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Do streaming services have a hidden agenda?

netflix original

Are consumers harmed by a video business promoting its own original content over content it licenses from others? The Wall Street Journal thinks there might be a problem.

Streaming services don’t just recommend what we like

In his article for the Wall Street Journal, Ben Fritz says that the recommendations a streaming service like Netflix or Spotify make to us are not based purely on our likes and dislikes. He says that there are other business reasons guiding those recommendations. He also suggests that these “other” goals aren’t necessarily in the customers best interests.

By way of example, he points out that Netflix now focuses an inordinate amount of promotional space on its own original content. If you are a Netflix user you can’t have missed the push behind shows like Ozark and Glow. Every user is seeing these promotions, even if they’ve never expressed any interest in that type of show at all. And to do it, Netflix is pushing content lists like “My programs” down below the first screen of content.

So why is Netflix making it less easy for a customer to get to their preferred shows in favor of content they may well not like?

Why Netflix pushes content we might not like

Netflix has a legitimate business reason for pushing its own content over shows and movies it licenses from others.

The television community is decidedly conflicted when it comes to licensing content to Netflix. Jeff Bewkes, Time Warner Inc CEO, says he won’t license any show episode younger than 4 years to SVOD providers like Netflix. Others have expressed similar reservation. To counter this, Netflix has dramatically increased the amount of original content it is producing.

Persuading subscribers to watch more original programming and less licensed TV content is a strategic imperative for Netflix. And that is why you see the company pushing its own content so hard in the app user interface.

What are the goals of the video app?

In the past, service providers have thought of the app interface as just a guide, simply a mechanism to connect viewers with content. Today, however, the video app is much more than a guide. To be sure, getting a consumer watching something that interests them as fast as possible is critical. However, what exactly that piece of content is that captures the viewer is where the business and customer goals meet.

In other words, the journey to content must be as short as possible and must take customers through a list of options that:

  • Ensures they find something to watch before they get bored and leave
  • Ensures that content supporting business goals has the maximum opportunity to be selected

That is exactly what Netflix is doing when it pushes its own content first.

Are customers harmed by this?

Mr. Fritz thinks that because we don’t know the motivation behind the promotion of Netflix’ and Spotify original content there is potential for harm. However, when we go to a physical store product placement is dictated by business rules we the shopper are oblivious to. It’s not clear if we are really harmed by this.

Similarly, video service providers have legitimate business needs to push some content over others. And it’s not clear we are harmed by this either. For example, I may come to Netflix planning to catch the next episode of NCIS (from CBS), and end up watching an episode of Travelers (Netflix Original.) If I’m suitably entertained, was I harmed in some way?

The truth is, all video service providers need to be thinking about their app interface as a video store. They need the ability to bring the needs of the business together with the needs of the customer. If you would like to know more about how to do this with your video app download the free white paper Minding the Store: Why a merchandising mindset is critical to video app success.

Why it matters

Streaming services like Netflix and Spotify are pushing their own content over other licensed content.

The Wall Street Journal thinks this might be harming consumers in some way.

However, video streaming businesses are suffering harm if they are not able to boost content to users based on legitimate business needs.

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(2) Comments

  1. While I don’t like the practice, I don’t see it as particularly different from what amazon, google, and others do. The own the customer interface and bend it to their business needs rather than that of either their customers or suppliers.

    In THEORY, powerful suppliers can ask for MFN vs each other or vs the provider’s content.
    In THEORY, consumers can flee to a less “biased” service.
    In PRACTICE, the providers have dominant market power and it is very hard to blunt.

  2. This entire article is based on the principle that there two two business models, traditional and Netflix/Hulu, and that nothing else exists or ever will. And this is far, far from correct. The TV landscape is changing as it should be. The consumer/viewer does have more power today to choose where to see content but as pointed out, they are still being manipulated. The issue isn’t just self-serving recommendations, it’s the “programming” and greenlighting. These are the real manipulative forms of recommendations and they are NOT based on quality of content. They are based on a whole basketball of self gratifying needs by all these Networks.

    Technology however, has allowed us at Spincast TV to transform television. We give the viewer the option to decide what to see at no charge and as we grow and bring on more programing and broadcasters, the choices will grow too. And that, is how TV should be – let the viewer actually decide.

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