I did the case write-up assignment this week. So I will only put highlights online today.
In addition to using their movie predictor rating they could expand that skill set to other services. Books, music, TV shows, magazines. Why not look to acquire a business in one of those spaces and test out their abilities to predict? Any business where the problem of monetizing the long tail with "lean inventory" management would fit NetFlix's core competency well.
I am surprised that the case did not mention the NetFlix competition that ran during 2006-2009. Essentially the company crowd sourced the next version of their secret sauce. This competition effectively created many “recommendation” engines. The many "sub-optimal" engines that didn’t win could be used by new or existing competitors quite easily. Also, partnerships with IMDB or RottenTomatoes could capitalize on competitive advantages by leveraging the collaborative knowledge on those services as well. Combined the data-sets of these online movie complements with the ratings / queue of NetFlix might give it a critical mass in discovering their “beachhead” in the online VOD market (though I find it extremely unlikely they could not find early adopters given their core competencies of pattern analysis and data driven recommendations) The NetFlix brand would not be diluted by partnering with smart devices such as network-enabled DVD players or set-top boxes as long as the logo appeared on the screen (or box). The company has worked too hard to build the brand equity to simply give it away as a bundled service on someone else’s platform.
As a long time NetFlix subscriber, I never knew about the NetFlix competition. Sounds like a great way to leverage public interest and creativity. Partnership with IMDB would be a great feature for movie junkies, especially when searching movies to put in their queue.
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