Netflix and the drug dealer’s strategy…
For many years, it seemed like nobody actually bought Microsoft’s operating system and programs: instead it was pretty much standard practice for the shop were you bought your PC to install Windows and Office automatically, and failing that you could borrow the diskettes or CDs from work or a friend. Obviously, this was not true — the company was minting money blazingly fast back then — but the availability of its programs was also far higher than what regular, paid distribution can achieve.
Whether or not it was a deliberate strategy, it worked out very well for Microsoft. Playing the long game of allowing huge numbers of people to access its products for free meant that eventually we became so accustomed to their use, that we couldn’t function without them, so that when the company gently began tightening the screws with each new update, we decided it was easier to pay for them. I call this the “drug dealer’s strategy”: the first few jabs are free, until you get hooked and pay to keep using.
Netflix took the same approach, achieving huge growth. In 2017, the company was still unabashedly tweeting “love is sharing one password,” inviting households to pay for a single account, and then allowing children to continue using their parents’ account when they became independent or for friends to allow others to use their passwords.
