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Theme Parks, Smart Speakers and VR: How Netflix Thinks About the Future

Netflix is known to embrace cutting-edge technology. The company not only single-handedly introduced consumers to paid subscription video streaming, it was also one of the first of its size to put all of its computing resources into the cloud. But while Netflix is often ahead of its competitors, it is also remarkably conservative in other instances, taking a wait-and-see approach with virtual reality (VR) and other new technologies.

That dichotomy between embracing the latest and greatest and holding off on some other new technologies and business ideas was also on display during the company’s Lab Days, a two-day event for which Netflix invited journalists from all over the world to its offices in Hollywood and Los Gatos, Calif. last week.

Here are some of the things Netflix wants to do, and won’t be doing, in the next few years:

Virtual reality. Most of Netflix’s key competitors have made some moves to embrace virtual reality (VR). Hulu has developed its own VR app, for which it has been licensing exclusive content from Ryot, Live Nation and others. Amazon hasn’t launched its VR efforts yet, but job offers and hires hint at a pretty significant commitment. And Disney, which is set to become a direct competitor when it launches its own streaming service in 2019, released one of the most advanced social VR experiences last year.

Netflix CPO Greg Peters
CREDIT: Courtesy of Netflix

Netflix CPO Greg Peters talking to journalists during the Netflix Lab Days.

Netflix on the other hand has been on the sidelines, and apparently has no plans to change that. “We’ll keep an eye on it, but we don’t have any plans to invest in significant content creation for VR,” said the company’s chief product officer Greg Peters last week. Peters reiterated a point his boss, CEO Reed Hastings, has been making for some time: VR seems like a great fit for gaming, but not so much for Netflix.

Smart speakers. Netflix may not run on a device that doesn’t have a screen, but the company is still exploring how to make use of smart speakers for control and content discovery. “It’s still very early,” cautioned Netflix VP of device ecosystem Scott Mirer. “We still don’t know how consumers are going to engage with those devices.”

Still, Netflix has taken some steps in this space. The company’s service is integrated with Google’s assistant as well as Amazon’s Alexa, allowing owners of a Google Home-type speaker or an Amazon Echo to launch the playback of Netflix shows on compatible TV streaming devices with a simple voice command.

Mirer said that the company had great existing relationships with both Google and Amazon, but that it was still trying to figure out how to do discovery through voice interfaces. “What conversations do consumers actually want to engage in? We don’t know,” he said. But he also hinted at further plans for smart speakers and voice control. “Over time, expect more.”

Sports and news. Facebook and Twitter may be spending more and more money on sports rights, but Netflix has no plans to join them. “No, we are not doing live sports,” said Netflix CEO Reed Hastings during a Q&A session with journalists last week. The company may add more sports documentaries to its catalog over time, but it has no plans to carry any live games, he said.

Reed Hastings Netflix
CREDIT: Courtesy of Netflix

Reed Hastings speaking to journalists during the Netflix Lab Days.

The same is true for Netflix’s approach to news, despite the fact that it recently launched a weekly newsy pod-culture format with “The Joel McHale Show With Joel McHale.” “We don’t do news, we don’t do sports,” Hastings said.

Light Field Capture and high frame rates. Netflix has a team of a dozen employees just working on keeping up with current audio and video production technologies. That team, the audio-visual group, tests the latest production cameras, displays and other equipment to understand which cameras work best for capturing HDR for Netflix’s original productions. “It’s important for us to understand how each camera sees the world,” said Netflix’s managing director for production technologies Chris Clark.

Netflix has been an early adopter of 4K and HDR, and while the company is currently only testing cameras that are ready to be used for its productions, it also keeps an eye out for next-generation capture technologies. Like light field capture for instance, which offers the promise of capturing an order of magnitude more visual data, and then giving creatives the option to change the focus of a shoot and more in post-production. “That’s a very fascinating new way of capturing images,” said production technologies manager Jimmy Fusil.

Netflix testing cameras
CREDIT: Janko Roettgers / Variety

Netflix testing a red camera in its Hollywood offices.

Something that could come to Netflix sooner than footage captured with light field cameras are high frame rates, which are often touted as the next step to improve image quality. The streaming service is already capable of streaming video with 60 frames per second, said Fusil. However, thus far, it hasn’t really been something that filmmakers or showrunners have requested — in part because it may come with its own set of creative challenges, mused Fusil. “Somebody has to come up with a new grammar how to use this.”

Theme parks and merchandise. In the early days of original content on Netflix, CEO Reed Hastings often said that his goal was to become HBO sooner than HBO would become Netflix — meaning that Netflix wanted to build out its slate of originals before HBO was ready to be a big player online.

Now that Netflix does own a lot of original IP, and Disney is ready to enter the streaming business, does Hastings want to be more like Disney, which has been a master at making money with its characters off the screen? Embrace merchandise, and perhaps even theme parks? Maybe a “Stranger Things” ride?

stranger things merch
CREDIT: Courtesy of Target

“Stranger Things” merchandise currently for sale at Target.

“That would be amazing,” admitted Hastings about the prospects of seeing Netflix IP in theme parks. Alas, the company has no such plans. “Not in the short-term,” said Hastings. “Not in the next five or ten years.”

However, the company already did its first merchandise deals last year, selling “Stranger Things” shirts, action figures and even a Eggo-themed “Stranger Things” card game at Target and Hot Topic. “That’s a big one for us,” Hastings said. “We’ll be doing more of that over time.”

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