Netflix Revisited (Part 6 of a Series)

Summary of Video Rental Activity
So I've been a Netflix customer for about two months. I've rented 16 films so far, with two more hopefully arriving in the mail tomorrow. That makes 18 in about 60 days. (Thank you, Netflix, for the "rental history" option. It is most excellent.) I'm still a Blockbuster customer, but my Blockbuster rental activity is dramatically reduced (3 or 4 movies in 60 days, as opposed to what was routinely 15-20 movies per 60 days.) So what am I renting now at Blockbuster? VHS movies -- mostly foreign, documentary, and indie (in other words, everything BUT "blockbusters"!) -- none of which have "gone to DVD" yet. Solve that problem, Netflix, and my Blockbuster days are over.

The Phases of the Netflix Customer Life-cycle
So I've passed from Phase One, namely, Netflix Newbie. This is the phase of the brand-new customer, who takes a chance, signs up for the free 10 days of service, selects some DVDs to rent, and sits back and waits. Phase One worries include: Will the discs arrive? Will they be damaged? Will they be the right discs?

When the first discs arrive, you enter Phase Two: you discover how the discs are packaged (as cheaply but durably as possible -- thanks to Tyvek!), you watch the movies, and you notice your worries have changed. Phase Two worries include: where did I put those envelopes? Did [insert family member name here] throw them out? Did I put the right DVD back into the right sleeve? Does it matter? Will I remember to mail the discs today? Will they get back to Netflix safely? If they don't, do I have to pay? And so on.

Then comes Phase Three: the committment. You sign up for the pay service, your ten days being up. At this point you're not used to just going wild and clicking the button for every single movie that strikes your fancy. That behavior comes later. :-) For now, you're still selective. You cautiously add a handful of DVDs to your queue and visit your queue often to see that they've been added. The trepidations about whether the discs will arrive in the mail lessen as you see the increasingly-routine Netflix emails arrive in your inbox, announcing receipt of the discs you've returned, followed by new emails announcing the sending of the next N movies from your queue.

I'm now into Phase Four. The Borg phase. Total assimilation. I visit the site less and less, but when I do, I click "rent", surf around the site some more, click "rent", surf, rent, surf, rent rent, surf surf, rent rent, surf surf, done. I occasionally look at my Queue numbers -- but rarely visit the Queue page. Phase Four worries: I have no idea what movies are next in the queue. Oh no, they're dry documentaries! What was I thinking! Oh, can I change them in time? Oh no. That just won't do for this weekend!

Netflix probably hopes I never reach Phase Five, which is where the customer starts thinking, You Know, There's More to Life Than Renting And Watching DVDs, and worries what one worries about when one starts thinking such things. Right now I am locked into Phase Four, so all is well.

My First Netflix SPAM
Netflix, I had hoped you guys wouldn't, but you did. You spammed me. And guess what. Your offer was completely non-relevant and uninteresting to me. Here's the email:

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*NETFLIX*       Lights... Camera... Action!       October 2, 2002*

******************************************************************

Dear Brian,

From time to time, we like to feature a movie that we think you may 
find particularly interesting.

Blade 2

Blade (Wesley Snipes) is a half-vampire sworn to eradicating the 
bloodsuckers who lurk in the shadows.   But when a new kind of bloodsucker
-- the dread "reapers" -- is unleashed, the Vampire Nation asks  Blade to help 
his longtime foes prevent a nightmare plague that would wipe out human and 
vampire alike.  Directed by Guillermo Del Toro (Cronos, The Devil's Backbone),
Blade II mixes high-tech action with crimson terror.

More details: http://www.netflix.com/MovieDisplay?blahblahlablhablablablaablabl

Rent: http://www.netflix.com/EmailRent?blablablablablablablablablablablablablablala

Want to see more recommendations? Come check out your Best Bets!

http://www.netflix.com/Recs?blablablablablabl

Tip: Try rating more movies. Each time you rate a movie we record your vote 
and use it to help recommend movies!

http://www.netflix.com/RateMovies?blablablablabla

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Give Free Rentals!

Here's your chance to tell your friends and family how easy and convenient it is 
to rent DVDs from Netflix.  Click below, enter their e-mail address and we'll invite 
them to try Netflix for FREE.

http://www.netflix.com/SpreadTheWord?blablablablabla

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-Your Friends at Netflix

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BESTBUY.COM

Pre-order American Idol and get an exclusive bonus disc!

http://www.netflix.com/ShowEmailAd?blablablablablablablablablablablablabla

On October 15, TV's surprise hit of the summer comes to DVD. And when you 
order the limited-edition American Idol: The Search for a Superstar from 
BestBuy.com, you'll receive an exclusive bonus disc, featuring extras like "A 
Day in the Life of Justin" and "Judges' Profiles."

On the American Idol DVD itself, you'll also receive tons of special features, 
like:

* Top 10 Finalists: The Complete Auditions
* Top 10 Arguments: When Judges Attack
* Top 10 Tips: How to Be an American Idol

Check out BestBuy.com's Movies store for more of your favorite films.

http://www.netflix.com/ShowEmailAd?blablablbalablablablablablablablablablablabla

***************************************************************

From time to time, we send our members newletters showcasing some new 
releases we think they may find  interesting. If you would prefer not to receive
these e-mails in the future, please click the link below to unsubscribe.
http://www.netflix.com/EmailSubscription?blablablablablabla


SRC: blablablablablabl
(c) 2002 Netflix, Inc.

This message was mailed to [xxxxx@xxxxxxx.xxm]

Blade 2!?!?!?!? I mean, come on. You've got to be kidding! Netflix: hear me now, jot this down in your database. I hate vampire flicks. Except for really weird ones like Nosferatu, and Coppola's Dracula (the latter seen every, say, 5 years, is okay) -- other than that, I just plain don't like the genre. I have not seen Blade 1. I have not seen Blade 2. There is a reason. You now know it. :-)

I figure, your bizdev guys cut a deal with Best Buy and you need to deliver them a certain number of agreed-upon impressions ("eyeballs"), right? And so my eyeballs were handy, why not send the SPAM to me, right? Bzzt. Wrong. Your site should notice I visit with regularity. When I do, I always populate the queue with a few more flicks. I have 72 movies in my queue right this moment, That should give you an indication that I'm kinda happy with the service and don't need any prodding. I appreciate your need to do bizdev and get the deals and expand your revenue sources, but this kind of email wreaks of 1999. I urge you to explore alternative, more progressive, approaches. I encourage you to consider Jeff Bezos' approach (which I still admire): VERY occasional emails, very folksy, very humble, telling a story, or, as Cluetrain would suggest, carrying on a conversation. Extending an invitation. Inviting me to learn something new about you. Inviting me to share in the discovery of something new. That would be quite different from sending me a 1999-era "eyeball" bizdev-deal SPAM. Sure, my viewing the email now counts as an "impression" and you can add 1 to the "impression count" in the contract you have with BestBuy. But did you ever stop to consider that the term "impression", to the customer, has a different meaning than to a product manager thinking, "eyeballs looked at"? To the customer it means "made an impression". In this case, you made a bad one.

Customer Input vs Company Output
What I really like about Netflix is how little time the service requires of me. And, as time goes on, my time requirement becomes even less and less. Yet the quality of the company's output --- the discs it mails to me --- remains high. So my perceived value of the service is high. The fact that I perceive that the time I must take to cause the company to output stuff to me is less and less, causes me to perceive an increasing value of the company's output to me. Compare to other ecommerce sites:

Other sites, like eBay, have over the years been rather notorious for the amount of user input required to get ANY output -- in other words, to get stuff shipped to you. The registration process was gnarly and time-consuming, the bidding process was hair-raising and time-consuming, and the post-auction process was "you're on your own", an iffy venture with an unknown third party. eBay has been addressing these issues over the past couple years with Checkout, Sell Your Item 2.0, and improved Registration user flows. All meaning the amount of user input goes down, without reducing the quality of the company's output. That's good.

To me, this is what makes Netflix attractive. It is in the sweet spot of the graph. The goal for an ecommerce business is not to get to the upper right-hand corner of that graph. The goal is to get to the far lower-right-hand corner of that graph. The amount of USER INPUT, meaning time and effort spent reading, clicking, deciding, ordering, on the website, should be as minimal as possible yet at the same time, the quality of the output of the company should be high. As time goes on, if input decreases yet output stays high or even goes higher, that makes for one happy customer. Do less, get more. That's what customers want.

Out of Site, Out of Mind
A note of caution to Netflix: right now I'm happy because I can make quick decisions, 10-15-30 seconds on the Netflix site, add some more DVDs to the queue, and I am "out of site, out of mind". In the old days, say, 1999, this would have been a nightmare. Site stickiness was all the rage: how do we get you, the user, to stay on the site for longer and longer periods of time? Now, with businesses like Netflix, the equation has shifted: the customer is asking, how do I come to the site less and less but still remain a loyal customer and get value out of my subscription? I think Netflix is doing a good job here. HOWEVER, the SPAM shifts Netflix out of the sweet spot. It requires MUCH more of my time to deal with an email from Netflix in my inbox -- hmm, it's not a notification, it's not telling me it received something, it's not telling me it sent me something, is it telling me there's a problem with my account? Is it telling me that there's some great new feature or functionality or deal on the site that I'm going to benefit from? Hmm, I'll have to open the email and read it... hmm... waitaminnit... this is SPAM... oh no...Netflix... how could you... In fact, because of a chance ordering of my Eudora filtering rules, it's a lucky thing I saw this email at all, because it was a prime candidate to be automatically dumped in my "trash" mailbox. Reason: I scan for the word "unsubscribe". Anything that has that in it, and hasn't already been caught by a higher-up filter, gets trashed. In this case, the "from Netflix" rule was triggered first, so I saw your SPAM. But as Dubya would say, fool me once... fool me twice... won't get fooled again! :-)

More Thoughts on Ratings
I visited the Netflix homepage today and was greeted with a bunch of recommended DVDs. I've seen, or I own, most of them. For ones I've seen but don't own, it still bugs me that I can't tell Netflix, "I've Seen It, I Liked It, and I DO want to rent it some time, so REMIND ME about it!". Apparently this still isn't a big deal to Netflix. Oh well.

I noticed some new stuff on the site: the No Opinion option. Hmm. So now I can indicate to Netflix that I have no opinion about a particular DVD that's recommended to me. Whereas "Not Interested" suggests that the user does not care for the film and it should not be recommended to the user ever again, what does "no opinion" imply? I'm still left wondering if you say anything to Netflix about a movie -- whether you love it, hate it, or don't care at all -- does that mean, never, ever (for all intents and purposes) recommend it again? I keep thinking about the "like / don't like" / "own / don't own" matrix I drew up back in Part Four of this Netflix review. Especially the "like but don't own" quadrant. I submit that Netflix is still missing the boat here. As a customer I still have a perception (it may very well be wrong, but hey, you never really explain it on the site, guys!) that any communication from me about my interest or lack-thereof in a particular DVD means I will never have it recommended to me again. And so I am hesitant to tell Netflix about anything unless it's a "Not Interested", or it's something that I have seen, sorta liked, but wouldn't lose any sleep if I never saw it again.

And I think this is a shame. I already regret that rate-fest I went through the first week I was a customer. I got online, and rated everything in sight -- all the movies I'd seen in theaters or own already or have already rented thru Blockbuster. But what I was unable to tell Netflix was, hey, most of these movies I wanna rent, so keep recommending 'em to me! Be a reminder service for me!

When I think of personalization in the DVD rental space, I envision a scenario as follows. Imagine if Blockbuster were completely personalized for ME. Imagine if the local store KNEW I was about to hop in the car and head over. Imagine that at that moment, the employees scrambled and arranged, along all of the top and next-to-top (i.e. most visible) shelves in all the nearest aisles, all the movies I liked, have seen in a theatre but expressed an interest in renting in the future, or haven't seen but might like. So when I arrived at the store, the experience I had was one of "oh yeah, I forgot about that flick, definitely wanna rent that!" and "oh yeah, that one too!" and "cool, that's a great one!" and "great, didn't know this was already out in DVD, this one's a rental too!" and so on. This is what my experience should be on the Netflix homepage.

In fact, if it were up to me, this is what I would like to see on my personalized Netflix homepage: a grid of 100 DVD thumbnail images (approximately 2x larger than the sizes Netflix currently uses), with the first 25 letters of the title, in a small font underneath, and then underneath the title, two buttons: "Details" and "RENT". No ratings, no descriptions, no nothin'. (In fact, get rid of the "Details" button if you want, just make the image clickable -- if I clicked the image, that'd mean I want details.) So all there'd be would be a grid of 100 DVD boxes, say 5 columns, 20 rows. As if I were looking at a shelf in a store. Gotta make the images larger so I can read 'em better, but you'd be surprised how recognizable they are even when pretty small. I would call this the "iconic" interface --- heavy on the pictures, light on the text. The only other options for me would be to move forward or backwards --- meaning, show me the previous 100 DVDs, or the next 100 DVDs. To me, this is a high-bandwidth-user option that not everyone would like, but it would be great for me. It could be a "mode", an alternative method of browsing the site, in addition to the conventional way that exists now. For years I have recommended that music sites do the same thing (this works just as well for CD covers, 100 at a time).

Well, that's enough for now.

UPDATE:

Continued in Part Seven...

Posted by brian at October 4, 2002 12:00 PM