In my new book, Jump the Curve, I cite Reed Hastings — the CEO of NetFlix—as an individual who was able to “jump the curve” because of his ability to understand in the mid-1990s that eventually advances in data storage technology would allow his company to send movies through the mail (in the form of DVD’s).
More recently, NetFlix jumped the curve by tapping into the power of the open-source movement by offering a $1 million prize to anyone who could increase the company’s recommendation algorithm to increase sales by 10%. The benefit for NetFlix, of course, is that it will sell more movies by better matching recommendations to customer’s preferences.
Well, it now appears that Reed Hastings and NetFlix have again jumped the curve. Earlier this week, the company announced it was teaming up with LG to provide movies on demand directly into people’s homes. In addition to being another knife in the back of your local neighborhood movie rental store, the move is sure to increase NetFlix’s sales for three reasons.
First, it will save people from having to wait for their next movie to arrive via mail—therefore people can watch more movies. Secondly, because the advance takes advantage of the exponetnial advances in bandwidth, it means NetFlix will never be “out” of movies which are in high demand. Third, and perhaps most important, because NetFlix will be delivering these movies over a set-top box system, the company will not only be able to keep a detailed record of every movie you have ever watched, you can expect NetFlix to partner with companies such as Nielsen and Invidi to also track customer’s television usage. And this data, in turn, will help NetFlix further refine its recommendation system.
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Jack Uldrich is a writer, futurist, public speaker and host of jumpthecurve.net. He is the author of seven books, including Jump the Curve and The Next Big Thing is Really Small: How Nanotechnology Will Change the Future of Your Business. He is also a frequent speaker on future technology and future trends, nanotechnology, innovation, change management and executive leadership to a variety of businesses, industries and non-profit organizations and trade associations.
