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A decade before Airbnb persuaded homeowners to transform their homes into hotels, Netflix convinced its users to turn theirs into mini Netflix warehouses. Customers who held onto their DVDs for longer meant fewer shipping costs for Netflix, and fewer DVDs for the company to manage and store. Netflix tracked heavy users of its service — labeling them internally as “pigs” — and secretly throttled their deliveries. It didn’t matter if Netflix rented fewer DVDs than Blockbuster, because the company would keep collecting its monthly fee. The difference between Blockbuster and Netflix was this: Blockbuster punished customers for being forgetful; Netflix rewarded them for being mindless.

N+1 Magazine     Dec 16, 2024