BIZMOLOGY — Like many, I have found that some of my favorite movies and television shows were recommended to me by friends and family. Video streaming service Netflix today announced a new feature allowing its US customers to take full advantage of that fact. By the end of this week, all streaming subscribers in the US will be able to link their Netflix and Facebook accounts to see what their friends are watching and to share their own viewing habits with others. Once the application is enabled, users will see new areas on their Netflix account page called “Friends’ Favorites” and “Watched By Your Friends.” This information is automatically shared within Netflix and may be optionally shared on Facebook.
Netflix’s international customers have had this option for about a year and a half, but introduction to the US market was prevented by a 1988 law that banned the sharing of video rental records without written consent from the customer. After years of lobbying, the law was amended in early 2013, paving the way for this launch.
This move is yet another step by Netflix to socialize its user experience, which it hopes will increase customer engagement and customer loyalty and ultimately help it reach its goal of 90 million subscribers (current subscriber number: about 33 million). And what better venue than Facebook with its 1 billion monthly active users; that’s a lot of potential customers who could be exposed to the cool (and not so cool – yes, I admit I have a documentary about New Guinea birds of paradise in my queue) content available via Netflix’s streaming service.
Netflix knows a thing or two about the peaks and valleys of customer loyalty. The company was riding high in early 2011 after finding itself atop Brand Keys’ Customer Loyalty Engagement Index, but just a few months later, after announcing fee increases and a plan to split its DVD and streaming services, customers were fleeing. Some 800,000 customers cancelled in the third quarter of that year. Netflix has since regained its footing, but it still has a way to go to match the customer loyalty of early 2011.
As with almost anything Facebook-related, privacy is a major concern and one that Netflix is proactively addressing. The company is emphasizing that sharing viewing history on Netflix only is the default option; users must change their settings to enable sharing on Facebook. In addition, specific titles (like, say, bird documentaries) can be manually exempted from the shared listing and the Netflix/Facebook integration may be undone at any time.
It seems like a good move. I don’t know anyone who doesn’t like talking about what they’ve been watching with friends, which can generate the type of engagement needed to maintain existing customers and lure new ones. Investors seem to agree as well; shares of Netflix closed at $192 today, up 6%.