One day back in 2007, some forward-thinkers at Rovi Corporation started throwing around ideas. “If we were to connect Blu-Ray players, what could we do with them?” At that time, Netflix was one of Rovi’s customers and there was no simple way to stream Netflix content directly onto TVs. Rovi saw connected Blu-Ray players as a possible solution to that problem. So Rovi started talking with manufacturers and gauging their interest in creating connected boxes.
The Blu-Ray player manufacturers didn’t need much convincing. The BOM cost adder to create a connected product was negligible. Yet the added value and product differentiation that connectivity created was huge. And there’s more: Netflix struck a deal with the manufacturers, agreeing to pay them a flat rate for every new customer that the connected Blu-Ray players brought to Netflix.
The connected players got a lot of preferential treatment from retailers, too. Best Buy, for example, promoted the heck out of the connected players as a way to promote their own alternative to Netflix, CinemaNow. Many other companies, such as Rovi, benefited from the new capabilities of the connected players. Rovi sold extra content through the connected players and embedded customized ads directly into the user interface.
And that’s how connectivity added value and created new revenue for Blu-Ray manufacturers. It all started with a simple question: “if we were to connect Blu-Ray players, what could we do with them?” Now ask yourself, if you were to connect your products, what could you do with them? Think about that, then email us at email@example.com and we can talk about how to turn that little idea into a big reality.
By: Shane Dyer, President of Arrayent