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Netflix raises prices on standard and premium plans

Access to high speed internet and affordable media streaming devices has led to ever growing demand for media streaming services.  Consumers have flocked to these services in search of both new original programming as wells as libraries of old films and TV shows. The Covid-19 pandemic  has led to an even stronger surge in the utilization of streaming services.

Netflix has once again raised its subscription prices for streaming services. The decision of Netflix to once again raise the prices of its standard and premium plans to $13.99 and $17.99 per month, respectively, reflects a common trend in the streaming industry. [https://www.cnbc.com/2020/10/29/netflix-raises-prices-of-its-standard-and-premium-monthly-plans.html]

The timing of the decision to raise subscription fees appears to be timely. Demand for streaming services has been high this year due to COVI 19 related restrictions that have kept people in their homes for most of the year. Consumers understand that producers of content need money to produce quality original content.

However, he decision of Netflix to raise prices raises some questions. My concern about the streaming service industry is not that  the prices charged by each service provider  for its services. The problem is that there is an ever-growing number of streaming service providers for consumers of streaming services to choose from. Each of those providers has its strengths and weaknesses. It is believed, for example, that Netflix  has the best service for original content. Hulu, on the other hand, is highly praised for its TV shows. Will it ever be possible to have a single platform where a consumer of streaming services can design and purchase a package of content of her own choice, instead of having to pay monthly subscriptions to several streaming service providers for packages most of whose catalogue is of no interest?

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[summerhousejulian]

Consumer Habits Evolving

This collection of articles examines consumer trends during the first 6 months of the year 2020. The period coincided with the outbreak of the Corona Virus pandemic. https://www.marketingdive.com/news/consumer-habits-evolved-2020-what-could-stick/580826/

The pandemic has brought very fundamental changed in the behavior of customers. The changes   in consumer  trends that the pandemic has caused include increased reliance on e-commerce and increased pressure on corporate brands to be responsive to social issues.

The change in consumer trends discussed in the articles that that I find most intriguing is the growing support of many consumers for social justice movements like Black Lives Matter, movements to protect the environment and the MeToo movement. As the article by Dianna Christie notes, while support for social justice movements is very high in the country, it is by no means unanimous among consumers. While support for social justice is very high among minorities, young people, and LGBTQ community, only 31% of Gen Xers and 22% of Boomers expect corporate institutions  to take a public stand on social issues.

The bottom line is that there is a demographic divide on social issues in this country. The question for a marketing strategy professional is: How does a brand navigate the minefield that the consumer landscape in this deeply divided political atmosphere represents? How does a brand communicate empathy to victims of racism without alienating consumers who are comfortable with the status quo?  How does a brand address the problem of the existential problem posed by climate change while at the same time it communicates empathy to communities that depend on fossil fuels for their livelihoods? Or must brands take a stand on hot button issues, regardless of consequences to the bottom-line.

[summerhousejulian]

Levi’s Reuse/ Resell Method A Success

James Bruntley’s article reports on a new business of the Levi company. The author rightly observes that consumers are prioritizing and rewarding good corporate behave, including  sound management of the earth’s resources. The new  marketing strategy is to purchase, repair, clean and resell used jeans, with the aim of using  this arm of the company to drive up sales of new jeans.

Perhaps the biggest positive of this reselling method may be how it allows companies to perform well digitally.  With the advent of Secondhand, however, the company can really drill down into a consumer's habits, preferences, and shopping frequency (outside of what it's already able to gather online and through stores) and build a truly robust omnichannel operation.   

The decision of Levi to join this industry should be applauded. Levi is a well known and liked brand with a significant following. Some consumers have until now had negative attitudes towards used merchandise, including apparel. The decision of the company to buy and resell used apparel will without contribute to improving consumer perceptions about purchase of used merchandize.

The secondhand apparel market is growing and is here to stay. 64% of women bought secondhand items in 2018.  The market hit $24 billion in 2018. Sales in the total secondhand apparel market are expected to more than double to $51 billion by 2023.

(https://www.investors.com/news/technology/retail-industry-shaken-up-used-economy/)

The overwhelming fact is that secondhand selling allows companies to control the market on their product rather than have other resellers set prices.

However, I have some questions or concerns about this marketing strategy : Does the trend towards social acceptance of the used of used merchandize, and used apparel, in particular, have some hidden economic costs? Does it draw customers away from retailers of new merchandize? Does it kill the jobs of workers who would have made the new apparel that used merchandise is replacing?