Tuesday, August 31, 2004

Why no advertising on the Red Envelope

Fool.com recently suggested several ways Netflix could enhance their business. One of those ways is exploiting the red mailer as an advertising vehicle, which reminded me of this old article in which Reed Hastings, Netflix CEO, addresses (pardon the pun) that very issue:

By David Gardner and Tom Gardner
October 29, 2003
David and Tom Gardner recently interviewed Netflix http://quote.fool.com/uberdata.asp?symbols=YHOO(Nasdaq: NFLX) CEO Reed Hastings on The Motley Fool Radio Show on NPR. This is the second of four parts.

TMF: Reed, about your company's red envelope. They are an increasingly recognizable package to U.S. postal workers. Hundreds of thousands of customers open these up each month with delight. Our question for you then, on behalf of some shareholders who may think you are leaving money on the table, when will you sell space on those red envelopes to outside advertisers?
Hastings: Well, if you look at some of the great brands that have been created, Starbucks (Nasdaq: SBUX) is an example. A lot of people would like to advertise in the Starbucks store, but they have been very strong about creating a unique space and a unique brand. That is our philosophy also. We have got a very clean brand. We have got a brand that really represents something special and we don't intend to expand into advertising, no matter what the associated revenues, and it is really focused on, again, creating this pureness and this great brand. We think that is the right strategy to build the most valuable company.


  1. Netflix does sometimes advertise new releases on the inside flap of the envelope. I remember seeing Something's Got to Give and Big Fish earlier this year.


  2. I don't recall seeing anything like that on my mailers. If you see anything unusual like that, could you email me a scan? Thanks.