Commentary

Why The Paradox Of Choice Doesn't Apply To Netflix

A recent article in MediaPost reported that millennials -- and baby boomers, for that matter -- prefer broad choice platforms like Netflix and YouTube to channels specifically targeted to their demo.

Author Wayne Friedman mused on the possibility that targeted channels might be a thing of the past: “This isn’t the mid-1990s. Perhaps audience segmentation into different networks -- or separately branded, over-the-top digital video platforms  -- is an old thing.”

It is. It’s aimed at an old world that existed before search filters. It was a world where Barry Schwartz’s "Paradox of Choice: Why More is Less" was a thing. That’s not true in a world where we can quickly filter our choices.

Humans in almost every circumstance prefer the promise of abundance to scarcity. It’s how we’re hardwired. The variable here is our level of confidence in our ability to sort through the options available to us. If we feel confident that we can heuristically limit our choices to the most relevant ones, we will always forage in a richer environment.

In his book, Schwartz used the famous jam experiment  of  Sheena Iyengar to show how choice can paralyze us. Iyengar’s research team set up a booth with samples of jam in a gourmet food market. They alternated between a display of six jams and one with 24 options. The smaller display outperformed the larger one by a factor of 10 to 1 for selling the jams. 

The study “raised the hypothesis that the presence of choice might be appealing as a theory,” Iyengar later said, “but in reality, people might find more and more choice to actually be debilitating.”

Yes and no. What isn’t commonly cited is that 60% of shoppers in the study were drawn to the larger display, while only 40% were hooked by the smaller one. Yes, fewer bought, but that probably came down to a question of being able to filter, not the attraction of the display itself.

Also, other researchers (Scheibehenne, Griefeneder and Todd, 2010) have run into problems trying to verify the findings of the original study. They found that “on the basis of the data, no sufficient conditions could be identified that would lead to a reliable occurrence of choice overload.”

We all have a subconscious “foraging algorithm” we use to sort through the various options in our environment. One of the biggest factors in this algorithm is the “cost of searching”: How much effort do we need to expend to find the thing we’re looking for?

In today’s world, that breaks down into two variables: “finding” and “filtering.” A platform that’s rich in choice -- like Netflix -- virtually eliminates the cost of “finding.” We are confident that a platform offering a massive number of choices will have something we will find interesting.

So now it comes down to “filtering.” If we feel confident enough in the filtering tools available to us, we will go with the richest environment available to us.  The higher our degree of confidence in our ability to “filter," the less we will want our options limited for us.

So, when does it make sense to limit the options available to an audience? There are some conditions identified by Scheibehenne at al where the Paradox of Choice is more likely to happen:

Unstructured choices – The harder it is to categorize the choices available, the more likely it is that it will be more difficult to filter those options.

Choices that are hard to compare to each other – If you’re comparing apples and oranges, either figuratively or literally, the cognitive load required to compare choices increases the difficulty.

The complexity of choices – The more information we have to juggle when we’re making a choice, the greater the likelihood that our brains may become overtaxed.

Time pressure when making a choice – If you (figuratively) hear the theme song of "Jeopardy" when you’re trying to make a choice, you’re more likely to become frustrated when trying to sort through a plethora of options.

If you are in the business of presenting options to customers, remember that the Paradox of Choice is not a hard and fast rule. In fact, the opposite is probably true: The greater the perception of choice, the more attractive it will be. The secret is in providing your customers with the ability to filter quickly and efficiently.

2 comments about "Why The Paradox Of Choice Doesn't Apply To Netflix".
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  1. Ed Papazian from Media Dynamics Inc, July 10, 2018 at 5:21 p.m.

    Interesting piece, Gord. I believe that there is a tendency to assume that most people know---more or less---what they want to watch at a given monent in time and that this probably applies most of the time. In which case the ability to filter out choices from a large menu of possibilities is important. However I'm not so sure about that. For example, how do we discover "new" content types or shows that we are not familiar with? Would we have missed "All In The Family" or Cheers"?Are these automatically filtered out as we have no experience with them? Also, much of what we watch is generic in nature---news, political commentary, talk, varieties, sports, etc. ---That, too poses a filtering issue as we may find ourselves being led to the same formats and content supliers over and over again, when a more diversified approach could serve us better.

  2. oded napchi from hiro-media, July 11, 2018 at 5:44 a.m.

    Interesting insight, especially the difference between filtering and choosing. i tend to agree that schwartz experiement should be rechecked and reevalued. On the other hand, i think there are some other theories that reflect the same insight - people prefer not to choose. Dan Arieli's thesis claims (and sorry for making it so shallow) that on any given issue, majority of people will not have an opinion hence will prefer not to choose but recieve a recommendation. The human nature (unlike what was implied) itself is geared toward recieving orders and not choosing. We are a pack oriented spiecy, like gogs and unlike cats.
    We have 250 years of democracy and over 50000 years of monarchy/ alpha type in our history...
    While we love to see big things in big numbers we do not like to choose.
    Getting back to your analasys, i would claim that there is a big difference between different people and their will to choose. on avarage, ~10% will prefer to choose from a wide variety while the rest will prefer to choose from a limited variety or recieve a recommendation
    . these 10% will be different people in each decision type (i.e i have opinions once it is related to education, i dont have once its related to fashion)

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