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?
As a product leader, your job is to delight customers in hard-to-copy, margin-enhancing ways. On the face of it, a Netflix Party feature seems to combine all three elements:
- 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.
- 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.
- 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%.
The Netflix Party Chrome extension, built by a small team of engineers unaffiliated with Netflix, provides a proof of concept. According to their page on Patreon, one million Netflix members have used the Chrome extension, and there have been more than 10 million downloads from the Google Play Store. (The team just renamed themselves Teleparty — it took that long for the Netflix lawyers to notice them!)
So, why hasn’t Netflix launched the feature? Here’s a summary of Netflix’s failed social efforts:
- 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?”
The reality is that for features like this to create a meaningful business impact, there needs to be high engagement — likely 20% of members to create a worthwhile lift via raving customers or improved retention.
If you’re reading this article, I suspect you might think Netflix Party is a great idea — you would DEFINITELY use it and, of course, this is a different time and situation with folks so isolated by COVID19. But you’re a freak. Normal people don’t read Medium posts — yet! And Netflix’s goal has always been to create an easy to use experience the entire world can embrace — not just Silicon Valley freaks and LA movie buffs.
The downside of implementing lots of features like this — lots of “five percenters” — is you create a complicated experience where the product feels like a Swiss Army Knife. “What’s this tool for? When do I use this knife?”
These five-percenters gunk up the experience and make it harder to use. And zillions of edge cases start popping up: “Hey! Why can’t I use “Party” on devices other than my laptop?!” or “How do I execute “Party” using voice on an Amazon Show device?”
Not All Good Ideas Benefit the Brand
Why won’t Netflix party? For more than two decades, Netflix has been building a product that delivers on the brand promise “Movie Enjoyment Made Easy.”
Think for a moment about the experience of forming a Netflix Party. First, you need to choose a movie everyone likes. Then, you agree on a time to watch. Finally, you hope the experience of watching a TV show/movie with friends somehow overcomes the downsides (your friends’ lame banter and the hesitancy you had about this movie choice at this particular time).
Netflix understands this. That’s why they give premium members the ability for family members to watch four simultaneous streams. Kristen and I can watch a movie in our bedroom, while Kelsey watches in her room, and Britney is on the living room couch. That’s “Movie Enjoyment Made Easy.” No debate about what movie to watch and when! And that’s why I think it’s unlikely that you’ll see Netflix Party implemented anytime soon.
Thanks for reading,
Gib
Gibson Biddle
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