The Future of Netflix with VP Steve Swasey

Recently, I had a chance to speak with Steve Swasey, the Vice-President of Corporate Communications for Netflix.  Netflix is the well known rent-by-mail service that now also incorporates instant streaming on an ever expanding library of movies.  With unprecedented growth in the past year, Netflix has been astounding investors, as well as wowing customers with both an excellent product, as well as top notch customer service.

MINUS: Let me start by saying that I have been a subscriber to Netflix on and off since the very beginning.  Working at a video store for a long stint is the only thing that ever drove me away from Netflix. How long have you been with Netflix?
STEVE: I have been with Netflix for 4 years.  I found the position posted on the internet, and was fortunate enough to get the job.
MINUS: Are you working in the area that you initially started with Netflix in?
STEVE: I am working in the same area, but was promoted about 2 years ago.  I was initially hired on as a director, and was promoted to VP.
MINUS: Has digital distribution been a goal from the beginning of Netflix, or a technology that was later observed as needed by the company?
STEVE: From the very beginning, it isn’t a coincidence that the company is named Netflix, not DVDs by mail or something like that.  Netflix didn’t initially know exactly how it would be implemented, but it was the intention from the start to offer digitally streamed media.
MINUS: There are so many new devices like Xbox 360s, Mac, TiVo, etc. What made now the right time to incorporate all of these new media hubs?
STEVE: The technology has existed for some time, but now that consumers are embracing the technology, and the studios are embracing this same technology on a wider scale, it is at this time that streaming content could become a widely adopted reality.
MINUS: While the play quality has been superb, it is a bit of a hassle to have to use my computer to add movies to my Watch Instantly queue.  I’m sure all Xbox 360 users would love a more powerful interface.  Any plans on a more usable interface for the Xbox 360?
STEVE: Currently, there are no announced plans to change this.  The interface is currently designed for use on the PC and Mac.  You use the browser to search and select and the device that connects to your TV to display and play ¢â‚¬â€œ what they’re both best at.
MINUS: Another option I am curious about, are there plans to implement methods of sorting movies in the “Watch Instantly” queue?
STEVE: We’re always looking at ways to improve the functionality but nothing that has been announced at this time.
MINUS: Approximately how many new movies, as well as “older” titles are being added to the “Watch Instantly” section weekly?
STEVE: While there are currently more than 12,000 titles available for streaming, the weekly additions vary.  The rate at which movies are added is a product of cost and availability.  Netflix strives to give its customers the most movies possible, but not all titles are available for streaming due to the expense or licensing issues.
MINUS: Are all of the major studios allowing their titles to be streamed?  Even to the Xbox 360?
STEVE: Availability is negotiated on a title by title basis, and we have terrific relationships with the studios to keep adding content.
MINUS: I thought it important to make it known that Netflix also accommodates smaller and even independent studios to use Netflix as a distribution method. Can you elaborate on this?
STEVE: There are a number of independent titles “3 days in Paris” and “4 Months, 3 Weeks, and 2 Days to name a few, as well as many documentaries, etc.  Currently, Netflix won’t pursue exclusives as we believe the consumer should have maximum choice.  And, filmmakers tend to want as large a distribution as possible for their movies.  Exclusives don’t help the movie reach a wider audience.
MINUS: Any major new directions Netflix is going in?
STEVE: Netflix is a very transparent company that keeps good relations with many media outlets to keep the blogosphere aware of our current projects.
MINUS: Are there any major directions Netflix ever considered going in, but decided against?
STEVE: Last year, Netflix experimented with Red Envelope Entertainment, which was essentially a movie studio for independent filmmakers, but this was contrary to the core business model and took away from the focus of DVD rentals and streaming.  We want to keep our customers happy by focusing on their experience, not expansion in other realms.
MINUS: While Netflix offers Blu-ray at a premium membership price, HD streaming is more than just a reality now.  Netflix has many titles that are streamed in HD. Do you foresee Blu-ray discs being dropped anytime soon?
STEVE: Over 700,000 members are Blu-ray preferred members, and that number is growing.  While we do have many titles already streaming in HD, they stream in stereo, not full Surround Sound.  While this hasn’t been a problem for anyone, this causes delay on initial adopters who are video/audiophiles.  We didn’t have any HD titles last year, so progress has been impressive.  Streaming to TV wasn’t introduced until May.  Now, a plethora of devices are included.  Early adopters have been patient as this exciting progress has been made.
MINUS: Has Netflix ever considered an online streaming game service similar to Valve’s Steam?  What about game rental by mail service like Gamefly?
STEVE: No, we are not a game company; Netflix will stay true to movies.  Netflix is a video company.  We want to have the best movie service.
MINUS: Are users often confusing problems with their ISP with Netflix problems?
STEVE: Many of the consumers who are streaming at this time are tech savvy, and are able to discern where the problems lie.  As the user base continues to expand, there will be more users who are unaware where problems can be encountered.  There is no sense in pointing fingers, Netflix just aims to fix problems and continue to improve the viewing experience.  We stand by our products, and don’t plan on dragging other companies’ products and services down.  When shipping failures have occurred, due to problems outside of Netflix, we offered credits to our customers without pointing fingers and without waiting for complaints from our customers.  We just fixed the problem proactively.
MINUS: Do you have anything you would like to add?
STEVE: Netflix was named the #1 video rental service by Consumer Reports of all services, not just online services.  This seems to be a well deserved recognition, as ForeSee Results analyses web traffic, and since 2005 (4 straight years), ForeSee Results has rated Netflix number one in customer satisfaction.

Overall, Steve has just confirmed what I think most of us already knew: Netflix is determined to be the best, and stand behind both their work and their products.  Thanks to Steve Swasey for taking the time to speak with me, and if you haven’t already, check out Netflix today via their free trial.

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