What Netflix Could Teach Hollywood

This is really the best argument for Netflix: the ability to rent any movie currently on DVD, and not just the 1,000 most current titles, as selected by your local video rental chain store.

What Netflix Could Teach Hollywood
Five million families now have a Netflix account, making it one of the most impressive companies around.

...
Yet “The Conversation” was on its way to the movie graveyard just a few years ago. Since video stores have room for only a few thousands titles, some didn't carry it, and it was slowly being buried under the ever growing pile of newer films at other stores. It would have been easy a decade ago to imagine a time when few people would ever watch “The Conversation” again.

Then came Netflix. The Internet company with the red envelopes stocks just about all of the 60,000 movies, television shows and how-to videos that are available on DVD (and that aren't pornography). Just as important, for the sake of “The Conversation,” Netflix lets users rate movies on a one- to five-star scale and make online recommendations to their friends.

The company's servers also sift through the one billion ratings in its system to tell you which movies that you might like, based on which ones you have already liked.

The result is a vast movie meritocracy that gives a film a second or third life simply because — get this — it's good. Last year, “The Conversation” (average rating: four stars) was the 13th-most-watched movie from the early 1970's on Netflix.

Its return from oblivion is a nice illustration of a brainteaser I have been giving my friends since I visited Netflix in Silicon Valley last month. Out of the 60,000 titles in Netflix's inventory, I ask, how many do you think are rented at least once on a typical day?

The most common answers have been around 1,000, which sounds reasonable enough. Americans tend to flock to the same small group of movies, just as they flock to the same candy bars and cars, right?

Well, the actual answer is 35,000 to 40,000. That's right: every day, almost two of every three movies ever put onto DVD are rented by a Netflix customer. “Americans' tastes are really broad,” says Reed Hastings, Netflix's chief executive. So, while the studios spend their energy promoting bland blockbusters aimed at everyone, Netflix has been catering to what people really want — and helping to keep Hollywood profitable in the process.

Not that we don't like to watch current cinema (we saw King Kong for example, which was one step above unwatchable), but Netflix caters to our inner film historian.

Tags: Netflix