You may not know Reed Hastings by name, but chances are you’ve used his product.
Netflix. It totally revolutionized video rental, essentially putting Blockbuster out of business.
In a recent newspaper blog, Hastings outlined six important lessons for how to manage the digital revolution. But his advice has little to do with the fourth estate, and is universal.
See what you think.
1. Spend your time on tomorrow – not today. While you may think that Netflix is totally focused on DVDs by mail, Hastings points out that “We’re entirely focused on streaming…Expend as few resources on the current operating model as possible.” Whether you call your station “radio” or not (and as we know, stations like WTOP and WAY as well as NPR are moving away from the R word), the key is to aspire to where you want to be and what you want your brand to become – not what it is today.
2. Savor the economics of digital distribution. As Hastings notes, “It cost about a dollar, round-trip, to send DVDs by mail. It cost us less than a nickel to delivery by streaming.” In the world of digital, costs shrink as delivery of content speeds up. Digital allows broadcasters to more effectively and efficiently serve its two constituencies – listeners and advertisers.
3. Don’t sweat the timeline. As Hastings points out, “In 1997, we said that 50% of the business would be from streaming by 2002. It was zero. In 2002, we said that 50% of the business would be from streaming by 2007. It was zero…Now streaming has exploded…We were waiting all these years. Then, we were in the right place at the right time.” It is about preparation and patience – and having a vision about where the world of media is headed. Technology adoption is unpredictable, but research and planning can provide the necessary confidence in a strategy – whether it pays off this year or in 2015.
4. Play chess – not monopoly. Hastings contends that it is important to “separate real threats from others.” Often, companies get so hung up on domination of their old space (like Blockbuster did with building more and more brick and mortar stores while ignoring the DVD by mail threat). That may be the way we look back on radio consolidation. While companies were buying hundreds of stations, what was happening outside radio? So, looking down the road, what are the threats to radio? Is it pure-play Internet channels like Pandora? Is it Internet in cars? Is it the advertising revolution that is changing the way that clients and buyers view the media world? Pick and choose your battles.
5. The presentation revolution is still to come. While radios haven’t changed much over the years, other technologies and gadgets have. And they impact the way that content is presented. How a morning show is enhanced with the addition of video, podcasts, webcams, and social media interfaces is a key to adjusting to changing technology. Simply doing the same show in the same way is tantamount to newspapers continuing to just crank out a print edition, while ignoring everything else. What kind of presentation of content makes the best use of the new tools, and how can talent and sales be better prepared to make the adjustments?
6. Culture counts. Hastings talks about making Netflix “a great place to work.” If radio companies are to flourish moving forward, its corporate executives might be wise to turn their focus on creating a culture where employees are appreciated and their value is rewarded. Hastings says, “If there is a God we worship, it is the god of excellence.”
So for Hastings, it boils down to more than just content – it’s what you do with it.
Netflix is more than just about sending DVDs by mail. It’s their recommendation engine, no late fees, a highly functional and simple website, and the integration of social sharing of films with other consumers.
Good advice for that next planning meeting from Reed Hastings.
Jacobs Media has consistently walked the walk in the digital space, providing insights and guidance through its well-read national Techsurveys.
In 2008, jacapps was launched - a mobile apps company that has designed and built more than 1,300 apps for both the Apple and Android platforms. In 2013, the DASH Conference was created - a mashup of radio and automotive, designed to foster better understanding of the "connected car" and its impact.
Along with providing the creative and intellectual direction for the company, Fred consults many of Jacobs Media's commercial and public radio clients, in addition to media brands looking to thrive in the rapidly changing tech environment.
Fred was inducted into the Radio Hall of Fame in 2018.
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