Why Netflix is Your New Best Friend

To say that I like routine is an understatement. My lovely wife often says I’d eat the same meal every night and be happy. While that’s close to true, I’m quick to point out that I’m also thrilled to come home to the same woman every night… predictability has its advantages.

Apparently this isn’t the case in the world of marketing, where the goal is to reach people who are presumably more likely to try something new and are open to switching brands.

Recently, the A&E cable channel canceled the program “Longmire.” The show ran for three years and was based on the crime mystery books by Craig Johnson. The protagonist is Sheriff Walt Longmire, a brooding man short on words but long on character traits such as honesty and perseverance. The show was so popular that it became the second highest-rated program for A&E, behind “Duck Dynasty.”

The problem is that the show is a hit with the wrong crowd…

The average age of viewer for “Longmire” is 60, well outside of the 25- to 54-year-old demographic sought by many advertisers, and light years away from the hip 18- to 49-year-old group. This put “Longmire,” as a product, into a bind. The show had a very high following (5.6 million viewers), but it didn’t draw advertising dollars. A 30-second ad during “Longmire” cost roughly $31,300, while a commercial during “Mad Men,” with less than half the viewers at 2.5 million, cost more than twice as much, $69,500.

The difference is that “Mad Men” attracts 1.4 million 18- to 49-year-olds and 1.7 million 25- to 54-year-olds, while “Longmire” pulls only half as many in each age group. Marketers love these age groups because they are populated with people who are open to receiving the advertising message — “buy our stuff.” Apparently, as we move closer to 60, we get set in our ways.

I must have peaked early. As I said, I like a routine… and I happen to like “Longmire” as well.

But there is a solution for “Longmire” fans; watch programs On Demand. This is the entire premise of Netflix. The streaming video website has spread like wildfire by offering not only movies, but also entire seasons of famous and even not-so-famous television shows.

By using Netflix, viewers can “binge” watch programs, consuming entire seasons in a couple of days, which crams together cliffhangers from one week and resolutions from the next. When popular programs like “Longmire” get kicked to the curb because they don’t draw enough advertising dollars, it’s a sure bet they will pop up on a video streaming service where the goal is to drive membership dollars. Simply sign up and watch all you want.

For the average 60-year-old, plus a few of us who are younger but happen to like some of the same programming, Netflix could become a new best friend.

Think about this group for a minute. Sixty-year-olds were born almost a decade after WWII. They’re smack dab in the middle of the boomer generation, and changed every part of life as they aged. While they might not be the best audience for the typical television advertiser, they’re still an exceptionally large, and therefore powerful, generation.

In an effort to generate more ad dollars, A&E might be shooting themselves in the foot by pushing an influential group off of cable television. In their search to find the programming they want, these boomers might find a lot of other content they like, and realize they neither need, nor want, cable TV… at all.

I wonder how many television ads can be sold when no one is watching.

Rodney

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Categories: Markets

About Author

Rodney Johnson works closely with Harry Dent to study how people spend their money as they go through predictable stages of life, how that spending drives our economy and how you can use this information to invest successfully in any market. Rodney began his career in financial services on Wall Street in the 1980s with Thomson McKinnon and then Prudential Securities. He started working on projects with Harry in the mid-1990s. He’s a regular guest on several radio programs such as America’s Wealth Management, Savvy Investor Radio, and has been featured on CNBC, Fox News and Fox Business’s “America’s Nightly Scorecard, where he discusses economic trends ranging from the price of oil to the direction of the U.S. economy. He holds degrees from Georgetown University and Southern Methodist University.