Why Netflix needs to shake up the brand to find its next wave of growth
Netflix saw its brand grow 19% between 2020 and 2021, according to Interbrand. But as we emerge from the pandemic, it is seeing that growth rate stall as subscription numbers dwindle. For The Drum’s latest Deep Dive, Marketing Secrets of Fast-Growth Brands, Molly Rowan-Hamilton of BrandOpus considers what the brand can do to stay relevant in an increasingly competitive sector.
Molly Rowan-Hamilton weighs in on how Netflix can stay relevant in its competitive sector
Netflix reinvented the way consumers consumed content. In a world that involved going to the cinema or renting from a local Blockbuster, suddenly the whole experience could be brought into the comfort of our own homes.
It was a distinct challenger approach that was bold and unconventional. It put the consumer at the heart and championed convenience and ease above all else. A whole range of options became available to viewers and its accessibility, as well as variety, was a huge success. Since Blockbusters’ demise in 2010, Netflix has had a meteoric rise.
And, like many businesses, Netflix benefited from the pandemic. It was a go-to and an emotional support – to some, even a lifeline. Just before the pandemic, it was voted the number one fastest growing brand in the US.
But in January 2022, Netflix recorded a dramatic decline in subscription sign-ups. Bloomberg reported it had the worst quarter in its history. So why has this happened? Of course, post-pandemic we’re starting to leave the confines of our homes, refusing to be tied to our screens and re-engaging in what the outside world has to offer. Streaming services, in general, are in decline. The competitors and category are feeling the impact of a shift in behavior – and Netflix is bearing the brunt of it.
Its subscription rate is declining faster than competitors; Disney+ recently announced record sign-ups, surpassing its forecasted amount by over 3m, and Amazon Prime is hot on its tail with the second-highest subscriptions out of all online streaming services – and climbing. Perhaps it’s even more of a shocker because Netflix was originally the leader and riding high, fast above the rest.
This may be, in part, because Netflix has fallen into the pattern of trying to be everything to everyone – a tempting, but dangerous, trap for any brand. HBO or Hulu, for instance, have a more distinct brand character and personality: HBO the home of elevated, scripted content and Hulu the accessible, younger relative. Netflix doesn’t have a clear point of difference. Even its visual metaphor of ‘The Stack’ created by Gretel in 2015 was created to symbolize the ‘endless’ content of the platform. Has this lack of specificity made Netflix generic?
Moreover, as we enter an era where brands and streaming services look to be as bespoke and tailored as possible, this symbolism communicating endless choice is perhaps at odds with changing consumer trends. If Netflix wants to position itself for future success, it has to look beyond simply being an aggregator of, seemingly endless, content.
So, what could a new era look like for Netflix?
Many leading brands make their way by challenging the world in front of them, which is exactly what Netflix did. That energy, that character, needs to be persevered and nurtured. But as the age-old story goes, success comes with a shift, from challenger to leader, and it becomes very easy to become stuck in the past. What made you successful before may not be the formula for success in the future. And getting stuck in the comfort zone of past success can stop you from taking the necessary risks to push you forward.
Nowhere is it more evident than in the brand’s core asset, its visual identity. Netflix’s brand identity has become flat and one-dimensional. That’s not to say it’s not eye-catching. But when considered in the context in which it sits, full of dynamism, energy and movement, it’s confusing that Netflix has fallen prey to ’blanding’.
This is not a surprise. The brand has stayed sedentary, without much change at an identity level for seven years. It needs to reassess what makes Netflix ’Netflix’ and create an ownable identity that evokes the Netflix of the future, not just the past.
To do this, it needs to think about what its visual identity is communicating to the world. From logo to platform, the brand experience needs to ladder up to meaning above just the content it streams. This meaning frames how consumers understand a brand and is a big driver in affecting behavior. From the shape of the logo to the choice of typeface, everything carries an embedded meaning.
Instilling symbolism at a brand identity level is one of the quickest and easiest ways to frame perceptions – an important tool Netflix is missing. By creating intentional associations through symbols – or, as we like to call it, generating visual metaphorical shortcuts in consumer’s minds – brands create stronger and more memorable connections.
Historically, Netflix was about shortcutting straight to the ‘epic’ experience of cinema in the comfort of your home – a novelty at the time of launch. But with streaming now so deeply embedded into our entertainment habits, the option to press play on instant blockbusters no longer holds the same thrill. Endless content is no longer a selling point, it is expected.
And, as a brand trying to shape a future beyond the consumer viewing habits it has created, its direction is muddled. Originally formed as mimicking the cinematic experience, Netflix soon began to expand its offerings and pivoted to streaming humorous, easy-to-digest content. Honing its marketing strategy to amplify this, memes and a comedic tone-of-voice worked well for Netflix as it built its streaming empire. But now, as it begins to push out more high-caliber cinematic content, the tone of its light-hearted advertising strategy falls out of line with a growing pedigree of Oscar-nominated films.
A brand that succeeds is a brand that transforms itself alongside its consumers. Most brands need to strike a balance between looking back and forwards. Netflix holds a key role in consumers lives, but as it starts to lose relevance it’s essential it reassesses what role it wants to hold moving forward. If it doesn’t secure its position, it risks being left behind in an ever-competitive landscape. Content (and choice) can only get you so far; your brand needs to be a destination if it’s to truly thrive.
Molly Rowan-Hamilton is strategy director at BrandOpus. For more Marketing Secrets of Fast-Growth Brands, check out The Drum’s latest Deep Dive.