Recently I read a remarkable document from Netflix aimed at investors and titled “Netflix Long Term View.”
And the fact that the phrase “long term” was in a document from a public company was only one remarkable piece of the story.
A key chunk in the document outlines the central focus of Netflix on doing what it calls “winning more moments of truth”:
Our North Star is to win more of our members’ “moments of truth”.
Those decision moments are, say, on Thursday 7:15 pm or Monday 2:40 am when our member wants to relax, enjoy a shared experience with friends and family, or is just bored. They could play a video game, surf the web, read a magazine, channel surf their MVPD/DVR system, buy a pay-per-view movie, put on a DVD, turn on Hulu or Amazon Prime, or they could tap on Netflix. We want our members to choose Netflix in these moments of truth.
We win those moments of truth when members expect, based on their prior experience with us, that Netflix will be pleasurable, compared to all those other options. The pleasure comes from our simple experience for choosing, control over when to start/pause/resume the video, and from content that suits their taste and their mood. When we deliver enjoyment, members watch more Netflix, continue their membership, and evangelize Netflix to their friends.
Hey look: Netflix has a “North Star,” and it’s not to maximize profits in the current quarter. It’s based on customer satisfaction.
And notice this: Netflix clearly recognizes that it competes not simply against DVD’s or Redbox or HBO but against other forms of distraction and entertainment from other categories. Time is scarce and once consumers decide any unit of time will be devoted to entertainment, then all entertainment options at hand become competitors to each other, including radio.
Radio, you’re competing against every other form of distraction and entertainment for every unit of every consumer’s entertainment (or information) time.
This is the primary “threat” to or “opportunity” for radio.
This is why time-spent-listening to radio is dropping.
Not simply because of Pandora or complicated car dashboards or the presumed lack of FM chips in mobile devices.
Time-spent listening is dropping because it can.
So what do you do about that?
Here’s what you do: Find your North Star and benchmark your entertainment experience against that of all other entertainment alternatives and distractions on all other platforms.
But what does this have to do with PPM ratings, you ask?
What will you do when buyers stop buying not because the ratings are too low but because the content and experience your brand provides doesn’t stack up in a world where any entertainment I want is mine, any time I want it?
How will you “deliver enjoyment”?