Why Won’t Netflix Party?

Disney+ has a shared viewing mode. So do Amazon Prime Video and Hulu. There’s even a “Netflix Party” Chrome extension available in the Google Play store. So, why won’t Netflix launch the feature?

  1. Delight. During COVID19, when we all crave connection, enabling members to watch the same TV show or movie simultaneously makes sense. Even more, letting them chat, heckle, and compare notes on the movie sounds fun.
  2. Hard to Copy. Netflix’s APIs (Application Programming Interfaces) make it easy to enable features like this, while other companies would struggle. But the stronger hard-to-copy effect is a network effect. If you connect with your friends on Netflix, you’re less likely to quit and leave your friends behind.
  3. Margin-enhancing. A Netflix Party feature could enhance profits in two ways: 1) Members rave about the feature, thus attracting more new members, and 2) The feature improves retention and thus lifetime value. If the feature keeps one in a thousand members from leaving, it could improve the monthly cancel rate from 2.0% to 1.9%.
  • In 2008, Netflix launched a “Party” feature on Xbox. At peak, 5% of Xbox members used the feature, and it was killed in 2010.
  • Its “Friends” feature enabled Netflix members to share movie ideas with their friends. “Friends” was killed in 2010 — only 5% of members engaged with the feature. The problem: your friends have sucky taste in movies; plus, you don’t really want your friends to know about all of your guilty pleasures. “Indian Matchmaking,” anyone? “Selling Sunset?” “Cake Boss?”



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