What is Netflix's plan for Squid Game merchandise after Halloween?

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Quartz 11 October, 2021 - 02:15pm

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Netflix and Walmart are coming together to cash in on Squid Game fever.

America’s largest retailer has created a dedicated digital storefront for the streaming giant, putting its t-shirts, plushies, and collectibles in front of everyone browsing Walmart’s website. Fans can find merchandise related to the recent hyperviolent Korean survival drama Squid Game, popular supernatural series Stranger Things, and more.

The move is all about branding and promotion, experts say. “Netflix already resides in the homes of its more than 200 million subscribers, but offering products that fans can use and wear every day cements Netflix’s series in a more personal, tangible way,” Baruch Labunski, CEO and co-founder of marketing services firm Rank Secure, told Quartz. “Fans become brand ambassadors and promoters when they’re wearing a Stranger Things T-shirt.”

In the past, Netflix inked partnerships with the likes of Target, Amazon, H&M, Sephora, Hot Topic, and others. While it’s been selling paraphernalia on Walmart since 2018, shoppers had to search for the items, or sift through the site’s overwhelmingly large catalogue to find them. There wasn’t one central hub.

In June, Netflix debuted Netflix.shop in the US to sell apparel and lifestyle products relating to its shows and movies. However, no new website has the potential of 400 million customers waiting in the wings like Walmart’s does.

Netflix, which has been dipping its toes in e-commerce since 2017. If its Squid Game sales are promising, it could spur the company to sell more merchandise and open up several avenues for capitalizing on its successful original titles.

Back in 2020, co-CEO Reed Hasting said, ” we’re definitely focused on creating franchises.” Much like behemoth studies Disney and Universal, and TV-turned-streaming-giant HBO, Netflix could create additional revenue lines that live beyond the screen by fostering additional tentpole titles. These retail moves are especially important because subscriber growth has slowed drastically.

Clothes, mugs, and blankets are likely just the firms steps. Video games, smart speakers, and even amusement parks could be in the cards if Netflix is able to sustain the momentum of its originals among viewers. Earlier this year, the company hired former executives from Electronic Arts and Facebook to spearhead its video games initiative. It is already testing mobile gaming with two original offerings: Stranger Things 1984 and Stranger Games 3.

But, like with all things popular, there’s a catch: Others may have already beat Netflix to the mark. Squid Game counterfeits are already flooding Amazon, Etsy, and eBay.

In addition, Squid Game, given its dark and adult themes, may not be the best litmus test. Schools have already issued warnings about children watching the show and mirroring behavior from it.

Vans, the sneaker company, saw sales of its white slip-on footwear, which mirror the shoes the impoverished contestants wear on the show, skyrocket 7,800 in the three weeks after Squid Game‘s Sept.17 release. Within days of the show’s debut, global searches for retro-inspired tracksuits jumped 97%, according to fashion database Lyst, adding that the costumes of the players were “no doubt the outfit of choice for Halloween.”

Independent sites are also promising to deliver the costumes and masks before Halloween in banner ads.

And it’s not just the attire that’s captured interests. Even the props from the various “games” in the show are in demand. For instance, dalgona cookies from the honeycomb carving round are gaining popularity. Sales for marbles, used in another another game, increased 860% on Auction, a Korean eBay-esque site.

After Halloween, the appetite for Squid Game-related items at smaller retailers will likely run its course and they’re unlikely to keep stocking them once the fervor has subsided. But teaming with Walmart will allow Netflix to profit from even the smallest spikes in demand well beyond Halloween.

“Netflix’s original content is available year-round, but there are certainly spikes in viewing when a new season debuts,” said Labunski. “Likewise, we can expect seasonal, or at least variable, fluctuations in merchandise. By partnering with Walmart, Netflix gets to leverage the monster corporation’s infrastructure in a way that will make variable demands (for merchandise and on the website) much more manageable.”

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Netflix Partners With Walmart to Sell Branded Merchandise

Adweek 11 October, 2021 - 12:34pm

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Netflix gets Walmart to sell merchandise from 'Squid Game' and other shows

AdAge.com 11 October, 2021 - 11:59am

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Netflix Inc. will sell merchandise from several of its most popular shows on Walmart Inc.’s website, the largest deal the streaming service has ever made with a national retailer.

Walmart will sell toys from Netflix’s kids' show “Cocomelon,” baking kits from its reality franchise “Nailed It!” and t-shirts from its latest hit, “Squid Game.” Many of the items sold will be exclusive to Walmart. The partnership starts with seven shows and could expand over time, Netflix said.

After years of focusing all its energies on driving customers to its streaming service, Netflix is trying to turn its most popular shows into franchises that span merchandise, in-person experiences and video games. The company is betting that a sweatshirt or a festival will help market its service and create a more lasting connection between its customers and individual programs. 

Netflix created a shopping boutique earlier this year focused at a young, urban clientele. The partnership with Walmart is aimed at middle- and working-class families. While the “Nailed IT!” kits are in physical stores, most of the items will only be available online at first.

“They serve over 150 million customers a week and have more than 125 million monthly visitors on Walmart.com,” John Simon, Netflix’s VP of consumer products, said in an email. Simon joined Netflix last year to accelerate its consumer products business.

A relative newcomer in Hollywood, Netflix trails most of its biggest competitors when it comes to selling merchandise for its biggest shows. The company has dabbled in toys and other merchandise around “Stranger Things” and a couple of other shows.

Some rivals and partners have questioned whether Netflix’s binge release model, in which shows are released all at once, will limit sales. It’s easier for a kids’ TV show to drive toy sales when it is on every day or every week.

Netflix hadn’t focused much on the business line until recently, concentrating instead on developing TV shows and movies all around the world to draw new customers outside the U.S. The Walmart deal is a sign of its growing ambitions and the willingness of major retailers to work with the company.

One of Netflix’s biggest competitors in streaming video is Amazon, which is the biggest threat to Walmart in retail.

 “Walmart is now the official one-stop shop to bring you favorite Netflix series home,” Jeff Evans, an executive VP in charge of entertainment and toys at Walmart in the U.S., wrote in a blog post.

Netflix Stock Closes Down Despite Credit Suisse Upgrade

TheStreet 11 October, 2021 - 11:08am

Netflix shares closed 0.9% lower to $627.04 and continued falling another 0.1% after hours.

Netflix unveiled a partnership with Walmart  (WMT) - Get Walmart Inc. Report to create a new digital storefront -- Netflix Hub  -- that will sell merchandise tied to hit shows such as Stranger Things and Squid Game, on the world's biggest retailer's platform. 

The partnership will allow Netflix to grow its revenue streams beyond subscription revenue from its content library, the company said.

Mitchelson told investors that the success of the show has kicked off a promising stretch for Netflix's stock, citing hopes of a solid finish to the year thanks to a strong content slate.

Analysts at Keybanc Capital Markets also raised their price target on the tech and streaming major to $670 a share from $645 on a better-than -expected recovery in the second half. 

Keybanc analysts Justin Patterson and Sergio Segura said the price target upgrade was led by factors including, "continued subscriber growth, consistent price increases and operating margin expansion."

Netflix "appears to have gotten off to a faster start than expected, reflecting the surprise global success of Squid Game.

Vidhi Choudhary covers U.S. news and global economy for TheStreet, specializing in breaking news. 

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