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Vudu marketing and advertising strategy

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    Vudu marketing and advertising strategy

    Hey Vudu,

    I think you have the best downloadable movie rental service in the industry. Your architecture is miles ahead of everyone (Netflix, Blockbuster, etc.). But I'm concern of your marketing and advertising strategy. There isn't many people that know about the Vudu box. Only a small community of techie's like us.

    I only heard about Vudu when I browsed sites like EngadgetHD and CNet. You're in many other websites but that's now enough. You don't have the advertising presence/name like Netflix or Blockbuster. Netflix has an excellent strategy of partnering up with other vendors like LG, Roku, Tivo, Xbox, and Samsung.

    I hope you ramp up your advertising/marketing so you can win over some of the Netflix and Blockbuster subscribers.

    You have a great product and hope that Vudu can survive this poor economy.

    #2
    Re: Vudu marketing and advertising strategy

    I agree 100% with this post. I love the product and wish the company well in what's sure to be a very lucrative (and extremely competitive) market space for many years to come. But right now I am concerned about the complete lack of marketing or advertising.

    Comment


      #3
      Re: Vudu marketing and advertising strategy

      Keep in mind that none of us know what the Vudu business model really is. For example, if Vudu sells just 50,000 boxes a year, they could still make some decent sales.

      Let's say the average box price is about $175 given the specials and all now. So that's $8.75 million. Now, let's say those 50,000 subscribers rent/purchase $10 worth of content per month. That's $500,000 a month in revenue or 6 million a year.

      This would make Vudu a $14 million a year business. Not huge, but a lot of companies that I deal with every day are that size or smaller. If you have the correct business plan, you can easily survive with that sort of sales dollar as a start-up. Additionally, any good venture capitalist knows that a new business will need about 5 to 7 years after startup to really begin to turn a profit. Vudu is only a couple years into this now and still has a ways to go. But if you've got a smart VC behind you and a good business plan, it's not an issue.

      So far my experience with Vudu is that they have a good business plan and a good set of VC backers.

      Now, in terms of advertising, it costs money. If you are making your business plan w/o spending the money on adverts, why do it. I too would like to see more, but Vudu just got into Best Buy a few months ago and that looks like it's beginning to do fairly well for them. I'd like to see Vudu start advertising on line at least on sites owned by the likes of Capable Networks and similar providers of tech based websites. It would be a good start.

      Comment


        #4
        Re: Vudu marketing and advertising strategy

        I'd like to see Vudu advertise on freeway billboards, public transportation area (SF BART stations), train stations, bus stations, airports, on the side of buses, TV adverts, magazine ads, and newspapers.

        Comment


          #5
          Re: Vudu marketing and advertising strategy

          Originally posted by techm8n View Post
          I'd like to see Vudu advertise on freeway billboards, public transportation area (SF BART stations), train stations, bus stations, airports, on the side of buses, TV adverts, magazine ads, and newspapers.
          Yeah, so would I, but an ad budget like that costs a large amount of money. At this period of time in Vudu's growth progression spending these kinds of resources would likely be counterproductive.

          Right now, the best promotion for Vudu is Guerilla Marketing. We are the Guerillas. So it's up to us to advertise it and promote it. On top of that, I think getting the promotion and momentum from BestBuy is going to be big too.

          Comment


            #6
            Re: Vudu marketing and advertising strategy

            If you use Facebook, install the Facebook for VUDU application in your Facebook account and let people know what you're watching on your VUDU!

            Comment


              #7
              Re: Vudu marketing and advertising strategy

              See my sig for a link to the Facebook App

              Comment


                #8
                Re: Vudu marketing and advertising strategy

                Vudu has attemted to have Training Managers in Best Buy locations during the holidays to drive sales and also just to bring up the awareness of the product.
                But the problem with this is that for alot of people this type of technology is just way over there head, and thus Vudu let go several of those people the week of Christmas! It was a great idea, but just not executed the correct way....

                This is a fantastic product and I hope it continues to grow, but with NO advertising at all it may be a tough climb.

                Comment


                  #9
                  Re: Vudu marketing and advertising strategy

                  Well, if they let go of training managers, those managers must not have been performing well or something. What Vudu needs to do is train the BestBuy staff on how to promote the product. I've been to some BestBuy stores where the Vudu is really well promoted and displayed in multiple places. I've been to a couple others where the box is poorly promoted. In one store, they didn't even have a working unit hooked up. If Best Buy promotes the box well, it's a good and easy sell.

                  Comment


                    #10
                    Re: Vudu marketing and advertising strategy

                    Originally posted by NA9D View Post
                    Well, if they let go of training managers, those managers must not have been performing well or something. What Vudu needs to do is train the BestBuy staff on how to promote the product. I've been to some BestBuy stores where the Vudu is really well promoted and displayed in multiple places. I've been to a couple others where the box is poorly promoted. In one store, they didn't even have a working unit hooked up. If Best Buy promotes the box well, it's a good and easy sell.
                    I went to a BestBuy were their sales people didn't even know what a Vudu does. The boxes were out in the open but for a regular customer passing by, they woundn't know what they're looking at.

                    Vudu should setup a Vudu self demo kiosk in BestBuy so customers can demo the product in the store. The kiosk will have a Vudu box, a TV, and advertising stickers/paint all over. "Vudu, the movie rental store in a box."

                    Hey Patrick,
                    I hope you take some of these ideas to take to your next marketing group during your brainstorm/meeting sessions.

                    Post more ideas everyone!

                    Comment


                      #11
                      Re: Vudu marketing and advertising strategy

                      Like I said, some Best Buys have great coverage. One near my office has a Vudu prominently on display in their main Magnolia center with the demo running. It has another Vudu at another spot in the store in a kiosk type place where you can play with it. I've been in other BestBuy stores where the sales people definitely knew about the Vudu and had even purchased them for themselves. But then still in other stores, the coverage is very poor. It varies and it's too bad.

                      Comment


                        #12
                        Re: Vudu marketing and advertising strategy

                        Originally posted by NA9D View Post
                        Well, if they let go of training managers, those managers must not have been performing well or something. What Vudu needs to do is train the BestBuy staff on how to promote the product. I've been to some BestBuy stores where the Vudu is really well promoted and displayed in multiple places. I've been to a couple others where the box is poorly promoted. In one store, they didn't even have a working unit hooked up. If Best Buy promotes the box well, it's a good and easy sell.
                        Well I can say, being a manager for Best Buy, that vudu has my buy in and my support in my store.

                        Comment


                          #13
                          Re: Vudu marketing and advertising strategy

                          Originally posted by NA9D View Post
                          Keep in mind that none of us know what the Vudu business model really is. For example, if Vudu sells just 50,000 boxes a year, they could still make some decent sales.
                          Since Vudu hasn't published any sales numberst that I have seen, this is all speculation (including my comments), but, I don't think Vudu is anywhere near "just 50,000 boxes a year". That is about 1,000 per week. I would be shocked if they are averaging over 100 per week at this point.

                          Originally posted by NA9D View Post
                          Let's say the average box price is about $175 given the specials and all now. So that's $8.75 million.
                          I assume that you understand that the MSRP or even the street price have no real meaning for a manufacturer.....all that matters is what they get (dealer price less any discounts or programs). Vudu's margins are not large, especially on their entry level box sold at Best Buy. Add into the mix their specials (BB exclussive $200 movie credit, Vudu direct @ $149 w/$50 movie credit at Christmas and the current $99 offer). So, I seriously doubt that they are averaging $175 per box at this time, but, they ARE getting a much larger market penetration, which is good!

                          Originally posted by NA9D View Post
                          Now, let's say those 50,000 subscribers rent/purchase $10 worth of content per month. That's $500,000 a month in revenue or 6 million a year.
                          Again, $10 worth of content per month would not be $10 to Vudu as the studio's get their cut. On this figure, I think you are probably a little low as to the average, but, I have nothing to base this on other than a feeling of what my customers do (at least 1 movie a week on Vudu, more on BluRay and Kaleidescape). I also think Vudu will grow steadily and become the "go to" source for movies as their library increases, especially if they can move to Tier 2 release priority (what the airlines and Lodgenet are).

                          Originally posted by NA9D View Post
                          This would make Vudu a $14 million a year business. Not huge, but a lot of companies that I deal with every day are that size or smaller. If you have the correct business plan, you can easily survive with that sort of sales dollar as a start-up. Additionally, any good venture capitalist knows that a new business will need about 5 to 7 years after startup to really begin to turn a profit. Vudu is only a couple years into this now and still has a ways to go. But if you've got a smart VC behind you and a good business plan, it's not an issue.

                          So far my experience with Vudu is that they have a good business plan and a good set of VC backers.
                          Yes, many here might be surprised how many CE manufacturers would love to be $14 million a year or more. Even some well known, high-end brands. I don't think Vudu is anywhere near that figure....yet!

                          According to Vudu dealer training, their VC money is well above the typical start-up in this field adn they have some very tech savy backers. If it weren't for the current economy, I wouldn't have ANY concerns over Vudu and their VC sticking it out, but, in THIS economy, nobody is safe and it may have nothign to do with how sucessful Vudu is at the time if other investments force issues.

                          I also like most of what Vudu has/is doing so I too assume that they have a great business plan and are following it. I believe in the product and what the company has stated they plan to do!

                          Originally posted by NA9D View Post
                          Now, in terms of advertising, it costs money. If you are making your business plan w/o spending the money on adverts, why do it. I too would like to see more, but Vudu just got into Best Buy a few months ago and that looks like it's beginning to do fairly well for them. I'd like to see Vudu start advertising on line at least on sites owned by the likes of Capable Networks and similar providers of tech based websites. It would be a good start.
                          Nationwide advertising is difficult w/o having TONS of money. Vudu can't afford to compete with the types of Apple, Netflix, Blockbuster or Amazon, not to mention Microsoft. Even with a superior product, they have an uphill battle, but I like supporting the underdog, especially when they have clear advantages!

                          I have no idea how Vudu is doing in Best Buy. Maybe our resident Best Buy store manager will chime in with some figures (if he is allowed to).

                          There are some hurdles at Best Buy. First, Vudu can and will cut into their disc sales. Second, the margins are small. Third, Vudu is competing with them by selling direct. Fourth, Best Buy has education issues as others have discussed.

                          Will these hurdles be overcome? We will have to wait and see.

                          Comment


                            #14
                            Re: Vudu marketing and advertising strategy

                            Just speculation, but consider the following.

                            Vudu was placed in 400 Best Buy stores (a subset of the chain). If each store averaged selling 1 per day that would be 2,800/week. If they each sold 3 per week, that would be 1,200/week. Certainly that isn't a fair reflection of the whole year, but now that they have ramped up and have product placement across the country, I don't think Jon's original scenario is an unreasonable guestimate.

                            Comment


                              #15
                              Re: Vudu marketing and advertising strategy

                              Originally posted by Nded View Post
                              Just speculation, but consider the following.

                              Vudu was placed in 400 Best Buy stores (a subset of the chain). If each store averaged selling 1 per day that would be 2,800/week. If they each sold 3 per week, that would be 1,200/week. Certainly that isn't a fair reflection of the whole year, but now that they have ramped up and have product placement across the country, I don't think Jon's original scenario is an unreasonable guestimate.
                              Point taken, and, on the surface those numbers don't seem unreal, and I am sure that some BB stores are selling 1 a day, but not the majority (again, how about some input from our BB manager?). Assuming that BB keeps its interest in Vudu (see my previous comments on BB and Vudu), they can be a major factor in hitting that mark....only time will tell.

                              Vudu hasn't been in Best Buy for very long and, based on some knowledge, some investigation and some SWAG, they haven't hit anywhere near either of those figures...yet. Again, I am/was talking averages here and, obviously, the last 2 - 3 months have had to have been record setters and probably HAVE exceeded 1,000 per week, but I am not sure that they can maintain that.....yet!

                              I am not privy to any continuous inside knowledge, so I don't positively know what Vudu's average per week unit sales are, so I am also guessing, but, I have overheard some numbers and, based on that, their best week (ALL channels - BB, direct and custom install/specialty retail) hasn't hit the BB only speculation.

                              Even stocking the 400 BB stores (your number) at an average of 10 per store would only give 4,000 units that shipped out over several weeks for the Christmas push. BTW, the stores in our area that I talked to did not get 10 units per store (most got 6 or less), nor did they sell out over Christmas.

                              Before the Christmas push, one store I go to only had 1 box for sale and 4 wireless kits and knew nothing about it (I asked). I assume that they were waiting for the rest of the boxes. They eventually received 6 total units (plus the demo box) and they knew more about it, but were not fully informed of its features or limitations.

                              Don't get me wrong, I am NOT trying to be negative on Vudu as I like what I have seen (other than the network hogging issues) and want Vudu to succeed. I have sent out hundreds of mailers telling our better client's about Vudu, even though the margins on it aren't what I am used to....I like it that much and see it as an opportunity to offer our client's something relatively new and exciting!

                              Comment

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