Netflix

March 30, 2006
I’ve been thinking about what would make Netflix better…the ideas I have fall into three categories. They range from the totally trivial to the rather elaborate. Note that Netflix is now running a contest to imporive its rating system.

1. Browsing and choosing movies.

AUTEUR BROWSING
One of the main attractions for me (and, indeed the way that I quickly went to 137 movies in my queue which was a total shock to me) was being able to rent on an “Auteur” paradigm; that is, taking a director and moving through his or her career. Doing this alone generated dozens of rentals. However, I was surprised that I was unable to sort by date. As a web developer I know that this can be fairly simple to implement. Other people may be more interested in following a particular actor, cinematographer etc., or even film critic, all of which could be sorted by date and other criteria.

RATINGS SYSTEMS
Of course the member reviews and ratings are a big part of how I go about deciding on a movie but one factor that I discovered was that I tended to like movies that had a high variance in the members’ reviews, That is, if there were a lot of one and five star ratings it seemed to be a movie that *affects* people one way or another. I tend to like those films – other people may be the opposite. Having a “variance indicator” may help customers (at least, ones who understand variance) choose movies. This kind of information may be better presented in an “advanced” browsing mode.

USER BROWSING HABITS
It strikes me that the data that Netflix collects in the logs about the types of browsing people are doing to choose movies is of tremendous value. Someone who always goes to new releases is a markedly different person than someone who goes to the classics section all the time. The user experience could be tuned to the particular type of customer – intellectual, academic, sports-fan, etc. The beautiful part is that there is the possibility of finding out what kind of person the customer is without having them fill out surveys and so forth – it can be inferred from the data in their browsing habits.

In advanced mode a “This is a bad recommendation for me” button and perhaps even reason sliders – hate the actor, director, genre, etc. would help collect even better data.

2. Strategic Considerations

PARTNERSHIP WITH IMDB
IMDB is such a deep resource that it may be possible to extend Netflix’ listings to include ‘all movies’ in order to determine whether it makes sense to try to get an obscure or old movie printed. Perhaps it may make sense to allow people to include movies in their queue that are not even slated for DVD release – this would indicate real interest in a film and eliminate the guessing game procedure with respect to ordering up small runs of obscure movies.

GOLIATH THREATS
Although the stock performance of late would seem to indicate that the market has tremendous confidence in Netflix, there is still a very real threat from both Wal-Mart and Blockbuster, as well as from the generally low barriers to entry as is the case with any online business. Network effects help some but only to a certain point as this is not a marketplace like eBay. General technological leadership would seem to be a decent strategy but specialization may be a consideration as time goes by. A price war with Wal-Mart could be very damaging.

3. Service Extensions

REMINDER TAGGING
A simple note with every movie to help one remember why one rented the movie would be a great addition to the rental queue. Perhaps, for a fee, one could have a printout of this note in the email notification and sent with the film.

SPOT RENTAL GIFTING
Netflix might consider the capability to send films to other people for one or two movies…or to another location…. or a way to do a one-off rental for an additional fee which might be useful when one knows one has more time and would like more movies at home.

COMMUNITY
Community is a horribly over-used and misunderstood term in the online space, but for Netflix there is some real value. For example, my Netflix friends are also my closest friends. I feel a real kinship with them as they are movie lovers and people who really want to be in control of their movie-viewing as opposed to accepting the usual stuff at Blockbuster. Therefore a way to communicate with other people that I know would be an excellent service and could get the customer back to the site more frequently. There could be a way to share rental queues and rented movie lists. Moreover, the system could even allow others to add to someone else’s list or send them recommendations. Perhaps cooperation with Yahoo!, for their IM function, would help here but is definitely not necessary.

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