Netflix is Driven by Hits
A story in the Wall Street Journal Online reports that ‘hits’ are still a driving force the entertainment industry, accounting for large percentages of annual profits.
According to the article, Netflix is no exception, as 50 (the ‘hits’) of its 60,000 titles typically generate 30% of all rentals. The main motivation behind the article is to respond to Chris Anderson’s “Long Tail Theory,” which predicts that, due to internet retail, the sum of “misses” purchased by consumers will come to equal that of “hits.” While I am not knowledgeable enough about this theory to debate its merits (see Anderson’s own response to the article here) I do find the Netflix stats to be rather interesting.
The main reason why I like Netflix is that it offers such a wide selection of films. But I never have kept and never will keep track of how many of my queued movies are “new” and how many are “old” or how many are “popular” and how many are “indie.” Focusing on this sort of thing is what fuels snobbiness and the closedmindedness that those who only take in popular culture are often criticized for in the first place. In any case, I am a bit surprised by the Netflix stats simply because I am a bit surprised that not everyone is like me.
But then again, 3 out 10 isn’t really that much, considering that the the 50 films that make up this 3 are the ones that Netflix just so happens to be pimping the hardest. Considering the barrage of advertising for newer movies that we are faced with, it really isn’t that shocking that they make up a big chunk of rentals. People are simply more interested in what is new and in what others like themselves have seen. Culturally, not much more can be said about these stats beyond this. “New” doest not mean “bad,” just as “old” does not mean “good.” There are plenty of good new movies. Until someone is able to figure out whether or not this 30% is mainly crappy movies (not just new movies), I refuse to draw any conclusions from it.
Watch the debate unfold at Hacking Netflix.
UPDATE: A recent article in the New York Times by Lorne Manly offers an interesting gloss of the Long Tail Theory and some of the cultural trends that it, if true, may be suggesting.