Wednesday, August 25, 2004

Vaporware ... the word you never want to read

In the widely read, highly influential Paid Content, Rafat Ali takes a swipe at Netflix with his take on the recent WSJ story on "downloading films" with a succinct comment: Netflix Touts Vaporware Service, Again.

Vaporware. It's a term you never want to read about your own company, or a product from your company or client. Or, it's that nagging feeling you have in the back of your head while your client is on an analyst call, and they talk about a future product that you are not sure is even feasible, but they keep talking about it.

What can a public relations person do in a situation like this? Sometimes, nothing. Sometimes, if the client will not heed your counsel, you need to let out a little bit of rope and let them choke somewhat, because many companies do not realize that announcing vaporware is more dangerous than having a product slip. At least with a slipping product, you have a product that is in development. With vaporware ... you have nothing. Well, actually, you have less than nothing because you have shown your hand to your competitors, so they know what is coming next. And, I've been part of a team that has smelled blood from a vaporware announcement, and used the information to make the product a non-issue.

If this is really vaporware from Netflix, it appears that they are announcing the downloading movies option to take the wind out of the sails of Walmart and Blockbuster, two powerhouses that have entered the DVD by mail rental business. Does this mean that Netflix is running scared, despite some bravado? Possibly, but it also is likely that it is part of a strategy to show that the company is not dependent on just DVD by mail rentals.

Is it a good idea? Well, the bigger question is if there is a market for downloading movies (legally, natch), and if Netflix can position the company as the leader in that space. While it is a good idea to have the product on the timeline, I wonder if it was a good idea to announce it. Why not announce game rentals, like Gamefly, another natural extension of the Netflix business. Or, why not expand into adult films, as has been suggested in other articles on Netflix? Blockbuster and Walmart are family-friendly institutions, where you cannot even rent NC-17 films - there's a niche that isn't being filled right now by the market, and Netflix could easily slide into the market.

So, beware of vaporware. Counsel, advise, but know that your client or company is going to want to go out with the information anyway, and that PR will be blamed when it backfires.
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