And frankly, it's nothing compared to how it's now directly challenging Apple and Google.
Normally, you might look skeptically at a company that says Amazon doesn't know what it's talking about. But Netflix CEO and founder Reed Hastings has proven time and again that he isn't afraid to blow up his own business model--and replace it with something better.
There are two new Netflix changes we're focusing on. One of them is something that's been teased for a while, and the other is supposedly just a test--but nevertheless caused an outcry over the weekend. They're clear signs of the company going in a different direction. So let's take a look:
1. No more user reviews
Yep, it's official. Netflix got rid of user reviews over the weekend. They've been talking about this for some time, as they claimed that very few people were interacting with the reviews lately anyway.
However, there's a bit of a chicken-and-egg issue here: Before deleting them altogether, Netflix had already made reviews inaccessible from anything other than its Web-based interface. How often do you actually look up a movie or show on Netflix.com? No wonder people weren't using them.
This had its original genesis a year or more ago, when Netflix said it had detected a lot of projection bias in reviews. People were giving 5-star ratings to prestigious documentaries that they never watched, for example, while giving lower ratings to "guilty-pleasure favorites like Armageddon" that they actually watch all the time, according to Entertainment Weekly.
Now, the only feedback you can offer on particular shows is a thumbs up or thumbs down. Which is fine, but it's pretty much the opposite of Amazon Prime Video, where shows have thousands and thousands of reviews and ratings, just like almost every other product on Amazon. That's one of Amazon's baked-in advantages--hundreds of reviews or more of every product they sell.
So that means Netflix is basically going 99 percent with its algorithmic suggestions, to try to get you to watch particular new shows. Amazon still has a workaround where you can see what other people are saying. Which is better? We shall see.
2. Ads (or at least promos)
Remember, we said Netflix will now make recommendations algorithmically 99 percent of the time. The other thing it's trying out--and this move actually caused an uproar over the weekend--is the idea of running ads between episodes of Netflix shows for other Netflix shows.
At least for select viewers now, if you try to binge watch Netflix shows, Netflix has started to show advertisements between episodes--for other Netflix shows. However, even more than with other streaming services, the idea of Netflix running ads for anything seems antithetical.
Members started taking to social media to complain, including Reddit. Responses were kind of what you'd think:
- "This is what drove me from Hulu immediately. If I pay you for a subscription and you still serve me unskippable ads, you can.... [OK, we'll stop this quote here but you can imagine the X-rated suggestion that comes next. It's Reddit, use your imagination]"
- "I'd rather stop watching Netflix than have them run ads. Swear to god the first one I see I'm canceling. Been a member for 5 years, shareholders can [sorry, same reason, we'll pick up the quote in a second] if they think that's the right direction to go."
The ads so far seem to be limited to select users or possibly select countries.
"We are testing whether surfacing recommendations between episodes helps members discover stories they will enjoy faster," Netflix told Ars Technica, which first caught and reported on this over the weekend.
The rationale: It appears that the ads are only for shows that are actually produced by Netflix, as opposed to licensed from other production companies. That makes sense, and it means Netflix can probably weather whatever moderate outcry it hears over this.
But the interesting thing here is that Amazon Prime already shows ads for other shows before you watch what you select. (At least it showed an ad for another show before the episode of The Marvelous Mrs. Maisel that I selected as a test while writing this article.)
The difference, I suspect, is that Netflix actually started out opposite of Amazon here, too--in that Amazon never began a practice of not running ads. In fact, if you search for just about anything on Amazon, whether it's videos or lawn mowers, you pretty much know you're going to be served sponsored results--hopefully along with pure organic results.