Brands in Binge-Land
Netflix’s Ad-venturous Shift and Max’s Makeover Mayhem
In a world where binge-watching is the new normal, Netflix and Max (formerly HBO Max) are battling for our eyeballs and dollars. These streaming titans are taking bold leaps in branding and business strategy — but will their gambles pay off?
Once upon a time, Netflix’s ad-free experience was the jewel in its streaming crown. But as the company matured, it realized that ads were the key to unlocking new business objectives, especially as growth began to slow. Netflix throwing caution to the wind and embracing an advertising tier is a plot twist worthy of a Hollywood blockbuster that discovered its true brand value was no longer in being ad-free but in meeting the needs of its large customer base, which reached a total of 232.5 million subscribers. Now that company’s growth has settled into a new, more mature phase with a 5% annual growth rate, and it turns out the advertising-supported model looks like it can be vital to Netflix’s future growth strategy. Even though an ad-supported tier challenges the notion that ads are antithetical to the Netflix brand, like a chameleon changing colors, Netflix proves that adapting to the environment is the key to survival in the cutthroat streaming jungle.
Meanwhile, Max is taking a gamble on a shiny new rebrand, shedding its HBO Max identity and embracing a more family-friendly vibe. This metamorphosis is driven by the desire to grow its customer base and consolidate its position in the streaming market. However, one must wonder if this drastic transformation is based on solid evidence or merely a shot in the dark. Max’s decision to rebrand in the hope of catapulting them to new heights can also leave them at risk of floundering in a sea of confused customers. As Max attempts to navigate the crowded waters of the streaming world, it’s crucial to examine whether they’ve done their due diligence in understanding the impact of their brand on their business model. It’s a delicate balance between reinventing oneself and staying true to the core values that made them successful in the first place. Having been a part of many rebrands, there lies so much risk when a rebrand is done for marketing rather than the business model, as Bud Light recently portrayed.
For Max, a rebrand may risk alienating loyal subscribers who have come to associate the HBO brand with premium, high-quality content. On the other hand, shifting to a more family-friendly image could open the door to a wider range of viewers, boosting their market share and revenue. This begs the question, does Max do that, or does a clearer feature need to be introduced to drive the underlying goal of bringing more families to their service? With the streaming industry becoming increasingly competitive, Max needs to differentiate itself from the pack. But the question remains: will the rebrand be meaningful enough to drive new growth for the company, or will it simply cause confusion among current and future customers?
As Netflix boldly ventures into the world of advertising, it’s clear that the company is prioritizing profitability over popularity. Netflix’s ad plan, costing $6.99 a month, makes more money than its standard plan, costing $15.49 monthly. So far, customers on the paid plan are so happy that Netflix is improving the ad plan’s quality to sign up even more users, which makes sense because they’re making more money off those consumers. As it turned out, shedding the “no ads” mantra might’ve been the key to unlocking their next growth stage and keeping their throne in the streaming kingdom. With the increase in competition from so many studios trying to break into the streaming space and trying to run the Netflix playbook, Netflix can now trade in its letterman jacket for a business suit, focusing on boosting revenue per user and expanding its audience.
“It’s very rare that you get a chance to have a second first impression,” said Pato Spagnoletto, global CMO for WBD Streaming.
In contrast, Max is pinning its hopes on the biggest marketing campaign in company history to support its rebrand. As the new kid on the block, Max needs a second first impression to make a mark in the streaming world. The marketing push for Max’s debut on May 23 is gaining intensity, with the company set to embark on its biggest campaign in history. Kicking off a two-stage marketing campaign to pique people’s curiosity about Max before building an emotional connection to the brand in the weeks leading up to the launch. Max intends to make people fall in love with the brand as much as the content.
To make this marketing blitz worthwhile, Max must ensure that its content lineup and user experience live up to the hype. Max’s rebrand as a family-friendly platform opens up the possibility of attracting a broader range of viewers. Still, it also means they’ll be vying for attention in an already crowded space. If subscribers are enticed by the new branding but find the platform lacking in substance, the rebrand could backfire, with disappointed users seeking their entertainment elsewhere. Pinning the future of their growth to a rebranding strategy is risky as it has a small chance to propel them to new heights in the streaming world but a higher chance that it’ll set itself adrift among a sea of similar platforms, struggling to make a lasting impression. The success of this bold move hinges on their ability to execute the rebrand effectively, which can let them connect with their audience on a deeper level, but that will require a lot of upfront marketing dollars with no guarantee of success.
In this high-stakes game of streaming supremacy, Netflix and Max are navigating uncharted waters as they explore new frontiers in branding and business models. Will Netflix’s foray into advertising be a calculated risk that pays off? Will Max’s rebranding gamble raise more questions than answers? In the end, Netflix’s decision to embrace advertising might demonstrate that, sometimes, even the most firmly held beliefs need to be upended for the greater good of a company’s growth. On the other hand, Max’s rebranding gamble highlights the importance of understanding one’s business before drastically changing one’s brand to grow an audience. As we watch these titans of streaming battle it out, it’s clear that the industry is as unpredictable as the plot of your favorite thriller. In the high-stakes world of streaming, with evolving brands, audience strategies, and business models, Max and Netflix prove that you either adapt or die in the streaming game.
