Netflix Strategy is Right and Wrong

Netflix owns movies-by-mail. They might make a lot of money today, but are not the future. Netflix has wisely bet on streaming as its future. And they have wisely made an aggressive move to be first in the mind in order to dominate the new streaming-video industry. But Netflix made a critical error by using the same name on its new streaming business as it does on its existing mail business. It might be logical to take a trusted and loved brand name and extend it from one business to the next. But it doesn’t make marketing sense. As time goes, each business will compete and clash with each other. What Netflix needed was a new brand name for streaming not mail.