Programming Analytics

“We’re very much the ‘moneyball’ content buyers,” Hastings said, referring to Michael Lewis’ book about a low-budget baseball team’s approach to player acquisition. “We’ll look at, OK, we paid X for something, so how many people watched it?”

Netflix has problems.  At least, their streaming service has problems.  The biggest problem is that they have a terrible content selection.  Why are they unaware of it?

1. First, Reed Hastings buys content according to the metric “Dollars spent divided by number of watchings.”
2. Any metric can be gamed.
3. People are getting good at gaming Reed Hastings’ metrics.

To wit, my daughter watches some truly terrible movies when I’m not around.  She watches horrible second-rate non-union Dreamworks knockoff imitations that are designed to look as close as possible to real movies from the Netflix user interface.  She watches “Chop Sock Panda”, which has a cover image and description that look exactly like Kung Fu Panda.  She watches “Dragon Slayer Team”, which has a cover designed to look exactly like How to Train your Dragon.

These content creators create terrible films and trick people into watching them.  My daughter is five; she’s still enthralled at being able to control the user interface, and she loves being able to turn on the TV and pick a movie when nobody’s paying attention to her.

So what went wrong here?

• The metric of “how many people watched it” is not the same as “how many people want to watch it”.  It measures people settling for their second choice, not the overall aggregate desire.
• The penalty of failing to buy really desired content because it has a high cost means that more people will “settle” for their second, or third, or fiftieth, choice.
• Burying users under mountains of sludge means it’s really hard to find the real gems.

I’ve recently been leaning towards cancelling my Netflix subscription and replacing it with Redbox rentals.  Why?

• Redbox has a limited selection: about fifty or a hundred movies to choose from.  A limited selection has real value; it forces me to make a choice and stick with it.
• A Redbox rental requires me to actually watch the movie I pick.  If I want to watch a movie with my family, I want to pick something we’re all interested in seeing.
• Redbox rentals benefit from something not usually thought of as a benefit: marketing.  I consume movie marketing, and some marketing makes me interested or curious to watch a movie.  Believe it or not, that’s actually a real value - it helps me to separate movies that have something potentially worthwhile from movies that have no redeeming features.  Netflix is almost completely consumed by direct-to-DVD releases that have low production values, second rate actors/actresses, and no critical value.

What would fix things for Netflix?  They would have to become choosy about their catalog.  They might decide to create a separate section for “Direct to DVD releases” and one for “Actual honest to god movies”.  They might get better metadata and allow people to filter their catalog (but hey, maybe I like that idea because that’s what my company does!)