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TK's MORNING BUZZ: Netflix's Free-Trial Promotion Capitalizing on Blockbuster's Late-Fee Commotion Is Allan Caplan-Style Guerilla Marketing at Its Best

14 Jun, 2001 By: Thomas K. Arnold

Allan Caplan would be proud.

Caplan, for those who have been in the business for less than a decade, was the feisty "guerilla marketer" who preached hardball competitive tactics to his fellow independent retailers in the late 1980s.

At the time, the Blockbuster machine was just getting into gear, and Caplan, owner of the Nebraska-based Applause Video chain, saw the writing on the wall. He held a series of seminars around the country -- some of them in conjunction with Video Store Magazine -- for his fellow indies, preaching the gospel of down-and-dirty competition.

"Do whatever it takes," was his message and, while Caplan ultimately sold out to the Big Blue Menace he so fervently railed against, his words undoubtedly fired up a good number of other retailers to hang in there and stand ground.

Memories of Caplan came back to me last night as I read the press release from NetFlix, the revolutionary online DVD rental store, touting its latest promotion.

Seeking to capitalize on the wave of publicity riding Blockbuster's offer to settle its late fee suit, NetFlix is making an offer of its own: a free two-week trial membership in NetFlix's subscription rental program to litigants in the class-action suit against Blockbuster.

From the press release: "NetFlix... is offering consumers who qualify to participate in one of the 23 class-action suits against Blockbuster over late fees an opportunity to eliminate these feesaltogether."

The release notes that while Blockbuster has agreed to settle the legal actions by providing customers with free rental coupons, "late fees, however, will continue to be charged for extended viewing. In contrast, Netflix doesn't have due dates or late fees, offering customers a movieexperience that is free from these worries."

Interested consumers are instructed to visit NetFlix's Web site and enter a special code. "The free two-week trial is available to any Blockbuster customer who feels they have paid unwarranted late fees," the release states, noting that the free trial offer expires July 31.

What chutzpah! At the very least, NetFlix will steal some of Blockbuster's thunder. The strategy this online DVD retailer is pursuing falls straight into one of Caplan's tenets: find out what the competition is doing and find some way to steal some of their momentum.

Good going, guys. Independent retailers should listen and learn from you -- maybe making a similar offer themselves.

And Allan Caplan, well, as I said before, he should be proud. In fact, I'd love to hear from him to see what he thinks. Allan, are you out there?

Comments? Contact TK directly at:TKArnold@aol.com

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