At this stage no one can deny that Netflix has been a huge success around the world and revolutionized the entertainment Industry. With 98.75 Million subscribers generating 8.83 Billion dollars from revenue in 2016, its clear to see what a giant this reasonably young organisation has become in home entertainment.
Of course people like us digital marketers are not the only ones who notice these kind of numbers and everywhere you look you can see competitors direct or indirect scrambling to copy Netflix’s model of success. Traditionally you’ve got Presto, Stan and Hulu all looking to stream their own library of movies to consumers with varying levels of success, but what about in other industries?
It would seem that the Netflix model of innovation has finally reached Microsoft and through it entered the online gaming industry. This is through Microsoft’s newly announced Xbox game pass releasing on June 1st of this year. The Xbox game pass gives users access to over 100 titles for the Xbox One and 360 ready for download and play as soon as they subscribe.
In a similar vein to Netflix, Xbox chief Phil Spencer has also announced the companies commitment to creating original content to be steadily released in the coming months. Interestingly enough this will also be in an episodic form and not in the traditional triple A blockbuster form that we have seen most video games release in up to now. This move will no doubt be with the aim of hooking users to their subscriptions to make sure they continue to keep coming back for more every month.
Competitors Sony have a similar service which they offer on their console called PlayStation Now. This service which contains a somewhat smaller library of games also provides access to them for a subscription fee. The key difference between these two services being that the Xbox allows users to download the game once and play it for the remainder of their subscription whereas the PlayStation makes users continuously stream them. This could be seen as a positive or a negative for either consoles as Xbox users will save a lot of data by organizing their games into one large download but PlayStation users will have more flexibility when choosing which game to play.
This will no doubt come as more bad news for brick and mortar stores such as GameStop which continue to lose market share in the industry. As of the start of 2017 game stop has already had to shut 150 of its stores globally due to declining sales. There is a clear trend towards users going digital and now the numbers are starting to prove it. Who knows, if things continue to go as they are GameStop could be the next Blockbuster and cease to exist. Unless GameStop manages to find a new niche or selling point for video game users they could find themselves in a similar situation soon!
For the rest of us though I think the most important part to take out of this is the business model. In a day and age overflowing with content, consumers do not want to be paying individually for everything they desire. Be it from video game, movie, music, book or TV show mediums its clear to see that a subscription service is the superior option in 2017. This also gives marketers so much more potential to grow a relationship with consumers as the initial purchase does not define the entirety of the time shared together. When consumers are partnered with your brand for years at a time this can lead to truly lasting loyalty that is hard to generate with once off purchases. However more care and effort needs to be put into this relationship as the consumer is constantly relying on your high levels of service.
What do you think? Are subscriptions the way to go or do you like just buying what you want? I personally think Xbox game pass is a great idea but I wont be getting it.
Let me know what you think in the comments and Ill see you around the blog!
Some interesting links: