[From Unsplash]
Good morning,
Netflix, which once seemed unstoppable, seems to have hit a speedbreaker. In the first quarter this year, it lost 200,000 subscribers, and it warned investors that it expects to lose more in the second quarter. It took some by surprise. With all the data in its hand, why can’t Netflix do better?
In The Platform Delusion that was published last year, Jonathan A. Knee argues that Netflix’s advantage came from the traditional competitive strengths of media companies – supply side scale – rather than the use of data.
He writes (Netflix founder Reed) “Hastings’s 2020 book with Professor Erin Meyer on the company’s culture and management philosophy, No Rules Rules: Netflix and the Culture of Reinvention, contains a number of anecdotes about programming decisions at the company. What is most notable about these descriptions is just how small a role data appears to play in practice. Take children’s programming. Hastings had long been of the view that such content neither attracted new subscribers nor played much of a role in keeping existing ones. What changed his mind, apparently, was not big data, but an employee meeting in which parents shared the importance of access to trusted advertising-free content in their own subscription decision-making. The resulting decision to develop a global franchise based on a modest Indian animation series, Mighty Little Bheem, was the outcome of broad strategic imperatives, not artificial intelligence. In fact, the ultimate decision maker noted ‘a lack of historical data on preschool shows—even within India.’”
“As of 2020, although most of Netflix’s new content is original production, the vast majority of what is watched remains licensed. For obvious reasons, people only license content that has already proven popular. And between data and research services like Nielsen and Comscore, the popularity of films and television shows is widely known, “along with the demographic profile of their viewers. Netflix may know more about the preferences of its own subscribers and what to recommend to a particular subscriber. But, at least in the US, the Netflix subscriber base looks increasingly like the overall market that it is close to saturating, so it is hard to argue that it has much greater insight on what programs to license.”
What’s true of Netflix is true of Amazon Prime too. Earlier in the chapter, he writes about how Jeff Bezos’s dream of creating a hit factory didn’t exactly pan out as the billionaire hoped. Knee writes: “There is.. little evidence of the existence of an algorithmic hit-factory in any creative domain of substance. Jeff Bezos imagined he could leverage big data and crowd sourcing to dramatically increase the hit rate of original content from 10 percent to 40 percent. He ultimately abandoned his vision of the scientific studio and replaced it, in part, with his own extemporaneous articulation of the twelve elements he thinks all successful shows have in common. Bezos came to resemble an old world studio executive berating employees to ‘Bring me hits!’ His modern version of this ancient refrain: ‘I want my Game of Thrones.’”
Have a good day!
FF Exclusive: Decoding Agnipath
In his latest Strategic Intent column, Indrajit Gupta delves into an important issue that has been pushed under the carpet for too long – a system to facilitate a second career for the veterans of Indian armed forces.
It’s critical for India right now. Consider these numbers that Gupta highlights in the piece.
“Every year, as many as 60,000 defence personnel leave the armed forces. Barely a small fraction find jobs, let alone a proper second career. On their part, India Inc remains mostly unaware of the quality of the talent pool that exists in the armed forces. And has thus far lost out on the opportunity to inject diversity into their workforce with the induction of a cadre of disciplined, well trained ex-servicemen.”
“To top it all, four years from now, imagine the situation when 75 percent of the 46,000 Agniveers exit and are forced to find jobs outside. This crisis will simply worsen since the Agnipath scheme aims to ramp up hiring to 1.25 lakh in four years.”
Some MNCs such as Amazon and Wells Fargo are showing the way forward.
“Building a hiring and onboarding culture for veterans is a major leadership initiative, often under a larger diversity and inclusion agenda in a firm. And it requires serious commitment from the top management.
At the Wells Fargo India office, Parthajit Panda, a senior lateral hire — a Naval commander with 20 years experience — took the initiative to lead and build a veterans program. As sponsor, he took on the role of building a business case, sensitising hiring managers, and building greater organisational awareness. “Hiring managers had to be convinced that there was merit in hiring veterans. And not all such hiring mandates would be successful. I had to explain to them that it was better to focus on the successful crossovers, rather than an odd failure here and there. After all, hiring failures aren’t restricted only to veterans,” says Panda.
After many years, the program has now gained a critical mass.”
Dig Deeper
India’s gig economy
The Gig Economy is a theme that all of us at Founding Fuel have been tracking for a few years now. That it is here to stay and will only grow was finally been acknowledged by the Niti Aayog earlier this week on Monday.
The report contains some interesting numbers, observations and recommendations.
- It is estimated that there were 68 lakh (6.8 million) gig workers in 2019-20, using both principal and subsidiary status, forming 2.4% of the non-farm workforce or 1.3% of the total workers in India.
- It is estimated that in 2020-21, 77 lakh (7.7 million) workers were engaged in the gig economy. They constituted 2.6% of the non- agricultural workforce or 1.5% of the total workforce in India.
- The gig workforce is expected to expand to 2.35 crore (23.5 million) workers by 2029-30. The gig workers are expected to form 6.7% of the non-agricultural workforce or 4.1% of the total livelihood in India by 2029-30.
The report has it that Gig Work is expanding across all sectors and “may accentuate skill polarisation”.
- At present about 47% of the gig work is in medium skilled jobs, about 22% in high skilled, and about 31% in low skilled jobs.
- Trend shows the concentration of workers in medium skills is gradually declining and that of the low skilled and high skilled is increasing.
- It may be expected that while the domination of medium skills would continue till 2030, gig work with other skills will emerge.
How does the government think about this workforce then? What benefits ought to accrue to workers here who are now borderline informal sector workers? There is much to think about and there is compelling food for for thought through the report.
We’d urge you to revisit our archives as well for deep conversations and essays on the theme.
Dig deeper
- India’s booming Gig and Platform Economy (Niti Aayog)
- Masterclass: How leaders can embrace a Gig Mindset culture (Founding Fuel)
- How gig talent can make HR agile (Founding Fuel)
- The Gig Economy (Founding Fuel)
Bare your soul
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Warm regards,
Team Founding Fuel
