Where is the innovation Netflix?

Netflix is, by its very nature, an innovative company. They perfected the movie-by-mail model and they are the first major breakthrough in subscription online video (pornography aside). Some might point out that Hulu and YouTube have paid services, but no one has achieved the paid subscriber base that Netflix has.

However, Netflix has been resting on their laurels. Where other companies like Apple, Facebook, Google and Twitter are introducing new features weekly and monthly – news from Netflix is thin.

So let’s imagine I work at Netflix in a division called Poirier-Labs (much nicer than Skunkworks). What would this group have been working on over past year?

• An improved AppleTV interface. I wrote more about this here. There are no AppleTV sales numbers available. That said, I know an unusually high number of families with them in their living rooms. MLB has already jumped on  the platform and rumours are stirring about the NFL’s imminent arrival (presumably stalled due to the strike). That points to serious viewership and Netflix should be improving this platform constantly.
• Actor profile pages. Almost every major movie website has profile pages for actors. This allows users to search by Actor and find films they have been in (usually the same feature is available for Directors as well). If Netflix didn’t want to create this data on its own, Tribune Media and movietickets.com both have subsidiaries/sister companies that sell syndicated feeds and it is a straightforward integration.
• Improved New Releases section. Currently I use a RSS feed to see what new films have become available. I do this because Netflix’s own “New Releases” section doesn’t update itself frequently. I am not sure if this is a bug or the result of someone hand-picking what releases appear in the feed, but either way this should be corrected.
• Integration into cable boxes. This is admittedly complex because it requires two partnerships. One is with the Cable or Telco provider, the other is with the box manufacturers (like Motorola). The boxes are capable of remote firmware updates should this became available (my PVR has had at least two firmware upgrades since i received it), but the Cable and Telco providers would not be eager to see this happen.
• If that doesn’t work, what about a partnership with ISP providers? Well again, part of the issue is that as a group, they have a vested interest in not promoting cable replacements. Here in Canada for example, all the major telcos – Bell, Rogers, Telus and Videotron - are ISPs and TV providers as well. However, there are entrants that could really benefit from bundling. I argued strongly for Teksavvy to do this as a triple play offer by integrating Netflix here. I make a similar argument for a Spotify bundle here.
• Queue’ing. As it turns out, this is a Canadian problem; apparently American’s already have a service called “Instant Queue”. The fact that I cannot save or queue films I see in Netflix to watch at a later date is ridiculous. This is my biggest frustration with Netflix, as it is fairly common that I see a film of interest, but have no way to “mark it for later”.
• Social Sharing – this one seems so obvious that it bears scrutiny. There is a reason that social sharing buttons are on almost every site you visit. People love to share. Conveniently, this helps combat the two problems subscriber models suffer from. Update: This is now available for Canadians. Learn more here.

Every subscription service has two problems:

• Getting new subscribers. Imagine the free exposure that is being missed out on. If you visit empiretheatres.com you can rate movies. You have the additional option of posting that review to your Facebook page. Netflix allows you to rate movies, but doesn’t allow you to automatically have that rating posted to Facebook. Given that they attract a tech-savvy audience (who are probably heavy “social sharers”), this is a huge missed opportunity to let non-subscribers know that their friends are using the service, enjoying it and it is trustworthy.
• Reducing churn (holding onto subscribers). The saying that “it is cheaper to keep a customer than to acquire one” is popular for a reason. Churn is a huge issue for subscriber based business models. Why not reduce churn by allowing me to share my Netflix info with my friends on Facebook and within the Netflix platform (increasing all our entanglement and interaction)? When I watch an excellent film, I want to send a message within Netflix to my friend to recommend it. When he opens Netflix, there should be a little note telling him Greg recommends he watch Reservoir Dogs. Additionally, I should be able to have my recently watched films available for others to see on my Facebook page (via an app) and within the Netflix native environment.

There is an excellent TED talk by Deb Roy, an MIT researcher, about the impact of Social Media on viewership. It’s about 20 minutes (the social media part begins at about the 11 minute mark).