That’s right. I finally broke down and joined Netflix. Actually, I’d already signed on for 2 free weeks during my last semester of college. Of course, I had to drop it right away because of the student budget. I had a series of massive papers and a presentation examining the online DVD rental company and I wanted some real exposure just to make sure I knew what I was talking about.
I was totally fascinated by the company’s business model, blown away by the way it moves DVDs around the country with very little inventory in-house on any given day. My group spend several pages explaining “Long Tail” economics, only we didn’t call it that because we weren’t subscribed to Wired and didn’t know it had a name. It may sound a little trite, but the concepts we learned will revolutionize business and a lot more. Basically Netflix is able to blow Blockbuster out of the water by serving hundreds of very small niches that are very important in the aggregate. Blockbuster (in it’s brick-and-mortar stores) simply can’t supply small niches because a low-demand movie can’t pay the rent on its shelf-space.
And that’s why I’m switching. Netflix has so much more selection than your local brick-and-mortar rental store, and the experience is way better. Instead of looking through the same crappy “hits” at Blockbuster, I go online to Netflix and rate the movies I’ve seen. The Netflix recommendation engine then leads me to other movies. If you Liked “Amadeus” you’ll probably like “Ghandi”. If you liked “Ghandi”, you’ll probably like “Hotel Rwanda”, “Rabbit-Proof Fence”, “Waking Ned Devine”, “The Dish”, “October Sky”, etc.
But there’s so much more. Documentaries. TV shows. Music DVDs from Jethro Tull to Thelonious Monk. RSS feeds make it easy to browse new releases, and I can opt to have R-rated movies not displayed. Can I just tell you how much time that saves? I’m not going to become a movie nut, because I do believe there is such thing as too much entertainment, but for the little time that I have to spend on entertainment, this is just so much better.
All in all, Reed Hastings is a genius. Netflix continues to grow, while Blockbuster (despite it’s copycat online ventures) hasn’t turned a profit in years. Long Tail Economics will change American culture as taste are allowed to become less homogenized. Independent filmmakers and publishers will be able to find an audience without having to appeal to the lowest common denominator. The internet will further this phenomenon as content that was unavailable due to the prohibitive economics of physical distribution channels can be accessed by anyone anytime. These dynamics already affect everything from CD sales, to software, to journalism; and I believe this is only the beginning. Long live the Long Tail!