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The challenge of complexity- netflix

August 4, 2008

There’s often a temptation for brands to do too much and although new initiatives might seem right for the brand and even make good business sense, there can make an amazingly complex world, even more so.

Witness Netflix’s recent shuttering of its Red Envelope division which distributed over 100 films in its short life, including the critically acclaimed Two Days in Paris.

However, it’s existence created incredible complexity for the company, especially in its relationship with the studios.

According to Variety.

“One hurdle to continuing Red Envelope, execs said, was the notion of
the company competing against the same studio suppliers it was
negotiating with every day over DVDs and streamed content. The
complications involved in acquiring, producing and distributing pics
were an unnecessary headache for a company already battling a resurgent
Blockbuster and the dizzying pace of technological change and consumer
habit.”

Just look at the complexity here..

1. Competing with its own suppliers
2. Having to acquire produce and distribute films
3. Dealing with the competition
4. Copying with technological change
5. Dealing with the pace of change of consumer habits

Netflix is not alone in dealing with such complexity, most brands are trying to work the same things out for themselves with increasingly limited bandwidth.

While the cry from many analysts looking at the agency side of the business is to provide more value add and to deliver more creative business-building ideas, this might be the last thing clients can cope with.

Perhaps, rather than adding to the complexity, we should instead, be looking for ways to help them streamline and simplify the complex.

Posted by Ed Cotton

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