A move from Microsoft’s playbook?

January 11, 2011 at 3:13 pm 1 comment

Microsoft’s historic success has come due to many reasons: great CEO in Bill Gates, superior execution, clarity of vision, and financial discipline among others. However, I believe that Netflix is using a different Microsoft play with its recent deals to have remote controls come with a Netflix button.

Netflix remote

As DOS, then Windows, was gaining traction as the winner in the OS market, Microsoft built its software to work on top of Intel’s chip set. Intel’s microprocessor began its industry-leading charge in the mid-1980s and Microsoft rode right along, a partnership that has lasted for 25 years (until recently?). The Netflix move is different, but similar – integrate yourself into/on top of another growing product…in short, piggybacking.

I can see Netflix’ benefits from these deals. Every consumer that uses one of these remotes will have a constant Netflix advertisement staring at them, and it’s name will become (even) more synonymous with internet movie streaming. But what are the electronics companies gaining? Sure consumers will find the button easier, but it’s not like it will be a differentiator – any company that makes an internet connected TV or device will have one. So aside from upfront costs (and the potential for future switching costs) I’m not sure I see it from there side. Why the move?