Netflix Sees This As A War Of 'Moments'... And Apps Are the Weaponry

• by Steve Smith , Staff Writer @popeyesm, April 25, 2013

As I have been trying to chronicle here in recent weeks through my own evolving media habits, the net effect of a true media everywhere environment could be a substantial change in how we think about media overall. As I move toward having ubiquitous access to all of my music, movies, TV shows, photos, and even TV grid on a range of devices, I start triaging content. I start thinking about how media maps against moments.

This new environment opens me up to genres and formats that I simply didn’t have the time or place for when my media consumption is anchored to specific places and devices. But it also means that as a consumer I am choosing on any given screen from a wide range of very different media experiences. Which is another way of saying that media companies in TV, music, games, etc. are not just fighting against their direct competitors within a category. They are fighting for my overall time across categories.

So a new position paper from Netflix caught my eye yesterday because it lays out a vision in which all media are fighting for attention as people decide how they are going to fill so many moments with entertainment content. The very long Netflix Long-Term View was posted to the company’s investor relations board yesterday. I just want to tease out a couple of points, but it is worthwhile perusing the whole thing to get a sense of where this company is headed.

Netflix clearly believes that apps are the medium of the future. As linear TV experiences fragment ever more, the company expects content providers to start programming as much for the app-based remote experience as they are for their linear programming. They cite the BBC as a good example of this in the ways in which it is starting to use its famously good iPlayer app as a channel for original programming. Obviously, Netflix itself has done this with its "House of Cards" series.

Not only will the apps from individual networks become increasingly important as people’s viewing habits are freed from the main TV screen, but it will challenge the service providers to try to create apps that can better mirror and aggregate all of the content that they are providing people every month on their TV screen. Netflix sees companies like itself, YouTube, MLB and iTunes now having the opportunity to build direct-to-consumer services that are wholly separate from the traditional TV content bundlers.

In a section that I found especially important, Netflix says that “our North Star is to win more of our members 'moments of truth.' Those decision moments are, say, on Thursday 7:15 pm or Monday 2:40 am when our member wants to relax, enjoy a shared experience with friends and family, or is just bored. They could play a video game, surf the Web, read a magazine, channel-surf their MVPD/DVR system, buy a pay-per-view movie, put on a DVD, turn on Hulu or Amazon Prime, or they could tap on Netflix. We want our members to choose Netflix in these moments of truth.”

Netflix is only halfway right in believing that the company that wins these moments of truth will simply have a superior user experience. For instance, the company says it is putting a great deal of emphasis on streamlining delivery, signup, billing and customer service. Well, that’s okay -- but I think they are closer to the mark when they focus on the importance of personalization within these apps.

“For Netflix, the user’s home page is the personalized ranking of what we think will be most relevant for that specific user at any given time. By analyzing terabytes of data from every recent click, view, re-view, early abandon, page views and other data, we are able to generate a personalized home page filled with the content most likely to please. Our aim is to keep inventing and tuning algorithms to generate higher satisfaction, viewing, and retention, for whatever the level of content we can afford in that territory. All of our algorithm work, like with Google search ranking, is proven or disproven by A/B testing. Only algorithms that lead to an improved experience get rolled out to everyone.”

While I have a lot of problems with the Netflix app, and sure do wish they would A/B test a broader range of interface possibilities, they were among the first and best examples of creating a truly seamless cross-screen experience for users.

But I think they are absolutely right that as media fragments across multiple devices this is going to be a war about moments. Both media providers and the marketers that work with them have to start thinking about how they conquest not just direct competition, but rival media experiences at any given moment. What do I do in that new 10- or 15-minute opportunity where I now have a screen at hand that will play a game, grab the latest headlines, chat with a friend, watch another section of that movie you haven’t finished or see what your friends are doing?

I know I have beaten this drum before, but I don’t think that the mobile app infrastructure we now have in place is up to waging a war of moments. Cute little icons with even smaller numbers indicating new messages feel paltry compared to the communications flow that is necessary for a major media company to be top of mind with the user. Companies like Netflix not only have to make smarter use of the mobile alerting system, but we really need mobile operating systems that are helping to bring more to that screen surface that is dynamic and helps both media and marketers make their case with the user over who should win that moment.