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The Netflix Approach to Movies: Notes for HR

Do you watch Netflix?  Have you ever been frustrated that the movie selection, for a lack of a better word to describe it - sucks?

Of course you have. If you're a business focused individual, you might think this fact is a canary in the coal mine - meaning it's a signal that Netflix won't be in a dominant position 2-5 years from now.  That would be a reasonable assumption - after all, if the product's not right, decreased viewership and profitability is sure to follow, right?

Wrong. As it turns out, Netflix has figured out that its customers don't really care much about what's available on the movie side of the business. I think there are some HR parallels you can learn from with this.  First the notes on Netflix from Business Insider, then we'll talk after the jump about the similarities with HR:

"No matter what movies Netflix has on its service, subscribers spend about a third of their time watching films on Netflix, according to the Best-movies-on-netflix
company's content boss Ted Sarandos.

On Monday at the UBS Global Media and Communications conference in New York, Sarandos was asked about the perceived sparseness of Netflix's movie offerings. "No matter what, we end up with about 1/3 of our watching being movies," he responded.

Sarandos cited two contrasting examples: the US and Canada. In Canada, Netflix has five major movie studio output deals, while in the US, it basically has none, with the exception of the just-starting Disney one. And yet in both places, Netflix sees about 1/3 of its viewing being movies.

Research earlier this year showed that Netflix's selection of IMDb's 200 highest-rated movies had gone down in the past two years by a substantial amount, as had its total catalog of movies. And given what Sarandos revealed Monday about the viewing habits of Netflix subscribers, that decision makes total sense. Why would you pay a bunch of money for blockbuster movie deals if it's not going to make people watch more Netflix?"

When I think about how my generation treats Netflix (as well as my teenage son), we're much more likely to binge watch a series that we are select a movie from the streaming service. There's just something about binge watching a series together that is good for relationships.  Also, if you're watching alone, binge watching provides a chance to become emotional connected with the characters, etc.

But just as importantly, I think there are some similarities to how movies are treated by consumers of Netflix with our HR practices.  

Employees act in a certain way within our companies.  There are several employee/candidate behaviors that aren't going to change much year to year, and with that in mind, there's no reason to spend more on these behaviors than you have to.  Examples include the following:

  1. Job Boards - You've got a spend. You get candidate flow and hires out of that spend, but at some point there's a diminishing point of return on additional investment in job boards.  You need to find the optimum spend, then never go over that - instead pushing additional spend to new sources that are rapidly gaining candidate attention.
  2. Employee Referrals - You've likely got a program, right? You may or may not monetize it, but spending more on referrals is not a guarantee that you'll get more flow.  At some point, you're paying more for the same number of hires, and you've just experienced what I'll call the "netflix movie effect".
  3. Employee Development - Complex one here. There's a lot of spend you can make to try and make your employees more than they are, but a lot of your employee base just wants to do some work, go smoke and leave at 4:58pm. You can spend to try and make them more, but they're not going to give you more performance given your additional spend on them. 

Netflix has learned that additional spend on movies doesn't equate to better results/profits.  We can learn a lot in HR from that Netflix lesson.

You've got a limited budget in HR.  Never feel guilty about not spending money (or more money) on things that don't produce results.


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