Category Archives: Strategy

Business and life strategies from a disclaimer tag

I bought this new rug for our family room and I love it. It came with this disclaimer slip which reminded me of a crucial strategy in business and life:

This company wants to combat returns and replacements — it’s expensive to return rugs, they’re awkward to ship. So they’ve taken the flaws in the rug, the “irregularities and variety of shades,” and reframed them as advantages: “unique beauty” and “natural.”

The lesson is simple: Figure out how to make any weakness, flaw, blind spot or disadvantage into an asset and nothing can stop you.

Why Netflix Needs a Mobile Content Strategy

Netflix is killin it and I continue to be bullish on their future. There’s one corner of the business I’m afraid they’re being just a little too pensive about: mobile.

This year, they’ve launched some of their first short-form programming and some new native portrait features in their mobile apps. But I’m afraid this won’t stop other mobile competitors — Google and Facebook — from locking them out of this critical piece of the entertainment pie. Now is the time for them to begin spending in the mobile content space and here’s how they should begin.

Why mobile is critical to Netflix

Let’s start with why Netflix should care.

There’s an obvious massive market of short form video consumption, well-proven by YouTube and Facebook. 34% of global internet video traffic is shortform. So, when Netflix says they’re competing with all forms of entertainment, this seems like an obvious adjacent area to pick up some additional engagement — whereas interactive, live and sports are much more of a moonshot.

But I think all of that frames this as a business expansion opportunity when I actually think this is a threat to Netflix’s stranglehold on the streaming market. Have a look at this graph, which explains the userflow of new subscribers to the service.

When this slide first broke, a lot of emphasis was put on the fact that after 6 months, 70% of Netflix subscribers were watching on a big TV. What stands out to me is that 10% are STILL watching on a mobile phone. Just 1 month in, more than 15% are still struggling to watch long form TV shows and movies on a tiny mobile screen. And right from the getgo, a full THIRD of Netflix’s new users start on a mobile device.

We are in a mobile world and who cares that people watch more content on their mobile phones — people TRANSACT more on their mobile phones. Enough people subscribe to Netflix straight through iOS that they’re trying to bypass Apple altogether — another sign of just how many folks sign up on mobile. Given that Netflix’s model is dependent on one giant transaction at the top of the funnel (their subscription), many more of their new customers are entering their ecosystem through mobile phones. And this user flows shows just how long it takes that mobile customer to begin finding big-screen-TV-type-value in their subscription. Were Netflix to actually provide valuable mobile content during that couple-month transition, they’d reduce churn among new users. (Still another strategy would be a freemium model of mobile-only content to lure users through the paywall when they realize the app’s value on another screen.)

What Netflix is already trying in mobile

Netflix is not completely blind to this. They’ve launched a few new short-form originals and mobile products this year. For those trying to reverse-engineer their mobile content strategy, here’s a recap of their short form content:

  • The Comedy Lineup (15 minutes) – Mini stand-up comedy specials
  • Explained (14-18 minutes) – Newsmagazine (Vox)
  • Follow This (16-18 minutes) – Newsmagazine (Buzzfeed)
  • Comedians in Cars Getting Coffee (12-25 minute) – Celebrity interviews with Jerry Seinfeld
  • Marching Orders (12 minutes) – Docuseries
  • Cooking on High (14 minutes) – Competition reality

In the scheme of Netflix’s $6 billion content spend, I’d call this an extremely modest beginning — it’s really just a test. It’s heavy on news and unscripted, there are no filmmakers, high-value talents or standout IPs. I estimate their 2018 spend on short form around $20MM at most. To make a meaningful move into mobile, they’ll need to spend 5-10x that.

How Netflix could form a mobile content strategy

It’s clear that Netflix needs to get into the mobile content game ASAP. But how? So many short form content platforms from go90 to Watchable have flamed out because of a lack of distribution.

Broadly, I’d approach this similarly to the rest of Netflix’s business:

  1. START FAST with a mountain of inexpensive mobile content that’s easy and fast to launch.
  2. PIVOT TO PREMIUM – Use the analytics gathered from starting fast to inform a mobile Originals strategy and finance exclusive new series.

Why this two-part strategy always works is the subject of a whole other blog post. But Netflix is in a unique position to build a war chest of start-fast mobile content at a low cost-per minute without sacrificing their premium values. Step one of fast/easy/quick mobile content — pretty obvious — is licensing. Now is a fantastic time to cheaply license premium mobile content. Every mobile content studio is clamoring to work with Netflix which earns them outrageous leverage. Plus, many of them were gifted back go90 or other mobile series that they have no place to distribute. The second source of start-fast content is probably less obvious: the content they already have. Netflix outright owns a lot of their shows and by getting creative, they’ll find a new life if they’re re-cut for a shorter runtime or carefully cropped for a vertical screen.

When audiences coalesce around their start-fast mobile content, they can decide where it makes sense to pivot to premium, maintain licenses or trim back.

In sum, I think mobile is a crucial growth area for Netflix and a place they have some natural competitive advantages. They could quickly turn a source of churn into a new source of revenue and expansion. I predict they’ll make some dedicated moves in this space but it’s going to take a larger commitment to realize the potential mobile content has in Netflix’s future.

Free, Editable Google Slides Conversion Funnel for Sales, Marketing and Social Media Presentations

UPDATE 2/16/2024: Thank you to everyone who’s come to use this template! You’re in good company. Over the past several years, executives have used this slide who work at Capital One, PwC (PricewaterhouseCoopers), Verizon Wireless, National Research Group, Equifax, Mathison and Flipkart — and those are just the ones who reached out to me! If you’re finding it helpful, please let me know or buy me a coffee (and expense it to your company!)

I love to use conversion funnels to help structure and organize my consulting presentations. I find that funnels can help describe everything from marketing plans and social content strategies to casting actors and hiring talent.

I almost always keep my presentations simple by doing them in Google Slides and I’ve built a really basic funnel template that I use over and over again in the program. I thought it would be worth sharing because the first time I needed one of these, it was in a time crunch and I couldn’t find a simple enough template. Here it is for you to swipe and use in your own presentations! You can customize the colors and text to your subject.

Google Slides conversion funnel template

CLICK HERE TO CHECK IT OUT

Here are the instructions which are also included in the link:

  1. Go to File > Make a Copy… because this funnel is in view-only mode
  2. Edit the text in each layer of the funnel — you can add types of content, audience estimates or percentages
  3. I like to color-code presentations to help people follow my slides — you can do this by starting with a full funnel as your “table of contents” slide then using the colors from each section of the funnel when you explain each layer in more depth; you can also switch the funnel colors to grey if you want to de-emphasize them during your presentations (see next slide)

An Outrageously Common YouTube Watch Time Misconception – The Real Definition

Watch Time is the most important metric that YouTube uses to promote and drive audience to a video. In a way, it’s the most important metric on any platform. Netflix uses very similar information to decide on the shows it renews, greenlights and licenses. Snapchat, Amazon and Facebook have been known to use a similar engagement metric too. But there’s one secret side of watch time that most creators completely miss.

The “basic” definition of Watch Time is how long people spend watching your video. Cool. It’s not how many people watch your video… it’s how long all of those people watch it for. And this is fine, colloquial way of looking at Watch Time. It’s a proxy for how engaged your audience is with your content. And that’s about all the information YouTube provides you with in the Watch Time section of your Analytics.

But it’s missing one, extremely important distinction. One critical precept of the definition. So many people miss this and it’s fundamental. Watch Time is not about how long people spend watching your video. It’s about how long people spend watching other videos, after they’ve watched yours. That’s right. Your video’s engagement only matters to the extent that it gets people in the mood to watch more content.

Don’t believe me? Read more about when YouTube announced this! It’s also defined in the YouTube Playbook like so:

YouTube optimizes search and discovery for videos that increase watch time on the site.

How could YouTube judge me based on something the users do after they watch my video? It would seem like you have no way of controlling what people do after watching your content. But that’s not true! Think about this from a psychological perspective. Your job is to engage viewers. If you’re successful at that, you should be able to increase watch time on the entire site of YouTube.

How? Firstly, you can just make “binge-worthy” content that hypnotizes people into watching subsequent videos in your series. Make sure you’ve got never-ending “rising conflict” to keep people hooked and subscribed. Or you can make videos that are incredibly effective at framing or promoting other videos that aren’t yours. In that way, you can actually boost watch time by simply being an outrageous curator.

You can also avoid things that are apt to get people out of the content-consuming mood.

  • For instance, don’t drive people off YouTube… it’s unlikely that they’ll come back. Don’t tell people to search, donate to your Patreon or go to your own .com.
  • And don’t make extremely short videos because it just opens more opportunities for people to get distracted. Short-attention-span content begets short attention spans — flakey users who will leave YouTube.com.
  • Another common misstep: pushing commenting and “liking” and sharing at the end of a video. In my experience, those actions are very low weight to the YT algorithm compared to watching more content. Asking people to be contribute in the comments or respond to a prompt will kick them out of consumption mode and into productivity mode.

Of course, there are reasons to break all of these rules in the name of your business model or goals… but you have to be aware of how they’re impacting watch time.

Reframe how you think about engagement and it might inspire you to address watch time in completely new ways. Remember this common misconception and you’ll have a secret edge compared to Creators who have no clue.