Netflix and the terrible tendency toward isomorphism
Since the value of Netflix’s share price began plummeting in November due to some numbers that seemed to portend an overly competitive market and a stagnated growth, the US subscription streaming company’s management has been mulling ways to regain traction, and they’ve now come up with a plan.
What’s the problem? As I indicated in my previous article on the subject, the people now making the decisions about Netflix’s fate are not those who founded it and made it what it is, but a second-generation management that also, to make matters worse, comes from the traditional industry, with the consequent culture clash.
The evidence is clear if we take a look at the decisions the company is taking, which are a radical departure: fighting password sharing, along with advertising for users in the lowest price bracket, and live content such as contests, comedy and the like. All of these measures may make sense in terms of the numbers, but they are a far cry from what defined Netflix and what its founder did when the management was in his hands.
Fighting password sharing? A significant percentage of your users are not paying for the service but using the passwords of others may be seen as accepting revenue loss for a company dedicated to streaming, but Reed Hastings’ view was always that this did not hurt the…
