I think Rick is looking at the Netflix buyout issue from entirely the wrong angle. Netflix should spend some of its hard-earned cash on Flixster and ensure itself a spot in the hall of fame for digital-movie delivery experts.
While Netflix has made a mint in the DVD era, it should be blindingly obvious by now that the DVD format will be obsolete in five years and forgotten in 10. Like the VHS cassette, the DVD had a good run. But the replacement for DVD discs will not be the Blu-ray disc, nor any other physical format. Instead, movie content will move online and become a virtual asset.
When that happens, there will be an all-out war between service providers like Netflix and Amazon, hardware-based subscription wranglers like TiVo
The winner of these battles will be whoever does the best job of presenting media content to your average couch potato. Netflix already has a big leg up on the competition with its unmatched movie-recommendations feature. A worldwide army of developers with serious monetary incentives took three years to improve the quality of recommendations by a measly 10%. We're talking top-notch functionality here, Holmes.
What Flixster would add to Netflix is a serious social angle. The service boasts 15 million unique users and more than 2 billion movie ratings, and it is one of the most popular Facebook applications. Flixster's database of 2 billion movie ratings will nearly double the ratings data available to Netflix, and moreover, Flixster is now the proud owner of former News Corp
Every little bit of data helps, and short of Amazon's Internet Movie Database service, I say that nobody would know movie tastes like Netflix plus Flixster would. And that's the silver bullet Netflix needs to win again in the digital era.
How much should Netflix spend on Flixster, if the service were for sale? Discuss in the comments below.
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