Memo

To:                  Julie Morris

From:             Logan Kriete

Date:               16 March 2013

Subject:          “Hooked Up” and Implications for Netflix’s Future

The central conceit of Myers’ Hooked Up is one that we need to take very seriously when moving forward: the current generation of “Internet Pioneers” cannot be ignored. Their values, motivations, beliefs, fears, and desires are instrumental to our success, especially when we consider the fact that the largest age group of our subscribers falls into their category, with no kids, majority female, and most at least a bachelor’s degree if not master’s. You may find it odd than I’m singling out those particular demographic characteristics, but don’t take it from me: these are qualities Myers hones in on when describing the specifics associated with Internet Pioneers. As strategists, we have already recognized the value of creating our own original content; now, we need to realize the importance of engaging this group of consumers.

First, some background is in order: Myers’ book details everything from this generation’s religious beliefs to sexual preferences, and how and why they come to behave the way they do. Thus, acknowledging trends relevant to them serves an important role in focusing the analysis of their thought processes. To this end, I will address two of the most readily salient topics through the lens of information access: second screen engagement and entertainment consumption, including music purchases. However, please keep in mind that listing them separately does not imply discrete phenomena; instead, they interrelate with the others as each has implications that affect the rest. Other results brought up by Myers are also equally valid, such as their specific aggregate political beliefs, but I chose to focus on what we can act upon right now.

This group that spends the bulk of its time in front of a computer, iPad, iPhone, or other device that provides constant Internet access is not producing a generation of asocial creatures. It is instead creating a crowd of those who desire—and can obtain—instant gratification. While it may seem unfamiliar to those born before the late 1980s, their means of relating are simply more immediate than those to which older folks may have become accustomed. Myer acknowledges that Internet Pioneers had it pretty tough as kids, growing up with turmoil ranging from 9/11 to the financial crisis, and being born into this world of chaos forces them to seek out information as fast as possible. They multitask to such a degree that they can record 36 hours of activity in a 24-hour period, and they are insatiably skeptical about big business, the government, and authority.

What does this have to do with Netflix’s original series? The answer lies mainly with the facts contained within our stories. To effectively reach Internet Pioneers, we need to go beyond writing scripts that align with their values; it goes, at this point, practically without saying that our shows need to be tailored to express agreement with what they believe[1]. What we need to focus on is including a diverse array of factually correct and relevant contextual information within the stories of our shows: second screen engagement is already proliferating through most networks. Myers does not address the trend, but it is easy to connect the dots and see that Internet Pioneers can and will constantly judge entertainment (especially our on-demand content) based on how well it can serve their desires for information. If we stream an episode that hinges on a blatantly wrong fact (particularly if it deals with a closely-held value), eagle-eyed viewers of this generation will notice and subsequently complain. Their complaints are not just heard around the watercooler, either; they are instantly shared and distributed around the world within minutes if not sooner. Myers notes how this generation relies more heavily on aggregated user reviews instead of critics; audiences will take these to heart and brand loyalty can be destroyed in an instant (or at the very least wavered, and any hesitation is a step closer to losing their vastly ephemeral attention). In his study on the chapter on their psyche, Myers shows how they are quick to appreciate brands that don’t talk down to them, so why should we try to pull the wool over their eyes? Instead, we should be honest upfront, providing them tools through which they can engage with our content.

Why not build a system by which, when they are watching episodes on their computer, for example, they can use their tablet to identify information within the show—clothing brands, historical background, music tracks—as it happens? Some smart people are already working on apps like this for the big four; we absolutely should be doing the same. They want to share, they want to make the world a better place, they want to inform, and offering them the opportunity to do so through our branded platform can further solidify our relationship.

Their consumption habits exist further than just instant information acquisition, though: faced with a plethora of delivery options, Internet Pioneers look to the most convenient—which sometimes includes illegal—methods of obtaining content. With music as an example, take the myriad of sites like YouTube, Rhapsody, Pandora, and Spotify that appear to have democratized the music industry. No longer are the record companies in charge of packaging albums that must be sold to consumers; instead, single-track purchases and streaming have become the norm. Internet Pioneers grew up with this mindset, where they can either stream (for free and subsidized by ads) whatever they want, whenever they want, or purchase entertainment a la carte without any strings attached. They feel entitled to the media instantly—and they are.

How does Netflix cooperate with this mentality? To an extent, we already are. Our streaming speeds are the fastest in the business, with most of our programs playing on any Internet connection within ten seconds of the player loading, and we already account for over 30% of all North American Internet traffic. We are giving this generation what they want (our distributable media) when they want it (as soon as they click play). But we can expand this further: let’s take that second screen app idea previously discussed and now partner with these song providers to give audiences a newer, slicker, and faster way to obtain their music. Myers already mentions how “a whopping 90% [of Internet Pioneers] shop online”: let’s see what we can do.

For example, Connie Sumer is watching our original Lilyhammer and suddenly realizes she really enjoys the opening title theme song. Does she have to scour the Internet for obscure fans posting creative details on arcane forums? She will—she is an Internet Pioneer, after all, and her web research skills are second to none—but she doesn’t have to. We can allow her to see the name of the track and artist who performed it right alongside the show, when she desires; we can link her directly to Amazon’s MP3 store, where she buys the song online as a single-item purchase for 99¢ and we get a kickback for the referral. Now, everyone is happy: Amazon earns a customer, Connie gets her song, and we get both extra profits and increased engagement with our target.

These are base examples, but they illustrate the power of both recognizing and adapting to the Internet Pioneers generation. As they age, they will not only become more important consumers, but also our fellow businesspeople, partners, employees, and community members. Their influence will set examples for generations to come, and future groups of Internet-enabled demographics will be defined by the changes this generation has brought. What Myers outlines in this book is vital to our continued success because it gives us two very important tools for reaching our consumer: a guidebook to their current attitudes and a looking glass into their future beliefs.