As PM for Netflix Originals, would you increase Netflix original content budget with fewer licensed shows, or maintain current content mix?

Introduction

The trade-off we're examining today is whether to increase Netflix's original content budget at the expense of fewer licensed shows, or maintain the current content mix. This decision is crucial for Netflix's long-term strategy and market position. I'll analyze this trade-off by considering user impact, business objectives, and content strategy implications.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm assuming this decision is driven by increasing competition in the streaming space. Could you confirm if there's been a recent shift in the competitive landscape or user preferences driving this consideration?

Why it matters: Helps understand the urgency and strategic importance of the decision. Expected answer: Increased competition from Disney+, HBO Max, etc., affecting content acquisition costs. Impact on approach: Would influence the aggressiveness of the original content strategy.

• Business Context: Based on our current revenue model, I'm thinking original content might have different profit margins compared to licensed content. Can you share how our content costs and revenue generation differ between originals and licensed shows?

Why it matters: Helps evaluate the financial implications of the trade-off. Expected answer: Original content has higher upfront costs but potentially better long-term ROI. Impact on approach: Would affect the balance between short-term and long-term financial considerations.

• User Impact: Considering our user segments, I'm wondering if we have data on how different types of content affect user acquisition versus retention. Do we know if originals or licensed content play a stronger role in these areas?

Why it matters: Helps understand the impact on user growth and churn. Expected answer: Originals drive acquisition, licensed content supports retention. Impact on approach: Would influence the content mix strategy based on growth vs. retention priorities.

• Technical: Given the potential shift in content strategy, I'm curious about our recommendation algorithm's ability to adapt. How flexible is our current system in promoting a different content mix?

Why it matters: Ensures technical feasibility of the strategy change. Expected answer: Algorithm is adaptable but may require some tuning. Impact on approach: Would determine if additional technical resources are needed to support the change.

• Resource: Thinking about our content creation pipeline, I'm wondering about our current capacity for producing original content. Do we have the infrastructure to significantly increase original production, or would this require substantial new investments?

Why it matters: Assesses the feasibility and resource requirements of scaling original content. Expected answer: Some capacity exists, but significant increase would require new investments. Impact on approach: Would influence the timeline and scale of any shift towards more originals.