Netflix Vs. Cable TV

Last fall, I studied off-campus in Philadelphia. The first week of the program, they sent us out into the city to find housing and furniture. By the end of that week, I did have roommates and an apartment, but we rented minimal furniture to save money. Our TV ended up being one that we found on the street. We propped it up on a cardboard box that slowly began to sag over the weeks, and often it was a gamble whether or not the picture came through.

Though we paid for cable, I ended up turning to Netflix during those few months. It was much simpler than fiddling with the old, boxy TV, and I liked being able to watch a whole series at my own pace.

This experience has made me curious about Netflix versus cable usage. A recent article on Mashable delved into this topic; specifically, looking into usage during the summer. Perhaps unsurprisingly, the article reveals that cable TV is still dominant.

Roughly 99% of U.S. households (which total about 115 million) have a TV, and 56% of those have cable. Netflix only has about 48 million members worldwide. Additionally, Netflix has not reported increased subscribership during the summer months. Its peak months are January through March and October through December. However, there is about a 30% increase in family and kids content viewing hours during the summer.

Now that I have a properly functioning TV, I am once again a happy cable TV viewer, while still a Netflix subscriber. In fact, when I returned home to Indiana in the winter, I had an entire lineup of TV shows recorded on the DVR to catch up on. So while I went a long period of time without watching cable, I know that I would not completely forgo it, either.

Plight of Blockbuster Proves You Must Innovate or Die

In Indiana, we're blessed to have a culture of business innovation and entrepreneurial drive. This article from Hootsuite explains why businesses must never lose that passion for innovation.

When some companies stop innovating, it can literally kill them.

Remember Blockbuster?

Just 10 years ago, with 8,000 stores and $3 billion in annual revenue, Blockbuster was easily the planet’s biggest video chain. Today, after bankruptcy and massive closures, it’s limping along with 500 stores. And their days seem numbered.

What happened? Netflix happened. Redbox happened. Streaming video happened. The world and the technology surrounding how people like to watch stuff changed. Blockbuster didn’t.

And there are many other examples out there, of big brands who faced the same fate. The latest story making waves is that of RIM, formerly known as Blackberry, who—after years of struggling to stay afloat in the highly competitive smartphone market—announced this week they are looking at the possibility of selling off the company…

So to avoid this, I’ve embraced a few innovation strategies from some of the best business minds out there:

1. Let them chase rainbows

Give employees in-office time to explore their craziest ideas and passion projects. This concept is actually decades-old, but it’s still around because it’s effective. Major US corporation 3M’s unwritten “15-percent time” rule, for instance, has been around since 1948. It encourages its scientists and engineers to spend up to 15 percent of their working hours pursuing their own projects, even if they have nothing to do with their actual jobs. The program has resulted in the development of many of 3M’s top-selling products, including Scotch tape and the Post-it note.

2. Start a skunkworks

Have a secret innovation lab somewhere in your business. “Skunkworks,” is a small group within an organization that is given a high level of independence to research and develop secret projects, often in the spirit of radical innovation. Google’s skunkworks is their top-secret Google X Lab, which gave birth to Google Glass. Current Google projects that have emerged from the lab are a driverless car and Project Loon, “a network of balloons traveling on the edge of space,” that will give internet access to people in rural and remote areas.

Amazon has a similar group, called Lab 126, from which the Kindle was born. It’s reportedly now developing a 3D Kindle. And last year, LinkedIn launched its own unique skunkworks-type initiative called [in]cubator. Under the program, any employee at LinkedIn can, up to 4 times a year, pitch an idea to a panel of their bosses (which includes CEO Jeff Weiner). If approved, the person is granted up to three months of work time to turn it into a reality with a designated team.

3. Have Hackathons

Set aside days for employees to run wild with their best new ideas. Working in the technology industry for over a decade, I’ve seen firsthand that great ideas emerge when people feel free. They don’t tend to surface in high-pressure situations, like in boardrooms with bosses standing overhead. So the hackathon, or hack day, is a great way to facilitate creative brainstorming. This is a fairly casual, in-office event that can last anywhere from a day to a week. Employees come together to share great new ideas and ultimately pick the best ones to pursue further.

While Hackathons originally were events for developing new software technologies, many industries have embraced the hackathon for all-around brainstorming and innovation. One of the most interesting examples is Brainhack, a three-day hackathon aimed at fostering innovation in the field of brain science.

My company also holds Hoot-Hackathons, two-day events which allow employees to freely pitch ideas, work with new people, and build new things. These events foster a culture of innovation and gets people enthusiastic about new ideas. Plus, it doesn’t cost a lot.

Unlimited Vacation Days? Not That Crazy, According to Inc.

We could all use some good old R & R. Like most of us, I wouldn’t mind more days off to experience it. Just think of what I could do with all that extra time: go to state parks; make my own ketchups; or start a rock band consisting of only red heads — "The Ginger Blossoms." (Oh, also, it would strictly be a Gin Blossoms cover band — and we’ll probably just play "Hey Jealousy" over and over… enjoy the concert.) 

To my delight, an article in Inc. contends that the concept of limited vacation days might be getting a little antiquated. 

The 9 a.m.-to-5 p.m. workplace is almost dead. Throw your preconceived notions about vacation out the window and give your employees the no-strings-attached, unlimited vacation days they deserve or you’ll soon be a dinosaur.

With an unparalleled culture in which our people actually enjoy coming to work (see Your Employees Need a Treehouse and Let Your Employees Choose Their Titles) as the foundation, every last Red Frog employee is unflinchingly focused and devoted to our mission. Producing vast amounts of quality work is the norm, so we reward them with unlimited vacation and they, in return, reward Red Frog with outstanding work that blows me away every single day.

Taking vacation at Red Frog is encouraged (and even celebrated). And it’s not abused. Ever. By anyone. Simply make sure your work is getting done and make sure you’re covered while you’re away and that’s it—no questions asked.

The pessimists and naysayers have said this policy would either be abused or that it’s not entirely real—that our employees feel pressured to never take off. I assure you they’re underestimating a positive work culture and are simply wrong. Also, I feel sorry for their workplace.

Through building a company on accountability, mutual respect, and teamwork, we’ve seen our unlimited vacation day policy have tremendous results for our employees’ personal development and for productivity. There. I said it. I think Red Frog is more productive by giving unlimited vacation days. Here’s why:

  1. It treats employees like the adults they are. If they’re incapable of handling the responsibility that comes along with having unlimited vacation days, they’re probably incapable of handling other responsibilities too, so don’t hire them.
  2. It reduces costs by not having to track vacation time. Tracking and accounting for vacation days can be cumbersome work. This policy eliminates those headaches.
  3. It shows appreciation. Your employees will need unexpected time off and some need more vacation than others. By giving them what they need when they need it, you show your employees how much you appreciate them and they reciprocate by producing more great work.
  4. It’s a great recruitment tool. We hire a mere one out of every 750 applicants at Red Frog. When you combine fantastic benefits with a positive culture, it’s noticed.

Furthermore, the newsletter HR Specialist lists a couple of current examples:

  • At tech giant IBM, each of its 355,000 workers earns three or more weeks’ vacation each year, but the company says it doesn’t officially keep track of time off.

  • Netflix lets its 400 salaried workers take as much vacation time as they want, saying workers are evaluated on performance, not "face time."

Hat tips on the info to Chamber staffers Ashton Eller and Michelle Kavanaugh.

Netflix CEO Faces Fire for Missteps

The New York Times conducted a pretty intense Q & A with Netflix CEO Reed Hastings following the Qwikster debacle last month. Likely some lessons here about long-term thinking — and facing the proverbial music. A sample:

Part of Steve Jobs’s legacy is how incredibly well he managed the Apple product rollouts. What do you think Jobs, who never minced words, would say about how Netflix has operated in the last three months?

I’m not going to put words in a deceased man’s mouth.

But you really botched the handling of the DVD spinoff, Qwikster. In your recorded launch announcement, you flubbed your lines. You somehow neglected to secure the Qwikster Twitter handle. Then, facing a backlash from shareholders and consumers, you put the kibosh on the whole idea. Seriously, what’s the deal?

Over the last couple of years, we’ve been moving toward streaming, doing the Starz deal, doing the Xbox deal. We simply moved too quickly, and that’s where you get those missed execution details. It’s causing, as you would expect, an internal reflectiveness. We know that we need to do better going forward. We need to take a few deep breaths and not move quite as quickly. But we also don’t want to overcorrect and start moving stodgily.

Last month, when announcing Qwikster, you apologized for the way Netflix handled its price hikes, writing, “In hindsight I slid into arrogance based upon past success.” But wasn’t introducing Qwikster the way you did the most arrogant move of all?

No, I think it was just a mistake in underestimating the depth of emotional attachment to Netflix.

I’m curious if you could have done any kind of research — or even a select-market rollout — that could have anticipated this?

I don’t know of any Internet service that opens on a regional basis. Our focus-group work concentrated on trying to understand consumers’ perspectives on names other than Netflix.

The company’s stock has fallen from more than $300 in July to under $120. More than $9 billion of market capitalization has disappeared. For the benefit of shareholders, have you considered stepping down?

No, not for a second. I founded Netflix. I’ve built it steadily over 12 years now, first with DVD becoming profitable in 2002, a head-to-head ferocious battle with Blockbuster and evolving the company toward streaming. This is the first time there have been material missteps. If you look at the cumulative track record, it’s extremely positive.

Netflix Raises Rates: So What?

If you’re a Netflix subscriber, more than likely you’ve heard about the impending rate increase that is coming September 1. Or, if you’re brand new to the DVD-sharing/instant online video streaming service, your new rates go into effect immediately.

It’s a service that I pay for and thoroughly enjoy as a connoisseur of television and movies. And one of its greatest selling points is how cheap it is – especially when I used to travel to the video stores of yore and pay $4 or $5 per video. (I wonder if my children will even know what a video store is?) Honestly – my husband and I sat down and did the math of what we were spending at the store versus how much we would spend with Netflix. There was no competition back then and there still isn’t competition today.

The plan that we have now (all instant streaming and two DVDs at a time through the mail) runs about $16. Apparently with the new prices, that plan will go up to $20 per month. Still cheaper per month than the gym (and its monthly membership) that I never go to.

Eight bucks a month will continue to get you instant streaming and if you want just one DVD at a time paired with the streaming, you’ll pay $16.

Seems that many of the loyal Netflix subscribers are royally ticked off that their rates are going up (want to see some angry comments – go visit Netflix’s Facebook page. Beware, there is some nasty language!). I think a chill pill is in order.

I can’t be too surprised at the price hikes: I’ve always wondered how the company is able to make it so cheap. While I’m sure there’s not a whole lot of overhead, everyone knows how expensive mailing anything is and the company mails DVDs in numbers I can’t even imagine. Also, the copyrights to all of your favorite shows and movies don’t come cheap.

Honestly, it’s a silly thing to get mad about. Maybe if it was for food, utilities or some other necessity in life, I could get behind a movement against 60% rate hikes. But this is just entertainment for entertainment’s sake. Let’s protest something that actually matters.