The Rise and Fall of Netflix
For me at least, 2016 will be remembered surprisingly as the year of mass media meltdown. Even bigger surprise for me was to see the technical press to close both eyes when it came to unethical behavior or lack of innovation from some of the largest internet companies.
Netflix is the prime example of a company which should have been scrutinized by press. Simply put, in the last few years Netflix completely abandoned its focus on the customers in its effort to become an industrial style broadcast media company instead. In the process, it abandoned its innovative web based business model focused on understanding personal choices of its individual customers and it is currently trying to become a major studio producing its own content, competing with the likes of Timer-Warner and Universal Studios. While Netflix has the advantage of web based delivery, I believe in the long run, this switch will prove fatal to Netflix.
I am not aware of any major technical publication making a note of this. So, how come I noticed this change while no one else did? For starters, I am a loyal Netflix customer dating back to the very creation of the company. Almost from the start I was admiring their ability to execute and keep me and other customers satisfied. Over the years I watched with an admiration Netflix uncompromising fight with established media companies, including battle with telecom giants Verizon and Comcast, who both throttled Netflix streaming content. I was very proud to be Netflix customer and supporter.
However, something happened at Netflix during 2015. I can not put an exact date on it but, rather suddenly, Netflix stopped serving its customers and started to manipulate them in an explicit, broadcast fashion instead. I noticed the first changes introduced with the major redesign of Netflix web site during expansion of streaming content. While I understand the inevitability of streaming eventually replacing famous red envelopes with blu-ray disc, other changes are harder to understand. Netflix pretty much eliminated peer to peer recommendation of “viewers like you”, in favor of Netflix produced ratings. These seem to be manipulated by the company, much like movie reviews are manipulated in mass media to the extent that the same movie in the new streaming cue had “my” recommendation rating fully 2 points higher than its “my” recommendation in the old DVD cue. The collateral damage of this decision was that Netflix made virtually inaccessible 15 years of my personal ratings. From my point of view, Netflix deliberately destroyed 15 years of my personal memories.
What is worse, the content of Netflix program offering changed markedly. To be fair, Hollywood studios did not make it easy for Netflix to license their content, thus pushing them to produce their own content, but recently many new Netflix original productions, for example the highly touted Narcos or even the House of Cards after the initial controversial first two seasons, started to adhere rather closely to government ideology, much like the content produced by broadcast companies. At the same time, the movies from countries not aligned with US government have been removed form Netflix catalogue. For example, during latest UI redesign, the entire section of Russian cinema has been eliminated. Belgian section has been retained, so presumably the role of Belgian cinematography and directors must be more important than Russian cinematography and directors such as Eisenstein, Tarkovsky, Michalkov or Konchalovsky. Netflix recently added local commercial and political censorships to every one of the 190 countries it serves. For example, customers in Canada have access to less than 50% of shows and movies available in US. When Canadian customers protested, Netflix CEO Reed Hasting dismissed them as “small vocal minority, inconsequential to us”. Who is “us”, if not company own customers? Just like in case of old style mass media, Netflix real customer is US government now.
What will be the outcome of this change? As a customer I lost completely the faith in the accuracy of Netflix ratings. Fore me, ratings of a small number of “viewers like me” with similar viewing history and preferences, were far more relevant than the average rating of 50 million Netflix users with whom I have very little in common. Worse, it appears that ratings on some of the new Netflix produced series are simply fabricated by the company. It takes years to establish credibility, but only moments to lose it.
In my view, Netflix pioneered the concept of “personal media assistant” and it breaks my heart to see the company to abandon its users and millions of man-years of their customer data. There are others, like Apple, Google or Amazon, who currently try to create the streaming “media assistant”, as disillusioned Netflix customers like me are looking for an alternative solution. In my view however, we will not see any major breakthrough as long as all these large web companies business models are based on serving the Hollywood producers, “pushing” their content onto customers indiscriminately, broadcast style, rather than trying to understand the individual customer preferences and represent the customer rather than content producer. Sounds like a business opportunity for a new web startup to me.
