Netflix Is Dead

Hey ,We all know that Netflix wiped out Blockbuster. Why? it’s simply because it was a more efficient way of doing business (see my last email).

Instead of going to Blockbuster to rent a movie, you could do it from your couch with a click of a button.

The truth is, Netflix used to have better content, including Disney movies. Disney saw how Netflix is making money off its back and decided to launch its own streaming service - Disney+

Amazon saw the same thing and decided to launch Prime Video. Currently spending millions with no real reward. It’s not as if people are getting Amazon Prime accounts to have Prime Video, it’s currently a secondary benefit to having Amazon Prime.

When you think about it, both Disney+ and Prime Video can potentially burn millions with no profit, just to attract more eyeballs to their real sources of income. On the other hand, Netflix's income is 99% from monthly subscriptions:

Prime Video is currently not really competing with Netflix, but what won’t be solved with money will be solved with more money. They will get there eventually.

Unless Netflix adjusts, it’s basically dead.

You can’t compete where your main source of income is someone else’s loss leader.

What should Netflix do?

Launch another product. Netflix should leverage its customer base to launch more products to make its current revenue stream into its secondary income stream, or at least have another source of income. Here’s another crazy stat from Netflix most watched shows, which shows everyone is basically just being nostalgic with what they choose to watch on it, and most can be taken away by Disney and other companies: 

A side note - The Office is an amazing show and if you haven’t watched it - It’s bigger than you think! (that’s what she said).

I talk a lot about product selection and how Amazon sellers should grow their existing brands. One of the most common things I see is a brand with very cheap products being sold, only launching a more-of-the-same product, either as variations or new listings. That’s great and should be done, but at the same time, the brand should grow to more expensive products with better margins. In case the brand is selling 1,000 units a day and only 1% of those will buy the expensive products as well, that’s 10 units a day, which might make it a best seller very quickly.

The same thing is true for a brand with only expensive products and fewer customers - Such brands should launch low-priced products to have more customers, who would then buy their expensive products.

The benefits of a low-priced product: More customers, better ROI, quick turnover, and good cash flow.

The benefits of a high-priced product: Better margins, more stability, and usually less competition.

A healthy brand should have BOTH.

Another example - is Rihanna. Rihanna is the richest female musician in the world and is officially a billionaire, but not only because of her music. In 2017, Rihanna launched Fenty Beauty which is currently her main source of income. In the 1st month of launch, it made over $100M in sales! Rihanna took her name and audience and launched a beauty brand with her name on it. 

Wherever you’re at with your business, you should think as if today is day-one and what you believe to be your main product is only your lead magnet, or your loss leader - How would your business look like? What would you do as your next step?

That’s exactly the strategy I’ve been doing in my consulting business, using the different income streams I have as loss leaders or breaking even. I don’t make any money from the book, from my annual events, from calls I’m doing with sellers, or even by charging $5k to help sellers optimize their brand. I make my money by asking for equity from 7-figure sellers to help them scale to an exit, or by working with top 8-9 figure sellers/aggregators with a deeper relationship.

I know many of you don’t know how I make my money outside of selling physical products, well, here it is. 

My consulting business model:

1. Sellers starting out or doing 5 figures a year: Get my book or watch my free content - No profit.

2. Sellers doing 6-7 figures a year: Optimize their brand and build a strategic plan for the next 12-24 months - The service is currently $5k - No profit, we give a ton of value and many hours for the price. The goal of the service is to find the sellers and brands I REALLY want to work with.

3. Sellers doing 7-figures: I help you scale towards an exit within 12-24 months and connect you to buyers. I receive 5%-10% from the exit, starting from $100k minimum.

4. Sellers doing 8-9 figures a year (and aggregators): 1:1 relationship, based on an hourly rate + equity. This comes down to at least $50k + equity (usually 6-7 figures).

For more details about any of these services, you can contact me here.

This business model doesn’t require too many clients, not too much of my time, but is easily 7-figures-in-profit a year putting the equity aside. Oh, and guess what, this business model is just the beginning of a much bigger 8-figure business under the Top Dog brand. More details coming soon 🙂

The main takeaway - Considering that your main money-making product would be a loss leader or lead magnet, what more can you offer to your customers?

What’s the next big idea you could launch to serve your target audience better?

And what else can you sell under your umbrella? ella ella.. eh eh eh..

Tomer