What Netflix Can Teach Us about Sponsorships

What Sponsorship Can Learn from Netflix

On May 25, 1977, my friend, Hudson, stood in line a movie by a young local director.  He was always the first to see films and was great in predicting the hits and flops. He told me this movie would be a huge. (It was Star Wars.)  For years, I relied on his recommendations.  

As a film enthusiast, Hudson hated television due to its formulaic and lightweight programming.  Yet, he eventually succumbed to cable to see more movies at home. I tried to teach him how to program his VCR to record movies, but it always blinked 12:00.  He tried Blockbuster, but got burned with late fees.  

I eventually convinced Hudson to try this new mail DVD rental service called Netflix. Suddenly, he had more recommendations than ever.  (I learned later they were actually coming from Netflix). Today, Hudson - the former TV series hater - is a binge watcher of Netflix original content .

Changing of the Guard 

Netflix has undisputedly disrupted the television industry.  Not that long ago, we were like Hudson - totally dependent on network tv programming, needed VCRs to watch programs on our schedule, and unpleasantly surprised by Blockbuster’s late fees.  Now, we binge watch shows, have on demand access to award-winning original content without interruption, and can watch these things anywhere at any time.

How did Netflix drive this massive shift?  Moreover, how can you apply their approach to success to your sponsorship programs?

Netflix’s Evolution

Netflix has ushered in a number of evolutions.  Twenty years ago, the company began by eliminating a pain point for movie rental customers – late fees.  With each red envelope you gleefully received in the mail, Netflix was quietly amassing and analyzing data. By providing ratings for each rental, you received new rental recommendations. This increased the value of what Netflix offered and helped deepen engagement.  

When the company shifted to streaming, Netflix’s algorithmically driven platform  analyzed viewing habits in real time and instantaneously recommended new shows.  This lead to the behavioral shift and phenomena we call “binge watching.”  

Yet, Netflix didn’t stop there. In 2013, Netflix launched its own vertically integrated production company.  Where cable networks used ratings and advertising dollars to drive show development, Netflix used analytics based on what subscriber’s actually wanted coupled with their viewing habits to create content.

Bucking convention has paid off for the company.  According to The Economist, traditional television viewership has declined while Netflix exceed 7 million subscribers in 190 countries and accounted for 35% of peak internet traffic in American homes.  The company is doubling down on it's current strategy.  Wired reports that Netflix is investing $6 billion into 1,000 hours of original programming in 2017.  

Success is Personal

Translating Netflix’s success to sponsorship relies on building engagement through three factors:  data, content and personalization.  Cable networks use these elements independently to create push based ‘one-size-fits-all’ programming.  Netflix integrates these three things seamlessly to create individualized experiences designed to engage each user and most importantly - influence his/her behavior.  Each Netflix subscriber’s experience is about THEM.  It’s never about Netflix.  

Sponsorship is no different.  Good sponsors collect data about their VIPs - their preferences, pain points, behavioral patterns, buying cycles, preferred content media, etc.  Great sponsors use that data to develop targeted content designed to engage with their VIPs.

Just like Netflix, the best sponsors know the true power of these pieces lie in using them collectively to create highly personalized experiences.  These sponsors know success lies in making everything about the VIP at every stage of the event.  The brand’s sponsorship is the platform that delivers the VIP experience.

Moreover, a highly personalized experiences allow sponsors to employ effective pull strategies.  Engaging VIPs in this way empowers them and allows them to go move beyond basic ‘activation’ and into seeing themselves as partners with the brand.

The Digital Divide

We see the digital divide playing out every day on multiple entertainment devices.  The next time you watch a show – think about the experience.  Are you getting what YOU want or what the network wants you to see?  Then, ask yourself how do you want your VIPs to feel leaving your event.  Push or pull?  The focus on you or them?  You decide.