Saturday, October 16, 2004

Netflix,TiVo and Six degrees of separation

It was interesting to see NetFlix lower their fees in response to Amazon's entry into the market - no wait... on rumors of entry into the market. The stock market reacted immediately to the news and dropped the price by 40% in one day. Why in the world would you want to do that ?

As I dug deeper into this mystery some things became clearer: Leslie Kilgore - the CMO of NetFlix previously served as the director of marketing in - none other than -! Wonder what her buddies warned her. Something so strong that NetFlix decides to cancel their UK launch and focus on the core US market. Hmmm...

On the other hand, TiVo and Netflix announced that they would jointly develop a product to download movies over the internet. And the driver of this deal: TiVo Chief Executive Mike Ramsay who also happens to sit on the board of directors for Netflix. To Mr. Ramsay's credit however he resigned from the board as soon as a"commercial" deal was made. Does this make the situation ethical ? hmmm...

Let's see another director : Richard Barton who sits on several board including the IAC. What - never heard of it ? Here's a summary from stockhouse:

IAC/InterActiveCorp is the world's leading multi-brand interactive commerce company. IAC consists of IAC Travel, which includes Expedia, Inc.,, Hotwire, Interval International, and TV Travel Shop; HSN; Ticketmaster, which oversees ReserveAmerica;; LendingTree; Precision Response Corporation; IAC Local and Media Services, which includes Citysearch, Evite, Entertainment Publications, Inc. and TripAdvisor, Inc.; and IAC Interactive Development which includes ZeroDegrees.

Here's my prediction then: Prepare to see more of Netflix in not only consumer households, but in hotels as well. Imagine a world where your rating,preferences and queues travel with you around the world. All hotels that you stay in are linked to NetFlix's servers to beam you the next movie you are interested in. TiVo already knows your habits, Netflix wil help propagate it.

And all because of six degrees of separation.

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