Thanks to a partnership announced last week, Walmart will start selling Netflix merch through a custom Walmart page: Netflix Hub. The partnership will focus on apparel, music, toys and games and will be available online only (no Netflix Hub shelves in brick & mortar). We’ve previously seen Netflix partner with retailers and even launch its own online store earlier this summer, but this is Netflix’s first dedicated storefront with a massive retailer.
Reed Hastings wants more buzz. In an interview with the WSJ, Netflix’s CEO, Reed Hastings, said he doesn’t expect e-comm to be a significant revenue source. Instead, “the reason we’re doing [it] is to help the subscription service grow and be more important in people’s lives.” Netflix is also launching Netflix Fan Select via the Hub which will allow viewers to vote for merchandise they want from specific shows and Walmart will bring them to market.
Taking a page out of the Disney playbook, Netflix is going after the merchandising + licensing pillar of the flywheel of synergy. Netflix is hoping that its Stranger Things Bitty Boomers, Cocomelon plushies and Cobra Kai headbands help customers build brand love for Netflix IP and increase their customer lifetime value through better retention and ancillary revenue streams.
1 + 1 = 3 or 1.5? This is a solid, logical step but there is something Netflix still needs: Big Swinging Pics (BSPs).
Star Wars, Marvel, Pixar and OG Disney (like Mickey, Minnie, Goofy) are BSPs. They are powerful brands that host a universe of stories and characters. These universes are key because they give Disney the power to encapsulate generations of customers as stories build upon previous stories. Iron Man/Thor/Avengers fans generally overlap with Shang-Chi fans even though the movies aired 13 years apart. Mickey’s flywheel of synergy keeps rolling.
Stranger Things, Cocomelon, Cobra Kai, and Squid Game are all incredible titles but have disparate fanbases. Squid Game dominates the cultural zeitgeist today, but could very well disappear by Thanksgiving. Even with a Squid Game 2, Netflix users will not be drawn to engage with other titles like Bridgerton or The Witcher. They do not pay IP dividends like Disney’s BSPs. (Amazon is certainly trying with Lord of the Rings and Bond; with No Time To Die’s release, I would bet the Broccoli family give in to a few universe spin-offs and TV series)
A for effort. Still, I am a huge fan of how fast Netflix is trying new things like retail and gaming. It’s like that quote from Michael Jordan: “I can accept failure, everyone fails at something. But I can’t accept not trying.” Hastings and Sarandos have set a culture of testing new growth engines and placing big bets on IP. I only pause because they are still a long way from setting up a flywheel of synergy close to Disney’s.
Over the weekend, I saw this toy stand at LAX. I don’t remember the last time there was a Mickey or Minnie specific movie but here they are, top shelf. These characters remain timeless so long as Disney’s BSPs keep rolling and that’s where Netflix needs to be.
Other Highlights
Disney/Hulu
Kelly Campbell, former Hulu President, leaving to become President of Peacock. Maybe with Kelly at the helm, Peacock will find better taglines…
M&A
IAC acquiring Meredith Corporation’s National Media Group for $2.7 billion
Venture Deals
SpringHill, Lebron James’ production co., raises new round from RedBird Capital, Epic Games and Nike at $725M valuation
Who’s Hiring💼💻
Trying out something new…will highlight interesting roles I hear about in the Media/Entertainment space
Discovery - Senior Manager, Subscriber Engagement
HBO Max - Senior Manager, SVOD Subscriber Retention
WarnerMedia - Director, Studio Business Ops
AMC - Director, Streaming Finance (talked with recruiter yesterday, lmk if you want intro)
Walt’s Thoughts
🦧🍻
What I’m Streaming…
Stumbled upon this comedy on HBO Max. I’m 5 episodes into Season 1 and really enjoying it. It’s a crisply written parody on today’s internet/pop culture generation.