for Netflix, soon followed by a fourth season of “Arrested Development” – which was originally cancelled by FOX back in 2006. Dead for five years and then picked up again? That was a tremendous moment in Internet history.  A production company actually reviving another network’s TV show and making it available exclusively online was completely unheard of. It was miraculous.

Arrested Development, a show known for its fast-paced jokes, witty writing, and mockumentary-style presentation, had and has a huge, sometimes fanatic fan base, especially on the Internet, and Netflix was smart enough to realize it. And to eventually start cashing in on it.

The company has continued on this path and produced additional seasons of established shows such as “Star Wars: The Clone Wars,” “Trailer Park Boys,” “Longmire,” as well as a reboot of the 90’s classic TV show “Full House,” called “Fuller House.” And speaking of reboots: “Gilmore Girls,” a show of comparable cult-status as the aforementioned “Arrested Development”, was recently announced to come back for four 90-minute episodes exclusively on – you guessed it – Netflix.

Netflix Original Content

The genius behind picking up shows that were long presumed dead is that you’re tapping into an already existing fan base that will go to great lengths to get some more of that sweet, sweet satisfaction that comes with binge-watching new episodes of one’s favorite TV show.

Which brings us to the next Netflix-inspired novelty: binge-watching. Just like with the words “selfie” and “YOLO”, the Internet played a big role in popularizing a term describing a concept that had been around for a long time. (Self-(important) portraits and the ideas of “Carpe Diem” and “Memento Mori” date back several centuries.)

It’s absolutely ingenious how well Netflix’s first-month-for-free policy plays together with their previously unheard-of practice to release content in bulk, luring in new customers by making them believe that they’re only here for their favorite show and will be long gone before the first subscription fee is withdrawn from their nearly empty banking account. But don’t be fooled: There’s always something else you will want to watch. And by the time you’re done with it, there’s lots of cool new stuff available. Once you’ve joined the Netflix cult, you can never leave. Never.

Netflix – enabling procrastinators since 1997

Shows like “Arrested Development”, “Gilmore Girls”, and “Full House”, especially because they’ve been off the air for so long, invoke feelings of nostalgia in us. We remember watching them when we were younger, with our family, perhaps during better times (when Trump running for president would’ve sounded like an absurd idea). In fact, psychology teaches us that we remember things from the past more positively and thinking about events that make us feel nostalgic makes us more optimistic.

Another way of using positive associations as a marketing strategy are spin-offs from other popular series. By giving the lawyer from “Breaking Bad” his own show (“Better Call Saul”), Netflix can attract fans of that franchise with little effort (without spoiling anything: reviving the original would’ve posed difficult). I’m just waiting for them to come up with a way of bringing something from “Game of Thrones” to their service. Just saying.

Netflix uses these emotions to make their product seem more desirable. They revive old series and make them available through their service exclusively so people who subscribe to the fandom are also forced to subscribe to Netflix. And what true fan would dare not to watch the continuation of an old favorite – especially if the first month is free? This is the secret behind Netflix’s strategy.

But wait, you might say, if the exploitation of old fan bases is such a good idea, how do you explain what happened with Yahoo! Screen?

Yahoo! Screen Logo

Oh yes. That. Only a couple of months ago Yahoo! announced that it would discontinue its online streaming platform started only two and a half years prior.

What makes this interesting is that they tried to imitate Netflix’s winning strategy by a) producing original content, and b) picking up a dying show with a cult following. I’m talking about “Community”, if you didn’t know it – Arrested Development’s experimental, little brother. A highly praised and honestly beloved TV show, made even more powerful by the irresistible war cry that kept fans going through four near-death experiences: the infamous #SixSeasonsAndAMovie hashtag. So why then did Yahoo! Screen not drown in money after they renewed “Community”?

It’s not that the show killed the service, as some people claim. The real answer is just as simple as it is complex: Yahoo! Screen started out with a good idea and then got everything else wrong. Let’s work our way down the list, using Netflix’s strengths outlined above:

1. Name recognition

Let’s be honest with each other here: Had you even heard of Yahoo! Screen before this? And even if so, how many times have your friends talked about spending all weekend on a second-tier search engine subsite? That’s what I thought. Too bad the meme didn’t say “Yahoo! Screen and chill” – it might’ve brought in a lot of traffic.

2. Amount of content

Three shows, are you kidding me? Even the iPhone, historically a one-size-fits-all product line, comes in more than three versions nowadays. Heck, they’ve even reached three sizes by now. Get with the times, Yahoo!! These are times of diversity, not restriction. Oh and speaking of restriction:

3. International availability

This may be the most obvious flaw of the failed streaming service: only being accessible for people from the United States. The world is a big place and Yahoo! should’ve taken advantage of that fact. Instead, everyone else had to pirate their way into season six, letting the link to Yahoo! Screen stay blue.

4. Exclusivity

Seeing as their three shows were only (legally) available on Yahoo! Screen, this is about the only aspect they got right. Although the lack of need for membership might have taken away from the sense of selectivity. Anyone could visit the site and watch their shows for free, no strings attached.

5. Accessibility

Let’s just outright say it: Yahoo! Screen’s video player was an abomination. It was buggy, slow, and made you want to punch someone in the face every four minutes. Horrible.

6. The binge-watch-and-stay-around factor

New episodes of “Community” were released weekly which made binge-watching initially impossible. You have to cut Yahoo! some slack in this department, though, because it made sense to restrict the output of the show to keep viewers coming back for more over a longer period of time. On the other hand, there was nothing to actually stay around for, after you were done with a new episode (see #2 above) and most importantly, the service was completely free. And not just for the first month! Of course there were ads, but I mean, come on, has Yahoo! never heard of adblockers? And if they were hoping for the “fairness” of their viewers, they still should have known that ad revenue wouldn’t bring in enough money. Think about it: Hulu, another large streaming site, both shows ads AND charges a subscription fee to cover their expenses.

7. Nostalgia

This is the most speculative one, but it’s worth thinking about. Community did not go off the air because it was directly taken over from the hands of NBC. It didn’t have time to accumulate fans through endless reruns and being featured on best-of-the-decade lists over and over. And even those people who already liked the show didn’t get the chance to romanticize it in their heads. Nostalgia might have been a powerful motivator for people to visit Yahoo! Screen (despite the terrible video player, my god).

I think I’ve proven to you that Yahoo! Screen made too many mistakes for Community’s fans to be able to even them out. I’m not the only one who thinks so, either. The few things they did right was picking up a popular series on the verge of dying and streaming it exclusively through their website.

Community Yahoo! Screen Original

Netflix, meanwhile, does everything right. Reviving a fan favorite is no guarantee that your streaming service will be successful. But in the right environment and with the right equipment, it can help an entertainment platform stand out from their competitors and come out on top. That’s what happened in Netflix’s case and it’s the reason why this company is still on the rise. And until someone else does it better, I don’t see Netflix going away, but only growing bigger.

It’s the unique combination of convenience, exclusivity, instant availability, easy accessibility, and the added bonus of a large library consisting of incredibly diverse content outside of your handful of favorites, which makes Netflix such a record-breaking success. We come for “Arrested Development” or “Fuller House” and stay for the other 5,000+ shows and movies waiting to be binge-watched.

And don’t get me wrong: I think that’s a good thing. You can say what you want about the company’s selfish intentions, but the content they produce has been of outstanding quality. From the perfidy of “House of Cards” to the hilarity of “Unbreakable Kimmy Schmidt”, Netflix has established a reputation of excellence and I’m excited to see their magic hands put to use on “Gilmore Girls” as well as any other future projects. (I’d suggest “Pushing Daisies” for a revival, if I may.)

Computer Mouse

What is your take on Netflix’s business strategy and what show do you want them to revive next? Tell me in the comments below!