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Why Netflix is a hotel game changer

Until I subscribed to Netflix, I never gave it a lot of thought. Its share price, tripling in the past year, has certainly put it on the list of many investors. I, for one, sadly admit I have no Netflix shares; although with performance at that level, I wish I did.

For those who do not have Netflix or are not familiar with its utility, let me give you a quick primer. This is an online movie and television subscription service. For roughly US$10 per month, a subscriber gets unlimited access to thousands of movies and TV series. Your subscription allows you to set up multiple devices — for example, your high-def TV, tablet and smartphone. Connection to a dedicated viewing screen requires a box such as an Apple TV, Microsoft Xbox or Sony Playstation. The setup is so simple even I could do it.

Once you’re hooked up to Netflix, your viewing habits change. Broadcast television is reduced to sports, news and live special events (the Oscars, for instance). Replacing this is commercial-free binge-watching. Two movies a night or three episodes of a hit series are no problem; I multitask during these, of course, or else I wouldn’t get any work done! Moreover, the Netflix interface is intuitive; as you watch shows, it analyzes your viewing habits and recommends selections from its libraries to match your previous selections. It’s uncanny how well it works in the long run.

And that’s the problem: it’s addictive. Because it remembers you, not your device, you can start watching on your home theater then continue to watch on your tablet while traveling. With an easy-to-use interface and exhaustive quality content, why would any of your customers even bother to turn on the television in their guestrooms?

The answer: only because you have inadequate Wi-Fi bandwidth. And if that’s the case, they will not consider your property to be delivering the level of service they need. Netflix — or any Internet video streaming — takes a hefty toll on a network.

That said, consumers aren’t going to empathize with you for living in the past with your slow Internet connection. They want to watch a show on Netflix, and they want to watch it now. Trying to reorient customer habits is a vastly more difficult task than simply going with the flow and meeting consumers where they already are.

And, increasingly so, your guests want Netflix, so give them what they want!

Now, think of the implications on a broader scale. A standard Netflix account allows for up to four different users. For example, a couple could arrive at your property with two separate tablets, each watching their own content. The demands on your property’s bandwidth are destined to explode.

At the same time, any income you anticipated making from television pay-for-use are truncated. Why would a guest bother to pay for a new movie when they can get one that’s three months older for free? The only potential advantage of your TV setup is monitor size. So unless your in-room sets are huge, they do not stand a chance.

Netflix is just one of many applications for mobile computing that command exponentially more bandwidth for effective usage. This one, however, is the most bandwidth-intensive and user-compelling. Once again, this is another reason for you to reexamine not only your Wi-Fi capacity but also how you reach your guests with promotions. Knowing that broadcast television is falling in favor of on demand streaming services, what does this mean for your in-room TV promotions channel? Furthermore, why not increase guest satisfaction by attaching a box in each guestroom so guests can access Netflix on the big screen?

(Article published by Larry Mogelonsky in HOTELSmag on October 16, 2013)

Larry MogelonskyWhy Netflix is a hotel game changer