The One Idea That Can Save Netflix
(Adding this after writing - forgive any shameful typos, gotta rush to catch my train and still in pajamas! Fool On!)
In his letter to Stock Advisor subscribers, regarding the price crash of NFLX stock, Tom Gardner makes an important point regarding how Netflix might return to the righteous path. He wrote,
When I go to Netflix, I find it hard to quickly find the best films. Furthermore, its rating system ranks a lot of movies as having less than four stars. It's advertising a huge selection of movies that its own rating system tells me I shouldn't waste my time on. Netflix has to think about how to make the search for great films quicker and easier, and showcase a rating system that doesn't make most movies look like a waste of time (i.e., I think their ratings are coming up too harsh, and bad films should be pared back from the offerings.)
Like Tom, I too get annoyed when I see too many movies ranked 3-star and below. The star rating system works - I have never watched a movie Netflix thought would be a 5-star movie for me that I did not enjoy, etc. But a rating system is cold and technical and inhuman. It's not enough.
This got me thinking about a critical idea. Inspiration is contagious. Not too long ago, my nephew came to stay with us while we were leaving in LA, because he was taking classes in automobile design in Pasadena. I have never been a car guy, never gave a crap about them at all. But my nephew is fanatic. He has stacks of auto magazines all over the place, and can discuss with great intelligence every single feature of a car - breaks, tires, grills, engines, spark plugs, seating, console design, acceleration - the list goes on and on. When buying a car, I've always been the type of boring shnook who would not dream of buying one without checking Consumer Reports for reliability. My nephew laughed at me over this and expressed his intense passoin for the experience of driving.
I have never looked at cars the same way again. Now every ride is a little more interesting. I'm more aware of how my car accelerates, and the seemingly countless choices designers make. I get irritated when I see a car that is blatantly ripping off another car's design and perk up when I see a unique take on break lights.
Back to films. I am a Quentin Tarantino fanatic. I love scouring QT sites and reading about his favorite films. He expresses a total joy of filmmaking every time he discusses them and you can feel it in his films. I have to watch his films 5-10 times because I'm so aware of how much fun he must have been having setting up shots that I miss things in the story. When he talks about 1970's Filipino sexploitation films - a sub-genre I never knew existed and would not have cared about - I find myself thinking, "Quentin loves these!?" And the films become a thousand times more interesting. What does he love? Which shots? Which characters? What is HE seeing?
This is why I write a lot about Netflix. Filmmaking allows us to see through other people's eyes in a way that no other medium (except maybe novels) can touch. I believe in the important of filmmaking. More than I knew before writing these blog posts. And I think most people do too. Why else would people talk so much about this stock and get so riled up by a price move that's really not that big of a deal?
Bottom line is by reading about QT's favorite films, I found at least 75 films I either did not know existed or was willing to experience with more favorable eyes.
Tom G. wrote, Netflix needs to be,
Demonstrating publicly, continually, that the company is completely obsessed with delivering great movies into the home.
He's right. And an important point to add to this is that marketing/presentation can expand our definition of what is a great movie or TV show. Heaven help me for admitting this but my daughter is so passionate about fashion she has gotten me to watch "America's Next Top Model" and more than once I have leapt off the seat and yelled at the TV because one of "my" girls was simply not bringing her A-game to the shoot! "Damn you, girl - you're buried under a mountain of chifon and I can't find a soul!" All my life I have thought fashion was a mockery and a joke. Now I can't help but notice patterns, stitches, cuts, color combinations, and what clothes are saying about people. It makes life more interesting. Inspiration is contagious.
Films are made not just by people, but artists. Netflix needs to be a place where they WANT to bring their work. I believe there are many great artists who would gladly take less money to be exclusive with Netflix if they believe their work will be presented authentically. This could be a massive competitive advantage. Inspiration is contagious. Inspiration can be the missing piece of the Netflix puzzle. The all-important moat Warren Buffett always talks about.
A Netflix integration with Facebook could go a long way toward what I'm getting at here. The inspiration of someone we respect can turn a 3-star movie into a 4 or 5-star movie. Conversely, spending a billion dollars to promote the CW can demean the entire experience.
People are not as dumb as we often think they are. Time and time again the shows that rise to the top on television - Seinfeld, Frasier, Sopranos, 30 Rock - are genuinely the best. Quentin Tarantino said, "I'm not a hollywood basher. They make enough good work to justify their existence." The opening still exists for someone to distribute films and TV shows that are fueled by a contagious inspiration that people will gladly pay for, and pay more for if they're made to feel inspired.
This is the one idea that can truly differentiate Netflix. There's a big difference between 20+ million subscribers, and 20+ million inspired subscribers. The latter is the only thing that can save the company.