Netflix wants non-subscribing moviegoers to give the digital platform a chance. The company has launched a marketing campaign offering these non-subscribers two movie tickets (priced at $13 each) for only $1 once they sign up for a free month-long trial and stream at least three movies or TV episodes.
It's an interesting strategic move, as it specifically targets and lures moviegoers toward the ever-increasing expanse of digital in-home entertainment options.
BTIG Research analyst Richard Greenfield says the campaign is part of Netflix's year-end goal of acquiring 7 million new subscribers. Greenfield also writes on his blog:
"We continue to believe the increasing amounts of digital in-home entertainment options (such as Netflix) will continue to negatively impact movie theater attendance trends – the hurdle rate to ‘get up and go’ to the movies is moving ever higher, particularly given the pricing of a movie ticket relative to new forms of home entertainment."
One wonders how clear the lines of communication are between Netflix and the movie theater chains for which Netflix is offering the $1 tickets. If moviegoers present a ticket voucher at a theater unfamiliar with the value of the voucher, disgruntled customers might assume it's the theater's fault.
Netflix has had a tumultuous two years. After mishandling the transition from DVDs to streaming and dropping many catalogue titles (and losing 800,000 monthly subscribers in the last quarter of 2011), the company recovered impressively and bounced from 23.8 million subscribers to approximately 25 million. Also, a recent study showed that of 3,500 subjects, 30% were streaming from Netflix as opposed to other sites — a 3% increase from December 2011.
Still, Netflix has its work cut out: Bringing in more subscribers even as its library of fresh DVD content is reduced from a few years ago. Plus, it will be up against more SVOD (streaming video-on-demand) competition in the latter half of 2012 with the debut of the new Kindle Fire tablet, which is directly tied to Amazon Prime and the launch of digital platform joint partners Redbox and Verizon.
Netflix also has more original programming in the works. The proof will be in the pudding as they compete with cable content, from HBO to AMC. New York-to-Norway mobster drama "Lillyhammer" debuted in February 2012, and tentatively slated for early 2013 are the women-behind-bars exposé "Orange is the New Black," Eli Roth's horror series "Hemlock Grove" and David Fincher's budget-busting Kevin Spacey K Street series "House of Cards."