Gibson Biddle: prediction

Transcript context

…Do you think the perfect new release experienced improved retention? My guess is because you're telling the story, it's going to be a surprise. And I would guess that it did not. Okay. So your guess is we won't see an improvement in retention. And I'm guessing people, you know, listening to us right now, there's going to be some folks that, oh, shit, yes, that's what everybody's asking for. Of course, we should deliver it to them, right? Well, in this case, both right, right? So we saw a very small change in retention. That was the surprise. And so it went from something like 4.5% canceled in the control. It was 4.45. Very small change. So we can measure it. And so now you get in the math of delight versus margin. If you push this out to all million customers, you would essentially save 5,000 customers. And so what's the value in saving 5,000 customers? The way we valued it, we said, well, we've got 5,000 customers. The lifetime value of a customer then was 100 bucks. And then we multiplied it by two, which is our word of mouth factor. So our theory was if you loved it, Lenny, you'd tell your friends about it, you'd rave about it, and you'd bring in one other customer for free into Netflix. And so we use this two, two X word of mouth factor. And so if you do that math, it was worth about a million bucks to us as a company. So now you get into, okay, what's the cost of that additional inventory? And the answer was 5 million bucks. So on one hand, you're bringing in a million bucks of value by retaining more customers, but you're spending 5 million more So, it doesn't seem to make sense. Okay. So, easy question. Don't overthink this one, Lonnie. Would you roll this out to all customers? I would not. You would not. Okay. Can you help build an argument for somebody who would choose to roll it out?…

Stored transcript either side of the excerpt. The highlighted words are the published quote; the surrounding text is unedited source, never generated.