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UPDATE: Netflix Hopes Campaign Is a Blockbuster

15 Jun, 2001 By: Jessica Wolf

Blockbuster’s loss is Netflix’s gain.

At least, that’s what the online DVD rentailer is hoping for by offering afree two-week trial membership on the subscription-only site to customers who qualify to benefit from the No. 1 chain’s class-action settlement.

Netflix.com offers these video renters an escape from the problems they had with Blockbuster, with unlimited DVD rentals from a 10,000-title strong catalog, no due dates and no late fees.

Leslie Kilgore, v.p. of marketing for Netflix, says the feature site users enjoy most is the absence of late fees. She says Netflix has a unique opportunity to show DVD enthusiasts “a better way of renting.” Netflix alsooffers users a “personalized site experience” through the company’s profiling system, Cinematch, Kilgore says.

The bid for Blockbuster defectors is just one dimension in Netflix’s newmarketing drive.

Visitors to the Internet Movie Database (IMDB) in the last month may have noticed a new advertisement touting Netflix on many of IMDB’s pages. The red boxes scattered around the movie information site provide a link to Netflix.com, where users can sign up for a six-week free trial membership.

The presence on IMDB is part of Netflix’s drive to pull in Web surfers to beef up its already growing subscriber base.

In the past, the company has used “almost no paid advertising to fuel growth,” Kilgore says. The more than 300,000 existing Netflix users have attached themselves to the site largely through word of mouth, she says. That’s also how Netflix got attached to IMDB.com. Barnaby Dorfman, group product manager for IMDB, is also an avid Netflix customer. He initially broached the idea of a Netflix-IMDB connection.

Dorfman says the two companies have a similar customer base and similarInternet philosophies. “I think we [IMDB] as a company really believe in the power of the Internet and that it’s not a fad,” Dorfman says, adding that Netflix’s businessstrategy supports IMDB.com’s premise of creating an evolving Internetcommunity. “They have a smart, well designed, well thought-out site and theyuse e-mail extremely effectively,” he says.

E-mail is the main communication tool between Netflix and orderingcustomers, whose interests mirror those of IMDB.com users.

Kilgore says Netflix users are everything from casual movie watchers toenthusiasts to full-blown film connoisseurs. Dorfman says the same about IMDB users. “The people who come to our site are people who love movies,” Dorfman says. “We have 8 million unique visitors every month and DVD is something they’re still adopting. It [Netflix] was sort of a natural fit.”

Netflix’s ad placement on the site is still in the experimental phases, Dorfman says, and IMDB has not yet requested any consumer feedback on the free subscription offer attached to the ad. “If it makes sense for our users and our customers, then it’s something we’ll continue to do,” he adds.

E-commerce mega site Amazon.com owns IMDB.com and, while Netflix could beviewed as a competitor to Amazon’s DVD sales, neither partner feels that will be an issue. Kilgore calls the IMDB.com deal a partnership more than an ad buy, though IMDB.com is getting compensated for the Neflix links on its site. Without giving details, Kilgore also says Netflix is pleased with the results so far and the company is in negotiation with as-yet unnamed Web sites to start similar promotions.

The ventures, she says, are “overall, very successfuland growing.”

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