After Netflix’s Q2 earnings report and subsequent drop in stock price, a litany of Forbes thought-pieces emerged about how Netflix is “failing” and “vulnerable,” and what the company should do to “save itself.” Popular suggestions from these pundits included launching an advertising business, buying a movie theater chain, and selling merchandise.
In the spirit of these articles, here is my 5-step plan for Netflix to save itself based on tried-and-true features and products that have been proven in the market over decades with trillions of dollars in revenue:
Step 1: Segment content into “channels”
Since Netflix introduced the “Watch Now” streaming feature 12 years ago, content has been arranged basically the same way — as an endless scroll of tiles under different categories such as “Trending,” “Recently Added,” and “Familiar Favorites.” These categories include a hodge-podge of different types of content, from sci-fi adventures to documentaries and reality-TV fare. Adding specific interest-based channels — think “Sci-Fi” or “The Food Channel,” would allow consumers to more quickly find the content their interested in based on their mood.
Step 2: Introduce livestreams / autoplay
Netflix’s vast and ever-changing catalog can create a paradox-of-choice for users who can’t decide what to watch. Instead, the channels described above should each feature 24/7 live-streaming content, so that a user can simply “tune-in” without needing to make any decisions. These live-streams could be on a regular weekly schedule, so that users never miss their favorite shows.
Step 3: Incorporate advertising
To bolster the company’s financials, Netflix could immediately build an advertising business, incorporating ads into all of its content for all 150+ million subscribers.
Step 4: Build a set-top box hardware device
Just as Amazon (Amazon Fire), Apple (AppleTV), and Google (Chromecast) have done, Netflix could introduce a living room device that users connect directly to their television sets and use a remote to control. This box would also allow users to download and save their favorite content for offline viewing — a feature that would justify Netflix charging an extra $5 / month for.
Step 5: Increase monthly subscription price
Given all of the additional benefits and functionality listed above, Netflix could now justify significantly raising its price.
Now imagine the total package: For ~$100 / month, you can use the Netflix box in your living room to watch a variety of branded broad and niche interest channels, each streaming live content on a regular schedule, including ad-breaks which allow you to use the restroom / check your phone without missing a beat. The future is here!
Yes, the joke here is Netflix becoming the very thing it has disrupted — Cable TV.
For an actual thoughtful and in-depth series on why Netflix is going to be just fine without buying a movie theater or selling merchandise, I highly recommend reading Matthew Ball’s REDEF series, “Netflix Misunderstandings.” The most recent installment can be found here.
Please don’t take this article seriously.