Tuesday, September 29, 2009

The Future of Netflix

Netflix Everywhere: Sorry, Cable, You're History

The article starts with a story about Reed Hastings canceling a product just before launch (it was spun off and became the Roku player) and rapidly reinventing Netflix's strategy:

Rather than design its own product, it would embed its streaming-video service into existing devices: TVs, DVD players, game consoles, laptops, even smartphones. Netflix wouldn't be a hardware company; it would be a services firm.

The dream of routing around cable companies just may be in sight.

You'll never hear Hastings point that out, however. Unlike many in the tech world, he's a quiet disrupter, sabotaging business models silently and irretrievably.

So far, Hastings has avoided the wrath of the giants by building his Netflix service surreptitiously, slowly amassing his library of streaming content and giving viewers new ways to access it. And now, even if the cable and content companies do take him on, it may be too late. Hastings' Trojan horse—Netflix's software, embedded on myriad consumer devices—is already in place.

Data mining to the rescue! I love stories of how companies use existing data to generate new revenue or information for the company.

Sarandos asked his team to use their data-mining skills to help him find deals. While other video providers might ask studios for a sack full of sure things—new releases by big-name stars—Netflix's engineers could dig through their queue and review databases to find sleeper hits that its users actually wanted to watch but that studios might be willing to license for a pittance.

Still, the deal kicked off what Hastings hopes will be an unstoppable virtuous cycle. If Netflix can use the Starz offerings to sign up more subscribers, those subscription fees will generate more revenue. And with more revenue, Netflix can afford to pay more studios for rights to more films—which will draw in still more subscribers. And so on.

And this is a great mission statement from Reed Hastings:

"Today you love one out of three movies that you watch. If we can raise that to two out of three, we can completely transform the market and increase human happiness."

How to keep your mouth shut

As a rule, if you insist on speaking your mind, you will inevitably find yourself in an environment where everyone hates you. Most people can not handle the truth. And the more you shove it in their face, the easier it is for them to ignore you. You simply become the person who always complains, rendering any good ideas you have entirely impotent. Your ideas will be shot down simply because of the reputation of the mouth they come from.

The trick to keeping your mouth shut is to hold the desire to effect change above your desire to tell people how wrong and bad they are. The later almost never leads to the former.

No matter how right you are, if you care about effecting change, you should never open your mouth without some sense of who will agree with you and who won’t.

Wednesday, September 16, 2009

Leadership Video

From XPLANE and Harvard Business School, via Presentation Zen

Monday, September 14, 2009

"We are the glue holding ourselves together."

Wired.com article

I wouldn't say that the article itself is particularly well-written, but certainly the insights revealed by the study of the Framingham papers are quite interesting.

By studying Framingham as an interconnected network rather than a mass of individuals, Christakis and Fowler made a remarkable discovery: Obesity spread like a virus. Weight gain had a stunning infection rate. If one person became obese, the likelihood that his friend would follow suit increased by 171 percent. (This means that the network is far more predictive of obesity than the presence of genes associated with the condition.)

It has long been recognized, for instance, that the human capacity for close friendship is remarkably consistent. People from cultures throughout the world report between four and seven bosom buddies. "The properties of our social networks are byproducts of evolution," Christakis says. "The assumption has been that our mind can handle only so many other people."

After analyzing thousands of photos, the scientists found that, on average, each student had 6.6 close friends in their online network. In other words, nothing has really changed; even the most fervent Facebook users still maintain only a limited circle of intimates.

Because networks transmit the stuff of life—from happiness to HIV—evolution has generated a diversity of personality traits, which take advantage of different positions within the group. There are wallflowers and Wilt Chamberlains, shy geeks and "super-connectors." According to Christakis and Fowler, there is no single solution to the problem of other people. Individual variation is a crucial element of every stable community, from the Aborigines of Australia to the avatars of Second Life.