How to do a Netflix

We've probably all thought it. First there was the "I want to make my new X product the iphone of the Y world". Now there's the customer request to digital consultancies "Make my business the next Netflix".

Ouch.

The trouble with any such thinking is that it rarely fits, and having clarity in one market sector rarely leads to the same clarity in others. The iphone worked because it successfully created, and then fulfilled, a new product category. But even it had a few wobbles along the way, and it needed the App store to be embraced by programmers and service companies, thereby enabling the personalisation paradigm we all love, where the phone transcends just being a phone and becomes our own personal portal into the digital world.

What is less known is the similar journey Netflix took. This was not a business set up from the outset to enable streaming video content. Netflix happened because Marc Randolph (or was it Reed Hastings?- I prefer Marc so I'll stick with him) tried chucking the recently launched DVD into the post. No case, as that would make it too large to fit through most letter boxes, and would incur too much cost. Nope, just the DVD disc itself in an envelope, posted in the normal mail. The disc survived, and the rest is history. But how does that trigger point relate to the current business? What Netflix do well is pivot and adapt. What they do exceptionally well is align themselves to the Job-to-be-Done principles. There are many people better placed than I to explain this methodology, and if you're interested please look up Clay Christensen or others to learn more. But for now, please just consider this statement:

"Watching interesting content"

Let's analyse each word, then rebuild the statement to highlight how they got it so right

1) Watching

Netflix (I think) will always involve us watching. They might branch out into radio/pure-audio, but their core offering, and what they continue to do so well relies on us watching the content on our device(s). The technology and logistical effort behind getting those pictures to our devices has changed hugely since the DVD days. One of their early pivots involved the switch from them holding DVD stock (in huge warehouses) to offering their members an opportunity to create their own wish-lists, one where members could keep discs for as long as they wished, only swapping them with new content when they were ready, based on their own prioritised personal wish-list.

This shift was risky, and its success far from intuitive. But succeed it did, and in doing so eradicated the need for their warehouses. Huge savings were made almost overnight by effectively making Netflix customers the warehouse. Clever. Shrewd. Innovative. And even more importantly, it provided a crucial stepping stone towards truly understanding people's individual viewing preferences which in turn positioned them brilliantly to maximise the their next, and far, bigger pivot- that of streaming content, and banishing the need for their postal DVD offering altogether.

2) Interesting

Those wish-lists were just the beginning. But what a crucial start. Crucial contextual data was being fed back to them. Turn now to the present day, and they are at the forefront of machine learning, with 4 out of 5 of all content predictions provided entirely by machine. Netflix has become a friendly monster, one that knows what we like, when we like it. And it is able to serve us with a very accurate, entirely personalised view of the video content world. Our own personalised recommendation algorithms get updated every 24hr by the Netflix mothership, as it constantly improves and evolves based on what people like us are watching. It is spookily good.

3) Content

What was never on the original agenda was unique content. However, such is the level of understanding they now have about us, they've realised they can further monetise that position. In 2017 alone they invested over $6Bn in 1000 hours of new content, designed specifically for their members. Ouch!

 "It's clear Netflix isn't just a streaming service anymore. For many millions of consumers around the world, Netflix has already become television," says Tony Gunnarsson, a television analyst with Ovum.

So what does this all mean for the rest of us that work in industries that have no obvious similarity with the huge success of Netflix? Clarity on the Job to be Done is largely what has powered Netflix to stardom.

They've always utilised the latest and most suitable technology upon which we watch content. They provide interesting programmes for us to watch, with an all-seeing algorithm that provides us with a phenomenally accurate programme recommendations, and they supplement such programmes with their own knock-out box-office successes.

They've got to know us, and their marketing is all designed around this personalised, and privileged interaction they have with us.

Watching interesting content

3 simple words. But in the case of Netflix, delivered with oh so much competence and dare I say it...vision...