Yesterday, I was strolling on Amazon.com (NASDAQ:AMZN) when I noticed that the Steve Martin remake of Cheaper by the Dozen was coming out next week. Now, ever since I joined Netflix (NASDAQ:NFLX) a couple of years ago, I really haven't bought many DVDs. I'll buy some for my kids, but I'm fine with my serial relationship with Hollywood celluloid.
However, something caught my eye. If you pre-order the DVD from Amazon, you get instant access to a deleted scene from the film, viewable from the e-tailing powerhouse's digital locker. No, it didn't sway me, but if I were on the fence, that's the kind of benefit that would probably win me over. Well done, Amazon.
Companies are starting to realize that you need that extra something to close the sale. Bands like Metallica and Sevendust packed bonus DVDs into their 2003 CD releases. That's brilliant. Give folks something that they can't easily bootleg, pirate, or swap online -- and present it as a freebie instead of an anchor -- and you will hook a fan.
For retailers, it's simply a matter of differentiating the product. If you picked up your Cat in the Hat video or DVD from Target (NYSE:TGT), you got a free bubble watch. At Circuit City (NYSE:CC), shoppers got a free mouse pad with the purchase of Finding Nemo.
But Amazon can do them one better. With bandwidth getting cheaper and cheaper, it costs Amazon little to stream bonus clips. In so doing, it is able to achieve two important goals. First, it allows Amazon to outdo the local retailer by providing something immediate. Second, it keeps its customers coming back.
I'm not as worried as others about an entertainment industry in a peer-to-peer file-sharing world. I know that media companies live by innovation and will adapt. However, it's refreshing to see an online retailer like Amazon harness the power of the online medium. It's no wonder both Amazon and Netflix have been singled out in our Motley Fool Stock Advisor. When you get it, you got it.
After Amazon's huge gains over the past three years, do you think the shares can continue to climb higher? Will digital distribution help overall margins or will this always be a low-margin retailer? All this and more -- in the Amazon.com discussion board. Only on Fool.com.
Longtime Fool contributor Rick Munarriz owns shares in Netflix. He does not own stock in any other companies mentioned in this story.
