Overstock.com to introduce streaming videos
Joining Amazon and many others, Overstock.com is planning a subscription-based streaming-video service.
The service, launching later this year, expects to offer about 30,000 titles and eventually create its own content, officials announced at the National Association of Television Program Executives (NATPE) Conference last week in Miami.
Overstock.com, which claims to be second only to Amazon in online sales, gets 25 to 40 million unique visitors a month and plans to use an analysis of search and purchase history to determine what kind of movies and TV shows to make available.
The service would be tied to its Club O membership program, which offers members a five to 25 percent return on all purchases, a 40 percent discount on select items and free shipping on all orders. Membership costs $19.95 per year. Members will pay an additional fee for streaming videos.
"Introducing this service allows us to engage with our customers on a deeper level and show our appreciation to Club O members for being loyal to us over the years," said CEO Patrick Byrne at the conference, according to Loyalty 360.
An unidentified third-party partner will run the service content from major networks and studios.
Netflix and Hulu are among Amazon’s competitors in the streaming game. HBO, Nickelodeon and Dish Network are also entering the fray. But Overstock.com’s service appears to largely be a competitive response to Amazon.
Amazon $99-a-year Prime program offers free two-day shipping, unlimited access to streaming video, music and books, and unlimited photo storage. Its original series, "Transparent," recently won two Golden Globe awards and it just revealed plans to launch full-length feature films. Prime members gain access to the films four to eight weeks after their theatrical release.
"We think our loyalty program is better than Amazon’s," said Mr. Byrne, according to the Hollywood Reporter. "We give you five to 25 percent back on what you spend. So we pay people back for their digital downloads."
Retailers such as Walmart and Target also offer digital video service although they’re not subscription-based or directly tied to loyalty programs.
- Overstock.com Plans Streaming-Video Service – The Wall Street Journal (sub. required)
- Overstock.com to launch Amazon video-streaming competitor – CNET
- Overstock.com Taking On Amazon With VOD, Streaming Services – Hollywood Reporter
- Overstock.com Aims to Heighten Customer Engagement with Video Streaming Service – Loyalty360
- What do the Golden Globe wins really mean for Amazon.com? – RetailWire
Discussion Questions
Does Overstock.com need and can it execute a video-streaming service? Should other retailers be exploring subscription-based streaming video services to support customer loyalty efforts?
Why? Why would Overstock want to be in the entertainment business? The road to the entertainment industry is lined with the expensive shells of failed ventures. With so many entertainment options from established distribution brands, and with content creators breaking the handcuffs of cable by bringing their channels directly to consumers, why would Overstock want to make this move? It does not fit their core brand story and does not make sense.
There’s a song from Sesame Street that starts with “one of these things is not like the others” and that’s my reaction to this story. I wouldn’t expect video content from Overstock, and I certainly wouldn’t expect it from other retailers I frequent. Weird.
Perhaps Overstock.com is going to partner with the team that just shut down Sony’s streaming business? While there is surely a strategy to being a “fast, less expensive, lower quality follower” to Amazon, I’d still buy Amazon and short Overstock.com.
This just makes NO sense!
Not even my 2 cents.
Jump into the pool and see the sharks swimming around. Another intriguing idea, and for the life of me I can’t see this doing much. Maybe Overstock can find some warehouse selling pet rocks at a great price too.
Stick with your core business, and make it better than ever, but this streaming thing will probably not go anywhere.
When an enterprise adds additional operations or options, it increases the complexity. Steaming seems easy to do, but what is the return on investment? Everyone seems to be getting into steaming, which means there will be failures. How does steaming add or support Overstock’s mission? I don’t think it does. This appears to be more of a loyalty play which is interesting, but also very difficult. I doubt all of Overstock customers want to view the same movies. If supermarkets have trouble defining their target customer, how is Overstock going to do it? Nice idea, but I would not invest much into this as it will unlikely last more than a few years.
Should Overstock invest in systems and programs that link their best customers tighter to the brand? Absolutely. Is a me-too video streaming service the answer? I am not sure it is.
If their best customers are digital-first web-savvy consumers, then they probably have a streaming service already. Even more so, that service may be Amazon.
The question is, what is the unique combination of benefits beyond more aggressive pricing that can drive relationships and connections with Best Customers. I do not think that video streaming is a single solution for that problem.