We all do it. Journalists love to write about it. Apps like Get Glue and Viggle were created to capitalize on it. NBC and Twitter partnered for it during the Olympics. More recently NBCU and its parent company Comcast not only made an investment in it but also made a commitment to enhance more than 300 shows (which is not really as big a number as it sounds) to support it. You can read all about that here.
Here’s the part I don’t get. When I’m second screen multi-tasking, I’m catching up on email, I’m shopping, I’m reading, I’m playing WWF, I’m checking out new sites and apps, I’m facebooking and tweeting (back to these in a moment)…I am doing two very different things simultaneously (unless I’m watching “Homeland” or something else that demands and/or deserves my undivided attention or else I have to keep rewinding to see what I missed). Sometimes I’m communicating via Facebook and Twitter to discuss what I’m watching – IF what I’m watching is an event I feel like talking about with my friends who share my interest. Like who wore what on the red carpet or was robbed of an Oscar. Or what a bad call the ref made during a Giants game. Or what a kick-ass performance a band gave on the Grammy’s. Event TV. That’s what drives my “talking” and “sharing” on the smaller screen about what’s happening on the bigger screen. But still, my primary focus is what’s on the bigger screen since that’s where the action is.
Event TV is clearly in the death throes and is certainly not the same for everyone – hasn’t been for ages – and I know one person’s Oscar red carpet is another person’s water boarding. I also know this is a generational thing, and the targeted generation is millenials. I’ve seen some research (sloppy though it was – would love to see some solid research if it’s out there) but I’ve also watched teens parked in front of the TV and focus the majority of their attention on texting with their friends. And I’ve also been yelled at if I made the tiniest peep during “Gossip Girl” or some other show that is their equivalent of “Homeland.”
Question, then, is what do increasingly sophisticated second screen apps and websites really accomplish? I applaud experimentation, particularly when it comes to reaching out to digital natives who are multi-taskers, big on sharing, and have generally thrown all that has historically been held sacred about media consumption patterns out the window. But how do the economics work when even the digital dimes generated by online advertising far outweigh today’s mobile pennies, and the cost of creating these apps is significant? And what if your friends aren’t using an app or even watching a show at the same time you are when interacting with them is a huge part of the reason why you’re there? (Can remedy that with a quick text but apparently that’s old school technology.) This feels like sticking Mr. Potato Head’s ear in his mouth and his eye ball where his nose goes – it’s fun for a few minutes but after a while even a five-year old loses interest and runs off to play with her friends. Taking a bunch of tools that already exist – social, gamification, voting, interactive advertising, etc. – putting them all in one tool box, and calling them a brand new way to fix stuff is not a brand new way to fix stuff.
For some additional information, check out the results of a newly released study from Bravo. The focus is largely on how to make second screens profitable for networks and advertisers, but this quote says it all: “We haven’t seen that version of research done around second screening — what is it you [the user] want out of a second screen device.”
One day the story of Netflix and the summer of 2011 will be told in an HBS case study, and the students who are required to study it will respond with a resounding and collective…wtf?
Here’s the very condensed version of how that case study will read:
In July, Netflix announces they are scrapping their “unlimited streaming plus one DVD at a time plan” and instead separating their streaming and DVD plans into two different offerings, thereby increasing by at least 60% the monthly cost for those who want a blended package. Turns out Netflix didn’t anticipate that much as they wanted to exit the DVD business, an awful lot of people still want DVDs – if they’re anything like my parents, the word streaming sounds complicated and scary, and if they’re anything like me, they love the immediacy of streaming but also desire access to the vastly deeper catalog DVDs offer – and the economics of their business were no longer working. (Seems they could have avoided that little bit of unpleasantness with some research, but since HBS case studies don’t editorialize – that’s the student’s job – I digress.) Not surprisingly, the announcement was followed by a very loud customer response, and they were PISSED.
Fast forward to September. The company announces its US subscriber figures, which had grown from 6 million in 2007 (when they introduced streaming) to 24.6 million as of June 30, were going to drop by 600,000 over the 3rd quarter ended September 30 rather than increase by 1 million. Ouch.
Netflix’s stock gets hammered (actually, it has been since the original announcement in July). Then comes the long overdue mea culpa of sorts. Reed Hastings, the company’s CEO, explains on the company’s blog why they did what they did and apologizes for the way it was handled. He also announces that they are going to organize their two separate product offerings into two separate businesses – Qwikster for DVDs by mail, and Netflix for streaming – with separate websites, separate credit card info, separate cataloging of your likes/dislikes and recommendations, etc.
Now for my take. His explanation makes good sense, and I applaud him for taking the step, even if it is two months late. You don’t have to look far – AOL, Yahoo!, MySpace – to see how quickly a once high flier can become irrelevant. But if you’re going to apologize, apologize. That half-assed, “I’m-sorry-if-what-I-did-hurt-you” bullshit is no apology at all. And two separate companies with two separate ways for customers to engage? You just pissed off your subscribers and tried to make nice – now you’re going to make it harder for them do business with you? As for the name – Qwikster – it sounds an awful lot like Quixstar, which is the name Amway used for a short time before they recently went back to using Amway (full disclosure: Quixstar/Amway is a former client of mine). Any idea how many millions of customers and employees Quixstar/Amway have? And finally, to add insult to injury, nobody, it seems, bothered to check as to whether the Twitter handle @Qwikster was available before making today’s announcement. Turns out (a) it is already in use by someone whose tweets make liberal use of very colorful language, and (b) misspelled versions, like @quixster, were available, but once the announcement was made, people jumped on ’em.
For a company that has done so many things so right for so long, they were bound to make a misstep – everyone does at some point. But this was botched in a big way. People don’t like their cherished brands that they have loyally supported to turn on them, and that’s what this price increase/two separate offerings has felt like from the beginning. And with Wal-Mart-backed Vudu gaining steam (and having a much better streaming library IMO), there is a strong competitor in the wings. I hardly think the mistakes are fatal; the recovery process will nonetheless be interesting to watch.