June 29, 2006

Netflix Takes Libraries to School, Part III: Why Compete With Netflix?

Why Compete With Netflix?

Thanks to David King who has added his own thoughts to the Netflix and Libraries discussion. Some interesting comments popped up, including this one from Steve Lawson:
“But, Michael, I also said that I doubted you could effectively and cheaply mail items other than DVDs, such as hardcover books. I could be wrong about that, but that is where my “why compete with Netflix” comment is coming from.”

Good point. Two ideas: First, this is a challenge that it seems could only be dealt with using large scale group bargaining. Now there’s a novel idea (pun sadly intended)! Second, it is fascinating to note that FEDEX got dropped from this years Wired Top 40 Companies because “In less than a decade, overnight delivery has gone from specialty service to standard offering.” Wired sees this, but do libraries?

While it wasn’t Steve’s point, it seems worthwhile to look more at the simpler question of “Why compete with Netflix?” With the thought that ultimately this really is about content access, Netflix is as good a place to start as any. So, why compete with Netflix? How about this: “Compete with Netflix as part of a multifaceted approach to securing and growing the role of libraries in the shifting community of information consumers.” Grandly put, compete with Netflix so that we can continue to offer our services to users in the next 10-30 years.

Here are some more compelling reasons to consider:

For starters, those libraries that circulate “entertainment” DVDs (movies, music and TV titles mostly) have lost circulation and market share. Netflix didn’t just decrease business at video stores, but they decreased business at the libraries circulating this exact same material. And we all know how loss of circulation equates to lack of funding. Should we not want to figure out how Netflix managed this and then respond deftly?

It’s the point that comes up so often, particularly in “library geek” circles: if libraries sit by comfortably and say “we don’t need to change in response to these successful market cornering models” we may just very likely sit ourselves right out of our community altogether. It just seems prudent to more carefully watch and then nimbly respond to the “Netflixish” models out there.

Again, Netflix is DVD’s for now, but that will shift into a variety of content types all too soon. And “content” can be anything. From the fresh off the press Wired Top 40 we see Netflix is at #14 this year. Note the last sentence ::
“14. NETFLIX
2005 Rank: 15
The top online DVD rental house got that way using the US Postal Service, not a bandwidth-challenged Net. But thanks to BitTorrent, iTunes, and Hollywood’s growing cooperation, movie downloads are finally becoming viable. CEO Reed Hastings promises a digital strategy by year-end.”

Here are some examples of the sort of things could all eventually be integrated fully into Netflix service offerings:

These fine folks expanded, yet did a great job of cutting libraries out of a nice little chunk of the audiobook consumption. I just heard somebody say “Stick that in your Netflix and chew on it for a while!”.

And how about these folks, (aka MovieBeam) who will already “beam” a library of the latest Hollywood release into you home for you to rent (just in case you don’t have access to or want on-demand digital cable).

GameFly is Netflix for video games and Game Tap lets you play classic game content from them, directly on you PC. The content game is on (another painful intended pun).

Once the software and infrastructure mature a bit more Netflix will surely be in there slugging it out. Look at TiVo! They are already sticking their head into the content fray via a partnership with Yahoo!. Here’s proof (from very own TiVo):
Yahoo! Invaded my TiVo

So where will libraries be in this world? Hopefully on top of the game and not beating their proverbial breasts and and wailing "Why, oh why didn't we compete with Netflix?!"




Another upcoming (likely the next) post will look at the community building features Netflix offers. The Netflix/Library numbers post is in the works too.

Finally, as if you hadn't had enough, here is an especially very interesting and revealing article from Stanford Magazine about Netflix and its founder, Reed Hastings. Seems like a decent guy, Mr. Hastings does.

Posted by libraryman at June 29, 2006 07:01 PM
Comments

I'm still skeptical, Libraryman, but I'm still interested to see where you take this. I think any "competitive" strategy for libraries will have to capitalize on libraries' unique strengths (i.e., to me it seems impossible for libraries to do delivery-by-mail of DVDs faster, cheaper, or with a better selection than Netflix, so the emphasis would have to be elsewhere).

It is also entirely unclear to me that Netflix is currently eating libraries' lunch; I'm a Netflix customer and I still sometimes check out DVDs from the library. It also seems like DVDs at my local library are in constant circulation.

As I mentioned before, I'm neither a librarian in a public library nor a businessman, so I could be quite wrong about this. If any library gets this going in a sustainable fashion in the near future, I'll be happy to publicly admit I was wrong.

Posted by: Steve Lawson at June 29, 2006 08:16 PM

Hello,

this is a nice link:
http://www.dlrinc.com/NewsPage.asp?Article=20060321

The public library of Denver rocks!

Edwin
*************************
Thanks for the comment and the link, Edwin. They made big splashes with this a few months back, no doubt http://www.overdrive.com/MediaConsole/download.asp Interestingly, *shhh* expect OCLC to jump into this fray once things suss out a bit more. SHouldn't be too long. Good, fun stuff to think about though, eh?

Posted by: Edwin at June 30, 2006 12:27 AM