As the major online streaming services develop and launch original content, one of the most interesting tactics has come from Netflix, which released all 13 episodes of its well-received series House of Cards on a single day, Feb. 1.
So everybody just signed up for a free trial, watched the whole series over the weekend and canceled, right? Actually, no, said Netflix CEO Reed Hastings and CFO David Wells in their quarterly letter to shareholders yesterday.
“Our decision to launch all episodes at once created enormous media and social buzz, reinforcing our brand attribute of giving consumers complete control over how and when they enjoy their entertainment,” they wrote. “Some investors worried that the House of Cardsfans would take advantage of our free trial, watch the show, and then cancel. However, there was very little free-trial gaming — less than 8,000 people did this — out of millions of free trials in the quarter.”
Is Netflix really that sticky, or is this a case of people being too lazy or forgetful to cancel? Probably a mixture of both.
Netflix added more than 3 million new subscribers in the quarter, and it’s planning to continue the approach with additional content, including its exclusive release of the fourth season of Arrested Development — all 15 episodes at once — on May 26.
One of Netflix’s competitors, Amazon, is trying to create buzz of its own by releasing all 14 pilots of its original comedy and children’s series for free streaming on Amazon Instant Video. The company is seeking customer feedback as it decides which shows to produce.
Amazon’s pricing model differs from Netflix’s approach, offering a portion of its catalog for no extra charge to Amazon Prime members (who pay $79/year for a package that also includes free shipping and Kindle book rentals). Amazon also offers a la carte streaming movie and TV show rentals and digital purchases.
Last quarter, Netflix released a somewhat flawed chart in which it pointed out that Amazon Prime offered only 73 of the top 200 movies and shows on Netflix. For the record, Netflix says Amazon is now up to 74.