Netflix à la française – Musings on an empire

A recent essay for Foreign Affairs, “The State of the State”, criticises Western governments for failing to innovate. The authors make an unfavourable comparison with China, which, though still autocratic in nature, has at least looked abroad for ways to make the state work better (if only in a necessarily limited scope). One doesn’t need to look much farther than France to see what happens when the state fails to innovate. President Hollande has done his very best to inculcate a backward ideology of indolence among its workers, but the negative effects of over-regulation have been present in France for some time. One major step that is in drastic need of undertaking is the simplification of France’s opaque labour laws, the code for which runs to 3,492 pages, according to a recent article in The Economist. A stark and laughable example of the limits of such a code is elaborated on below,

“[The code] impose[s] rules when a firm grows beyond a certain limit: at 50 employees, for example, it must create a works council and a separate health committee, with wide-ranging consultative rights. So France has over twice as many firms with 49 staff as with 50.”

France of course also has a strong sense of state oversight and sponsorship when it comes to the media industry. L’exception culturelle has long dominated discourse about what content is appropriate and designated to be high art. Such safeguarding of domestic product has been a thorn in the side of late of the EU / US trade partnership, threatening to derail negotiations. Some have argued that such promotion of homemade productions serves not to diminish foreign imports – a love of Americana has not subsided in France – but rather only to preserve a niche. Regardless, argues a recent editorial in one of France’s national newspapers, it has left the country’s media sector susceptible to disruption.

Today’s Le Monde newspaper features a front page editorial on the arrival Monday to the country of Netflix. The company announced its plans for European expansion at the beginning of the year. It won’t have everything its own way, though. Netflix will have to adapt to a very different market environment. The Subscription Video On Demand (SVOD) market is well-established, and it will see much competition from incumbents (last year annual revenues for companies based in France providing such services exceeded EUR10m). These incumbents charge little or nothing for their services, relative to the $70-80 a month Americans pay to a cable company to watch television, according to The Economist, which states “Netflix struggled in Brazil, for example, against competition from local broadcasters’ big-budget soaps”. Moreover, current government policy dictates a 36-month long window from cinema release to SVOD. We’ve argued against the arbitrariness of such windows before, for a variety of reasons, but here such policy surely negatively impacts Netflix’s projected revenues. Such projections will be curbed further by stringent taxes and a further dictat that SVOD services based in France with annual earnings of more than EUR10m are required to hand over 15% of their revenues to the European film industry and 12% to domestic filmmakers, according to France24. As well as traditional competition, Netflix also faces threats from OTT rivals, such as FilmoTV. One possible way around such competitor obstacles is the promotion of itself as a complementary service. The New York Times earlier this spring elaborated,

“Analysts say Netflix, which has primarily focused on older content more than on recent releases, could also survive in parallel to European rivals that have invested heavily in new movies and television shows. Netflix in some ways serves as a living archive, with TV shows like “Buffy the Vampire Slayer” from the 1990s or movies like “Back to the Future” from 1985. Such fare has enabled the company in Britain, for example, to partner with the cable television operator Virgin Media, which offers new customers a six-month free subscription to Netflix when they sign up for a cable package.”

Such archive content will come in handy, particularly given that, as Le Monde points out, Netflix had previously sold the rights to its flagship series ‘House of Cards’ to premium broadcaster Canal Plus’ SVOD service Canal Play (which itself is investing in new content). The article hesitates to guess how much of a success the service will be in France – something Citi has no problem in doing, see chart below – instead looking to the music industry for an analogy, where streaming has become a dominant form of engaging with the medium. As in other markets, streaming services have met with increasing success, particularly with younger generations. For Le Monde, the arrival of Netflix will undoubtedly ruffle a few feathers, but the paper also hopes it will blow away the cobwebs of an industry that has become comfortable in its ways; it hopes the company will provide a piqûre de rappel (shot in the arm) for the culture industry. Netflix’s ingredients – by no means impossible to emulate – of tech innovation, easy access and pricing and a rich catalogue, should be a lesson to its peers. The editorial only laments that it took an American company to arrive on French shores for businesses to get the message.

Citi foresees huge takeup of Netflix in tech-savvy UK, but relative to other territories France is expected to see strong growth too in the coming years

UPDATE (16/9/14): TelecomTV reported this morning that Netflix has partnered with French telco Bouygues. The company will offer service subscriptions “through its Bbox Sensation from November and via its future Android box service. Rival operators are refusing to host Netflix on their products”.

Could sponsors hold the key to stopping racism on the terraces?

So Lance Armstrong (under)stated recently that he’d had a ‘difficult couple of weeks’.

Just to recap. In the last fortnight or so (and despite his protestations of innocence), Armstrong has gone from being a much lauded athlete who overcame serious illness to dominate one of the world’s toughest sporting competitions to a discredited drugs cheat and stripped of all his titles.

A ‘difficult couple of weeks’ by anyone’s standards.

Since the evidence against him grew and former team-mates spoke out about his role in the doping culture in the US Postal team, the position of sponsors such as Nike has shifted. Where initially they stood by their man, they ultimately decided to cut the relationship, citing that he had “participated in doping and misled Nike for more than a decade“.

It’s one of the inherent dangers of sponsorship.

While your endorsee is sweeping all before them you are associated with success and glory. But as Tiger Woods sponsors found out a few years ago, if that star misbehaves your brand is associated with someone getting the headlines for all the wrong reasons.

The news that cycling has/had a doping problem is both unsurprising and depressing.

Unfortunately, the same can also be said for the experiences of the England U21 side in their recent play-off in Serbia.

Racism in football

Having been subjected to racist chants throughout the game, things came to a head at the final whistle when Danny Rose was sent off for kicking the ball into the abusing crowd and punches were thrown as players and coaching staff jostled their way towards the dressing rooms.

Racism is a blight on society. It exists in the UK and while it is not tolerated in public arenas, the economic downturn hasn’t helped our natural tendency to tribalism when things are tough.

For nations that haven’t experienced the levels of immigration of other ‘races’ that the UK has, attitudes to people with different colour skin are not as liberal. Let’s not forget that it wasn’t all plain sailing and painless for us to get to where we are.

Terminology that was common just a couple of generations ago is now taboo. TV shows of the 1970’s wouldn’t even be considered now. And footballers in the UK used to have to run the gauntlet due to their skin colour as recently as the 80’s and indeed, incidents are still being reported in 2012.

None of this excuses what happened in Kruševac and nor does it excuse the lenient approach footballing authorities have taken with racist incidents in the past. In a multi-billion pound industry, fines of tens of thousands of pounds have little impact.

FIFA and UEFA are keen to cite the power of football to change society when awarding tournaments to countries like Ukraine and Qatar but plead impotence when it comes to topics like racism.

The natural indignation in England has lead some to suggest that we should pull out of international tournaments to make a point. Such an action would most likely be met with champagne corks popping in Nyon and Zurich, and would only serve to further dilute our voice in the global game.

The Serbian FA could have offered UEFA a get out of jail card. A statement recognising the monkey chants, apologising to the FA and footballing family and a clear plan of action to ensure it never happens again would have enabled the games rulers to give them a slap on the wrist.

Yet the Serbian FA refuted clear evidence of racist chants and stated that any claims to the contrary were malicious.

‘FA of Serbia absolutely refuses and denies that there were any occurrences of racism before and during the match at the stadium in Kruševac. Making connection between the seen incident – a fight between members of the two teams – and racism has absolutely no ground and we consider it to be a total malevolence.‘

Had they sent a letter saying ‘Fuck you! We did nothing wrong and we’re not changing!’ their attitude couldn’t be any clearer.

And in doing so they batted the ball firmly into UEFA’s court making the question very clear.

Do UEFA believe there was racism at the game and if so, do they consider it acceptable?

Driving behaviour change

Behaviour change and persuasion are all about understanding what motivates of the people you are trying to influence. This means putting your own motives to one side for a moment.

In other words, if we want UEFA and FIFA to impose stronger penalties for incidents of racism we need to understand what influences them.

And let’s be honest, British indignation has never kept them awake at night.

Much higher on the list of priorities are the many sponsors who provide a huge chunk of the money that powers the multi-billion pound football industry.

Just like Nike and Lance Armstrong’s sponsors, FIFA and UEFA’s backers (which include brands like Coca-Cola, McDonalds and Adidas) have a rare opportunity to make their opinion on an unsavoury topic clear.

No brand wants to be associated with racism and upsetting the sponsors is something the footballing authorities do not tolerate. Just ask Niklas Bendtner who was fined £80,000 for showing his Paddy Power lucky pants during EURO2012.

Compared to the fines given to national associations for incidents of racism, it seems rather excessive.

Let’s face it, for all the anger,  griping and T-Shirt protests in England we simply don’t have the clout to demand action.

The sponsors are the ones with real power to influence, and maybe only a rebuke from the people who line their pockets will make finally FIFA and UEFA start taking racism in football seriously.

Turning two negatives into something positive

We all know that catching cancer early can improve our chances of survival. For some charities, such as Coppafeel, the primary aim is to encourage people to know their body and get checked out as soon as they suspect there may be something wrong. Yet our inherent behaviour means we often put off seeing our doctor.

The reasons for stalling are varied, from wanting to ignore reality, a dislike of doctors and hospitals to simply putting it off until tomorrow.

One of the barriers is that you can’t get to see a doctor immediately. You have to book an appointment and then organise your life around it.

All of which makes the Get to Know Cancer pop-up clinic initiative in the Centrale Shopping Centre in Croydon such a great idea. Shoppers can pop in and ask questions to specialists and nurses from the Royal Marsden and Cancer Research UK (for whom Zeitgeist recently did a half marathon – sponsorships still kindly accepted).

Why we like it

It’s obvious to anyone strolling through a UK town that the economic downturn has lead to a depressing number of empty properties along the high street.

The most recent high profile closure was JJB Sports who went into administration last week with the loss of thousands of jobs. The retailer followed a number of famous names, including Clinton Cards, Blacks, Peacocks and Game to either disappear or be sold off to new owners.

For some, the traditional high street is beyond salvation.

In his new book, Sold Out, the former Iceland and Focus DIY CEO  Bill Grimsey, writes that the high street is “as good as dead already“.

He believes that repeated failures by government, online shopping and the recession have created a perfect storm and lambasted the review of sector by the retail expert Mary Portas as “all a waste of money and resources”.

As for cancer, the consequences of this terrible disease are known to us all, lives taken and lives destroyed.

Saving lives and money

Recognising our natural inertia and the need to get illnesses diagnosed as soon as possible the shop interrupts people and overcomes many barriers. And like all great ideas, it’s simple. Now that it exists, it’s strange to think that it has taken so long for such an idea to be implemented.

Aside from the human cost, cancer costs the state around £11bn a year. So quite apart from the emotional benefit of saving lives, the clinic could save us all money.

Bill Grimsey might be right. The traditional high street may well be gone forever. If it has, our challenge is to find new ways to use the empty spaces left by defunct retailers.

Let’s hope that the Croydon trial is a success and the start of the renaissance.

The birth of ‘anti’ sponsorship?

The way celebrity endorsements normally work is that a brand will identify someone with a high profile who is respected by core consumers and who embodies what the brand is all about, or wants to be all about.

It’s not always as straightforward as it sounds.

Some brands have teamed up with the most unlikely partners, while others have learned the hard way that celebrities are human too and that means they can make mistakes and decisions that you don’t want your brand associated with.

Not what Nike, Gillette et al signed up for

However, some marriages are made in heaven and can even lead to lucrative co-branded products such as the Nike Air Jordan range that was much desired by a young Zeitgeist.

Given how much kudos or harm a celebrity endorsement can do, Zeitgeist was piqued to read that Abercrombie and Fitch had suggested that they could pay MTV to not allow characters from Jersey Shore to wear their brands as the association was damaging.

One of the inherent dangers of being an aspirational or fashionable brand that is not priced to make it all but inaccessible to the very lucky few is that you will be worn by undesirables who want your brand to rub off on them.

This, combined with the modern phenomenon of reality TV shows and the glorification of the minor celebrity with limited talent but a huge thirst for fame, can result in a brand receiving more exposure from accidental off-brand associations than their much crafted paid for work.

It is to mitigate this kind of damage – and to generate some buzz – that Abercrombie and Fitch have made their proposal.

While offering to pay someone to not associate with your brand might be a simple solution and a reversal of the traditional model of paying someone to endorse your brand, it isn’t particularly creative and Zeitgeist can’t help but wonder it could actually be dangerous.

Now that a precedent has been set, will we now see the smarter minor celebrities attempt to ‘extort’ lucrative ‘anti-sponsorship’ arrangements with brands who would want nothing to do with them.

With marketing budgets already modest, we hope not.

Paddy Power’s on to a winner with charity shirt offer

The importance of having a brand attitude.

In categories where the offering is essentially the same, a brand’s positioning and the way it behaves become all the more important as means of differentiating them from the competition.

One such category is online gambling.

In essence, all of the companies offer punters the chance to stake some of their hard earned cash on all manner of sporting and cultural events. The market is extremely crowded and with sites like oddschecker.com enabling gamblers to find the best odds on a given bet, building loyalty can be difficult.

All of which means that acquiring new customers is essential and online bookmakers must stay front of mind in order to be considered. For brands with large budgets, oft-pursued routes include high profile sponsorship, advertisements and idents.

One brand with a smaller budget that manages to maintain a high profile is Paddy Power.

Their novelty bets, early payouts, refunds and risky communications have helped them carve a niche position amongst their rivals. Ranging from the Last Supper reworked as a casino table to a poster seemingly offering odds on which old lady would be hit by a car to sponsoring Tongan rugby player Epi Taion to change his name to Paddy Power by deed poll for the duration of the the 2007 World Cup, their activities are marked by a rebellious streak and a desire to generate as much free publicity as possible.

Their ability to respond quickly to current events helps keep them in the public eye, the poster at the top of the article greeted visitors to Ireland immediately after they’d been knocked out of the World Cup Play-off by France and Thierry Henry’s imfamous handball. The stategy of capitalising on current affairs is as strong as ever has as evidenced by a couple of recent viral activities.

The first was an opportunist game, turned around in under 24 hours, which invited users to ‘slap’ former SkySports pair Richard Keys and Andy Gray. Capitalising on the furore caused by their sexist comments the game was passed around by football fans and feminists alike.

The second is a great piece of activation.

Following the high profile deadline day transfers of Fernando Torres from Liverpool to Chelsea and Andy Carroll from Newcastle to Liverpool, the bookmaker offered distraught fans the chance to trade their old hero’s shirt for a £50 bet.

Better still, the unwanted shirts will then be given to Oxfam and sent to Africa.

That's £50 you're setting fire to there sunshine!

Both activities will have been relatively cheap to implement, but their relevance both to current events and their target audience ensured that they were shared virally, thus saving a fortune in media costs.

Paddy Power’s long history of courting controversy and clearly defined brand personality distinguishes them from their myriad competitors and allows them to continue to engage their audience in such a distinctive style. Each stunt serves to raise their profile in the short term while further reinforcing their brand identity in the long term.

Their behaviour might not appeal to everyone and their stunts often cost them financially, however so long as no one used their £50 wager to bet on a draw after Arsenal went 4-0 up at St. James Park on Saturday, the Irish bookmaker will look back at a couple of weeks of good work courting publicity and living up to expectations.

Merc-antile Hitchhiking

“I woke up as the sun was reddening… I was far away from home, haunted and tired with travel…”

– Jack Kerouac, On the Road

Taking a page from the Beats, brandchannel reported earlier this week on one man’s attempt to hitchhike through Europe relying solely on the good nature of those behind the wheels of Mercedes-Benz vehicles. Found on tramp-a-benz.com, it’s a lovely idea that apparently the brand didn’t instigate and isn’t sponsoring, but has mentioned it on its Facebook page, with almost 3,000 “likes”. (What they are doing is courting Twitter users to race some of their cars in order to win a C-class). It’s a great story that most brands would be extremely envious of; unadulterated, unsolicited brand advocacy and evangalism. The wonderful NotCot site also pointed Zeitgeist to the brand’s Yuletide message, which seems to be exclusively online:

Olympian Deception

Great post by eConsultancy on how brands that have not paid to be official Olympic partners in Vancouver are discreetly – or not so discreetly – cashing in. The Olympics are often under scrutiny for being too strict in enforcing their intellectual property rights on unassuming events and even schools, however some brands clearly try to freeload off of the event.

Sponsored WSJ tears down paywall for 24 hours

In previous articles, Zeitgeist have made reference to quantifying the value of content, especially when things are – ostensibly – “free”. The Wall Street Journal recently removed their paywall for the day, in lieu of Honda sponsoring the site and providing free access to all for a 24-hour period. The headline “Prius recall – brought to you by Honda” must make the schadenfreunde all the sweeter.

An interesting move. It encourages sampling and lowers barriers to entry for users not already signed up to the site; yet those already subscribed to the paper might have felt cheated for paying for content that for a time – albeit a brief one – was free for all.  PSFK has more.