I've been a Netflix
user for three years and am a generally satisfied customer who has recommended the service to others. And yet I think their business is at risk and I won't be particularly sorry to see them die off. Why? Because they've squandered their first mover opportunity to use technology to build true stickiness into their service. They've done a great job at addressing fulfillment -- I can send back a disk on Monday and most of the time I have its replacement on Wednesday -- but they've done virtually nothing of consequence in the past three years to improve their user experience. As a result, the only retention mechanism they have, other than general customer loyalty, is the pain of migrating one's queue, and a determined competitor could easily write a screen scraper that would automatically import a person's Netflix queue into their service (and the rental history and ratings as well). So they're ripe for the picking by a well-funded, technology-savvy competitor
who can beat them on price and features. I wonder if any of those
I have numerous suggestions for how they need to improve their user experience, but I'll focus first on the ones they should
have done years ago to create customer stickiness. Not surprisingly they're all about social networks and community.
- Friends' recommendations -- I know that my mother, my in-laws, and lots of my friends use Netflix, so what do I do if I see something I enjoy and I think one of them should see it? I phone or email them with the recommendation. Instead of creating a system where I can automatically make and receive recommendations from people I know from within Netflix, they've created a general purpose rating and recommendation scheme that is virtually useless. I can't remember the last time I made a rental decision based on those. When I rate a disk that I've returned, I should be able to see a friends picker and choose other people to whom to recommend it (and how highly). And when others recommend disks to me, I should get to see that as well, perhaps even via an email notification.
- What my friends are watching -- I should be able to allow my friends to see my queue and be able to see theirs if they let me. For extra credit I should be able to annotate their queue so that they can see my comments on what they're planning to rent or view their comments on what they've recently returned.
- Discussion bulletin boards -- Netflix should host or sponsor bulletin boards to discuss movies to foster a sense of community, with one-click rental access any time a title is mentioned.
Any of those things, especially the first two, would have made the switching cost to a competitor painfully high.
While I'm on a roll, I might as well mention a few of their other lamenesses:
- I should be able to put anything in my queue, even if there's no imminent plan for its release. Who cares that there's no official release date for the fifth season of The Sopranos? I know it's going to be out on DVD at some point, why should I have to remember when? It's a logical improvement to one of my favorite Netflix features: When a movie I'm interested in comes out in the theaters, I put it in my queue so that I remember to rent it if I don't get around to seeing it in the theater (which these days is most of the time). The way I see it, if it's listed in IMDB, I should be able to put it in my queue. Even if they have to create a third "No known current release" queue that has the ability to promote automatically to the "Awaiting Release" queue.
- Support for multi-disk sets is poor. One of my first Netflix experiences was trying to rent the then just-released second season of The Sopranos. I put all of the disks at the top of my queue, and what happened? The first disk of the series wasn't available because everyone else wanted it too, so they sent me the second disk in my queue, which was the second disk in the series. Nowadays I work around this by always putting at least one consolation disk between the next one I want and the one after it, so I can ensure that I don't get them out of order. What a waste of time for me. Oh yes, they did add support for multi-disk sets a while back, but all they did was make it possible to add an entire set to the queue as individual items with a single click.
- There should be a way to have multiple queues per account or some other way to organize my queue so that it's not just a monolithic list. I could elaborate on family scenarios and the like but I think the value is pretty obvious.
- The user interface seems to be optmized for people with small queues. OK, so at around 240 my queue is probably much longer than average, but their user experience doesn't scale well beyond around twenty. Their renumbering system is byzantine if you're trying to rearrange more than one movie at a time. Have these people heard of arrow buttons or drag and drop?
I happened to have cause today to request my entire rental history (admittedly a cool feature) and decided to see how much I'm spending relative to traditional rental options. Thanks to Excel
I was able to do some quick analysis. I've rented 120 disks in 38 months, which at around $20/month works out to $6.33 per rental. Probably a little more if you assume that a few of those are bonus disks that would have been included if I'd rented from a video store, but in any event assume between six and seven dollars a month. It drops below six dollars a month if I compute based on their new $18/month price. So figure I'm paying a 100% premium for the convenience and great selection. At these prices I'd say it's worth it.
I also decided to see how long I tend to keep the disks, which is something I've tended to beat myself up about. Basing it on their reported shipped vs. received dates, I've returned around a quarter of the movies within nine days, half within twenty days, and three-quarters within thirty days. Better than I thought. Of course, I've kept around ten percent for more than two months.