Netflix COO Greg Peters On Pricing Strategy, The “Endless Scroll” And Shrinking Theatrical Movie Windows
Greg Peters, the product chief at Netflix who was promoted to the additional role of COO last year, views the shrinking of theatrical windows as inevitable.
“It’s what consumers want,” he said. “It’s hard to buck that trend for too long and I think that’s eventually where things go.”
Long before Covid-19 forced an industry rethink of exclusive theatrical release windows (which have been jettisoned by Warner Bros and, in some cases, by other majors), Netflix started pouring billions of dollars into films. The push has yielded major awards contenders like The Irishman, Roma and this year’s large crop, including Da Five Bloods, Mank and I Care a Lot. It has also produced wide-audience films with traditional Hollywood DNA like The Old Guard, Extraction and Six Underground. Talks between exhibitors and Netflix have not led to a distribution breakthrough, though Cinemark has been tested shorter Netflix windows. The chain’s CEO, Mark Zoradi, recently said the company is in active booking negotiations with several streaming outlets.
Along with windows, Peters touched on pricing, global expansion, product tweaks and other topics during a virtual session at Morgan Stanley’s Technology, Media & Telecom Conference.
Swinburne asked Peters how he responds to streaming rivals criticizing it for offering an “endless scroll” of programming in its user interface. Several new streaming entrants, including HBO Max and the soon-to-rebrand Paramount+, have specifically knocked Netflix for inducing an overwhelmed sensation in many viewers.
“We have created the most compelling collection of entertainment available at the click of a button that’s ever existed,” Peters said. “That’s incredible for consumers and for our members. For us, as user experience designers and builders, it creates a challenge because across that wide range of choice, our job is to distill that down into something that makes it easy and fun and exciting to pick what you want to watch next. We wake up every day thinking about how to make this better. So, we’re far from content with where we are and there are hundreds of tests that are being run to try to make it better.”
At the same time, huge viewing of shows like Bridgerton and Lupin in their first four weeks (at 82 million and 70 million viewers, respectively) proves the Netflix interface is effective, Peters added.
The company has implemented some important changes, like an on-screen top 10 popularity ranking and a “shuffle play” button, Peters noted. The company is also developing more tools for multi-generational viewing, he said, enabling three generations of a family to select crowd-pleasing titles.
A massive influx in original programming in recent years has added additional complexity to the process of suggesting programming. Originals pass quickly from completely unknown to “blockbuster” status. “We have originals that were in that ‘challenge for awareness’ state that are now in a completely recognized state,” he said, citing Stranger Things and Bridgerton.
Asked by moderator and Morgan Stanley analyst Benjamin Swinburne about the company’s approach to pricing, Peters said it “mostly involves listening to members.” Over the years, he continued, the company has “gotten increasingly better at being able to interpret those signals.”
Netflix recently upped the monthly cost of its most popular U.S. subscription plan, its first hike in two years, making it $14 a month.
In Asia, where Netflix will see more growth in coming years compared with more mature Western markets, Peters said the approach is not fundamentally different from that taken to other global regions. Mobile-only plans were tested in several Asian markets, Peters noted. “It’s a fertile space” for experimentation and getting up to speed with what consumers expect and what they will pay.
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