Netflix Wants to Be Accused of Profiling

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Netflix (NASDAQ: NFLX  ) senses your frustration.

It knows that your recommendations are getting weaker as your kid streams Phineas and Ferb and your spouse checks out Top of the Lake. The leading video service is doing something about it.

Netflix is at E3 this week, demoing the ability for different user profiles within the same account. Video fans will simply pick out their avatar when they start up the app -- the same way that they single out who they are on video game consoles with multiple profiles -- and they will be whisked away to their personal preferences and recommendations.

It's the right thing to do. It won't make the login process any more cumbersome, as many Netflix applications now allow you to choose between the regular interface and the "Netflix for Kids" option. Selecting an avatar would probably eliminate the need for that option.

Netflix also doesn't risk losing out on extra accounts that could have materialized in homes with multiple heavy users of the platform.

The service is limited to two simultaneous streams at the same time, so it's not as if it's risking an entire frat house sharing a single user's subscription. If anything, rolling this out should increase the number of people upgrading to the new $11.99-a-month plan that allows for four streams at the same time. As the service gets more personal and useful for each user, won't they stream Netflix more often? Even if two simultaneous streams will be more than enough most of the time, won't many subscribers just upgrade to four streams so they're not stuck in a situation where two other family members or roommates are also online?

Netflix knows that it can never settle. It can't be complacent. It may be on top of the world with more than 36 million global streaming accounts these days, but the competition isn't asleep at the wheel. (NASDAQ: AMZN  ) -- its closest rival -- is finally starting to grab content that isn't available on Netflix. Cable and satellite television providers are also trying to keep users from bolting by adding streaming options.

They're not even close, for now. Amazon would be laughed out of the room if it began offering Prime Instant customers different profiles. The service isn't anywhere near as popular as Netflix, which commands the lion's share of video-streaming consumption during primetime viewing hours.

However, Netflix can't afford to stop being customer friendly. It's too easy to cancel a streaming service, and that's the main reason why the company now longer provides its monthly churn metric. Leaving is physically easier now than it was when Netflix was primarily a disc-based rental service. Netflix will make sure that it gives members every possible reason to stick around.

TV time
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