Netflix’s Biggest Competition

Reed Hastings, CEO of Netflix, is like any other business leader in that he is constantly challenged with the question of competition: Who is the competition, and what do you plan to do about them? He was asked this question a week ago during the regularly-scheduled Q1 earnings call, and his answer is both fascinating and a little alarming.

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One investor asked about Amazon in particular: How will Netflix stay ahead of Amazon and their growing library of Prime videos? Hastings praised Amazon and its founder Jeff Bezos, but then went in an unexpected direction. It turns out that Netflix doesn’t actually consider Amazon (or HBO or Hulu or any other similar company) its true competition. Netflix’s main competitor is something far more elemental: sleep. “When you watch a show from Netflix and you get addicted to it, you stay up late at night. You really — we’re competing with sleep, on the margin. And so, it’s a very large pool of time.”

Why is sleep the main competition rather than Amazon or HBO? “Because the market is just so vast. … and that’s because we’re like two drops of water in the ocean, of both time and spending for people.” Netflix has 50 million subscribers in the United States alone and is closing in on 100 million around the world. HBO has significantly more than that. But the comparison hardly matters, because they have not yet come close to filling all of our time. These companies are not competing to vanquish one another as much as they are competing to fill our every waking moment. Our need to close our eyes is their greatest limitation, because at the end of the day we will still come to the end of the day. Eventually, we have to turn off our screens to sleep.

As I see it, Netflix and its competitors have already staked their claim to our every waking moment. Now their goal is first to fill our every waking moment and then to stretch our waking moments–to increase their quantity. They will create, purchase, and license so much compelling programming that we will watch it from the moment we get home from school or work until the moment we just have to turn in for the night. By releasing entire seasons at once rather than at the traditional rate of an episode per week, they are helping us form habits of binging, of reducing sleep to gain entertainment. They are, by Hastings’ own admission, training us to be addicted to what they provide.

Hasting’s transparency is helpful to those of us commanded by God to “redeem the time.” In the book of Ephesians, Paul speaks of the necessity of living with wisdom, then says, “Look carefully then how you walk, not as unwise but as wise, making the best use of the time, because the days are evil” (Ephesians 5:15-16). Through Paul, God commands us to live with purpose and wisdom, to make the most of every opportunity to bless and serve others. Netflix can help and hinder us in this task. Netflix can help us when it serves as a means of rest from our daily tasks and burdens so we can soon return to our work refreshed. It hinders us when it breaks beyond that, when it becomes addictive, when it causes us to avoid, neglect, or procrastinate the responsibilities God has assigned to us.

Netflix’s goal is domination which makes it opposed to any form of moderation. We, on the other hand, must tenaciously hold to our conviction that work, not entertainment, is the purpose of life. Faith in Christ does not compel us to work so we can rest, but rest so we can work.