Marketing With Spindles 📀
How Netflix turned a high-profile video into a golden marketing opportunity—and in the process, learned what a DVD spindle was.
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The recent news that Netflix would be finally shuttering its legacy DVD business, a business that Netflix publicly showed that it wanted out of way back in 2011, isn’t really so much of a surprise.
There is a case that Netflix’s move will likely leave a whole bunch of movies inaccessible, but it probably will be best for Netflix as a business, and as has been shown time and time again, capitalism always wins over preservation.
But I’d like to take a moment to highlight an important thing that Netflix did in 1998. It reacted quickly to market demand to build a savvy piece of marketing for itself in the form of Bill Clinton’s grand jury testimony at the behest of independent counsel Ken Starr. This video proved highly buzzy, despite the fact that, as I note in the piece I wrote about it a few years ago, it’s actually pretty dry viewing.
But Netflix, a brand-new company at the time, leveraged interest in the video by selling it for just two cents a piece, as a loss-leader.
“By offering the complete Clinton testimony on DVD for only $.02, we believe we are making it possible for virtually every DVD owner to easily review this material and form their own opinion,” Netflix cofounder Marc Randolph said of the release.
The company had to rush to make this happen—and word is that at least some of the DVDs distributed via the mail were a bit more NC-17 rated than the testimony, which, while featuring somewhat graphic descriptions that would lead to a sitting president’s impeachment, was certainly not porn. Nonetheless, the stunt earned Netflix 5,000 new customers for less than $5,000.
Apparently, this was so new in the history of the DVD that Randolph said that the first time he ever saw a multi-disc spindle—a device that became common in every home with a CD burner just a couple of years later—was when he was trying to distribute the grand jury testimony to curious watchers.
Presumably, Randolph and his cofounder Reed Hastings got very acquainted with spindles over the next decade, as his company’s DVD-driven business model took off.
» Wanna learn more? Check out our piece, helpfully titled “Impeachment Growth Hacking.”