Writing in BusinessWeek, film critic Roger Ebert last year said that Netflix CEO Reed Hasting’s pricing revamp was clumsily handled, but he gave it a big thumbs up as the right move.
“Yet Hasting’s decision, I believe, was inevitable and realistic,” wrote Ebert. “Video streaming represents the future of Movies on Demand. It’s instantaneous, the overhead is lower, and continuing to mail DVDs is a marketing and distribution approach as obsolete as book rental libraries, the tented circus – or snail mail.”
Netflix has lost its first-mover advantage and is looking less than nimble in negotiations. The market is hot and each of its competitors is making content deals that eat away at Netflix’ uniqueness. Bungled deals with Starz and Warner Bros. that left it with no deals or weak deals have put Netflix in a long-range weakened position.
Sorry Netflix, but the pioneering days of the cheap and easy video streaming deals are done. Heavy is the head that wears the crown. You have a fight on your hands.
Deal Making When the Going Gets Tough
Are you facing motivated rivals in your deal making? Then know this: you are in for a fight. If you and your team are ready for a fight then you have some potential bad mojo. Bottom line: a fight is a good thing.
So, if this is always the same, then what should you always do to manage these circumstances? Here are a few strong recommendations:
Be ruthless about the preparation. Insist on giving all of the data to all members of your team as early as possible. This includes a dossier on the target company, a profile of all participants in the buying process, and a copy of all communications regarding this deal.
Pick your team early. The team will shape the story, the key pitch points, the elements of Pitch Theater, the chemistry, the hunt process—all of it. Don’t do the majority of the work and then bring them in; you just get more fights and more hi-jacking.
Set three meetings, minimum. There is a deal strategy meeting. Then there is the pitch preparation meeting. Finally, there is dress rehearsal or final review. You need these to be long enough to allow for vigorous discussion, a healthy fight, and brainstorming.
Never do a deal at a time. When it is time to do deals, have a big enough pipeline to create some objectivity. A person on a sinking ship will jump onto one that is on fire. By having several opportunities to consider, you will feel less of the pressure for doing the unsatisfactory deal.
Remember the words from “The Outlaw Josey Wales,” a 1976 Clint Eastwood western: “Now remember, when things look bad and it looks like you’re not gonna make it, then you gotta get mean. I mean plumb, mad-dog mean. ‘Cause if you lose your head and you give up then you neither live nor win. That’s just the way it is.”
Oh you haven’t seen that film? You really should Netflix it.