The Echo-nomist

Waiting for some official Stranger Things merchandise? Don’t worry, Netflix has your back!

Netflix has enjoyed sweeping success with some of their original tv shows (from ‘Lupin’ to ‘The Witcher’) and movies (from ‘To all the Boys’ to ‘Extraction’). Some of them are even award winning like Stranger Things and Money Heist. They receive a lot of appreciation from fans worldwide. But one thing that the fans are looking for, but still haven’t found, is Official Merch.

How much would you love an original Scoops Ahoy uniform from Stranger things or the orange jumpsuit and Dali mask from Money Heist?

Netflix identified such a demand in the market and thought why not? So they collaborated with Shopify to make an e-commerce website of their (netflix.shop) own, to sell merch. Their newest category: Netflix original merchandise…

As if we didn’t spend enough time on Netflix already.

In the previous quarter, Netflix reported a slowdown in their growth rate from their pandemic boom. They were just short of 4 million new subscribers, while they added 16 million new subscribers in the same quarter of 2020. The addition of fewer subscribers came as they faced fierce competition from PrimeVideo and Disney+ and reached subscription saturation.

Netflix’s subscriber base expanded massively during the pandemic. However, it’s expected to slow down because the people remaining are tougher to woo. They need to find more sources of revenue, along with new subscribers. Its competitors- Hulu and HBO Max- rely on commercials to earn money, other than subscription fee. Disney, on the other hand, is big on toys and merch.

Netflix decided to go the Disney way. They pulled a few strings and now they’re selling merch. It’s only available in the US as of now, but eventually they will expand their shipping options. The lucky shows that were chosen for the launch are Yasuke (an anime) and Eden. Up Next: merch for Lupin, Stranger Things and Money Heist.

This isn’t their first experience with merchandise. After “Bridgerton” gained popularity amongst viewers, Netflix started selling sweatshirts inspired by the show for $59, in collaboration with Phenomenal (a clothing company). “To All The Boys I’ve Loved Before” inspired clothing and accessory collaborations with H&M, and makeup kits at Sephora. They also introduced Mattel dolls and a Walmart plush toy related to the animated show, “Over The Moon,” to cater to their younger audience.

Earlier, they had to share the profits with H&M, Mattel or the company they collaborated with. Now that they’re selling it on their own platform, they get all the proceeds from sale.

How successful will this new venture be for Netflix?

It’s a little too soon to determine that.

This is similar to Disney’s “merchandise licensing and retail” segment. Disney’s merchandise operations are massive as they cover a diverse range of product categories. The most prominent ones include: toys, apparel, games, accessories etc. They license characters from their movies, tv shows and other properties for use on third-party products in these categories and earn royalties. Mickey and Minnie, Frozen, Star Wars, Disney Princess, Avengers, Spiderman, Toy Story, Winnie the Pooh, Cars and other Disney classics create an appeal for their products. They earned $4.1 billion from merchandise licensing and retail in a pandemic year.

Netflix’s aim is to create a brand value as great as Disney’s in this business. Obviously, this is not easy and it will take years to build such a reputation. They have to transform their brand image from simply being a streaming service to an entertainment house with a loyal fan following to monetise. Other than well researched shows and characters, marketing of merch should do the trick- it just has to be appeal to right audience and develop an emotional connect with the fans. Slowly, but steadily, they need to introduce more fandoms and products other than clothes.

If they’re so inclined towards Disney’s way of doing business, their next step can be video games. How cool would it be to play Dungeons and Dragons with your characters as Mike and Dustin. Or to plan the biggest heist in history with your friends and try to pull it off (only in the game of course).

We’ll know if it’s successful when they don’t rely solely on subscription dollars.

Disney property has its own value. It’s a generation long ride. If Netflix is able to achieve that status, they’ll be chillin’.

Till then, happy binging and shopping!