What should be short and near term goals for Netflix.

This is my answer given to the interviewer during the Facebook execution interview. I was asked to pick up a streaming platform of my choice, I picked up NBC Peacock, the interviewer didnt know about this platform hence I offered facebook watch or Netflix as an alternative. The interviewer picked up Netflix and provided the qn(short term and long term goals).

Step 1: Understanding the qn:

1) Do the goals have to address any specific platform, geo, region, device etc.

2) Is there a specific competitor that I need to keep in mind?

3) Any specific company objective

Step 2: Explain the product and provide company background

1) Netflix is the market leader in streaming services with 200 Mn+ customers, the closest competitor is Amazon prime with 145 Mn+ users

2) Netflix does face challenges w.r.t. pricing especially in emerging countries, saturation of customer in a given segment and need for propreitory content

3) Beyond traditional competitors, it is also facing competition from user generated content platform such as facebook watch and tiktok.

Step 3: What would be their priorities? 

1) Customer Acquisition- Beyond  their regular user group

2) Engagement and consumption of video

3) Increased monetization (especially in emerging countries)

4) Address competition in the user generated content area

Step 4: What is the solution for these priorities?

1) Customer acquisition- Looking beyond entertainment into education. Education market is projected to be $230bn in the next 2 years. Leveraging Netflix platform for education. This will also allow them to advertise the product in schools and educational institutions

2) Engagement- 

(a)Improvement in the recommendation engine to transition from static to dynamic recommendation. Static recommendations are created based on past videos watched and dynamic recommendations are based on the current session.

(b) A summary, recap feature that would allow users to recap a video from the last view so that they return to the same video thereby improving retention.

3) Monetization

(a)- Metering of pricing over a fixed fee every month especially for emerging markets

4) User generated content

Create a light weight version of Netflix with a different brand name for users to upload and monetize user generated videos

Step 5- Prioritization of solutions and thereby goals

a) Near term goals- Leveraging existing platform for education requires very minimal changes to the platform and will lead to an immediate increase in customer acquistion and awareness(through advertisement. High Impact and Low cost

b) Medium term goals- Recommendations engine, recap features and metering

Medium implementation cost and medium impact

c) Long term goals- Light weight platform for user generated content- High Impact and High cost.

Qns asked to me after this explanation

Qn 1) How will you convince your boss to create a platform and move into user generated content

My answer was

a) Changing demographics- My current user base say millenials will constitute less of the over populace over the coming years thereby will shrink. My larger user base (Gen Z) will be interested in user generated content

b) Competition- Indirect competitors like Facebook watch and tiktok will provide an alternative product to my packaged streaming services platforms

c) ROI- Propreitory content is extremely expensive to produce whereas user generated content needs no investment from the platform side. Thus ROI is far higher for user generated content

d) Comparison of daily active users for Netflix and say tiktok which makes tiktok far more profitable in a AVOD model vs SVOD model used by Netflix

Qn 2) What metrics will you to measure success of Netflix engagement

a) Primary metric- Number of user watching videos, DAU etc

b) Secondary metric- Quality of engagement viz. time for which the video was watched, did the user close the current video and move to a new video, quality of recommendations (measured in term of user selecting a video within the first 5 recommendations)

Qn 3) The recap feature that you mentioned,  how will you measure its success

Direct Metric- Number of returning users to a video, increase in  duration of video watch 

Trade off- Counter Metric- Do the user start watching the video only the mid of the playback using Recap to get a recap of the story so far? In this case, the feature is becoming counterproductive and needs to be toned down.

Qn 4) When would Netflix launch new series or videos in the market?

This will be based on watch fatigue. Every video series is always designed keeping a user segment in mind. I would what % of my user segment have watched the series for the first time and subsequent rewatches. This will help me understand the user fatigue of my video and help me launch subsequent series coinciding with an event e.g. long weekend, christmas, thanksgiving etc.