Netflix has had a rough decade so far. Beset by increasing competition from Amazon, Apple, and cable on-demand services—and hindered by its own awkwardness when it proposed changing its pricing scheme—the company and its CEO Reed Hastings were taking some lumps. But with its latest innovation, expanding into the production of original content, Netflix may be heading back into consumers’ good graces.
The first signs of progress came with House of Cards, a critically acclaimed series, starring Kevin Spacey and Robin Wright, that was available only through Netflix. Then it promised to bring back the fan favorite Arrested Development to give viewers an update on the Bluth family.
But Netflix also has learned that its adult consumers can be fickle. When faced with company policies that they don’t like, adults will switch to another entertainment offering. Children, in contrast, have fewer options and less room to switch. Hence, Netflix’s latest original content offering comes in cooperation with DreamWorks Animation and explicitly targets youthful audiences.
The Turbo: F.A.S.T. television series will run, following the release of an animated film about the same character (a snail who gains super speed after being exposed to a freak accident). The deal also comes after another agreement between DreamWorks and Netflix, in which Netflix purchased the rights to show some of DreamWorks most well-known titles. Around the same time, it also inked an agreement with Disney to access its library—including its recently acquired set of LucasFilm movies.
By appealing to children and their families, Netflix believes it can achieve new levels of customer loyalty. The children themselves are unlikely to switch, because Netflix offers them easy access through their parents’ iPads or their Wii consoles. Furthermore, few parents are willing to incur their children’s wrath by cancelling their Netflix subscription, when Netflix offers those children some of their favorite shows and movies.
Source: “Dreamworks Animation to Create Netflix’s First Original Kids’ Show,” Advertising Age, February 12, 2013