Why The Paradox of Choice Doesn’t Apply to Netflix

A recent article in Mediapost reported that Millennials – and Baby Boomers for that matter – prefer broad choice platforms like Netflix and YouTube to channels specifically targeted to their demo. A recent survey found that almost 40% of respondents aged 18 – 24 used Netflix most often to view video content.

Author Wayne Friedman mused on the possibility that targeted channels might be a thing of the past: “This isn’t the mid-1990s. Perhaps audience segmentation into different networks — or separately branded, over-the-top digital video platforms  — is an old thing.”

It is. It’s aimed at an old world that existed before search filters. It was a world where Barry Schwartz’s Paradox of Choice was a thing. That’s not true in a world where we can quickly filter our choices.

Humans in almost every circumstance prefer the promise of abundance to scarcity. It’s how we’re hardwired. The variable here is our level of confidence in our ability to sort through the options available to us. If we feel confident that we can heuristically limit our choices to the most relevant ones, we will always forage in a richer environment.

In his book, Schwartz used the famous jam experiment of Sheena Iyengar to show how choice can paralyze us. Iyengar’s research team set up a booth with samples of jam in a gourmet food market. They alternated between a display of 6 jams and one of 24 options. They found that in terms of actually selling jams, the smaller display outperformed the larger one by a factor of 10 to 1. The study “raised the hypothesis that the presence of choice might be appealing as a theory,” Dr. Iyengar later said, “but in reality, people might find more and more choice to actually be debilitating.”

Yes, and no. What isn’t commonly cited is that in the study 60% of shoppers were drawn to the larger display, while only 40% were hooked by the smaller one. Yes, fewer bought, but that probably came down to a question of being able to filter, not the attraction of the display itself. Also, other researchers (Scheibehenne, Griefeneder and Todd, 2010) have ran into problems trying to verify the findings of the original study. They found that “on the basis of the data, no sufficient conditions could be identified that would lead to a reliable occurrence of choice overload.”

We all have a subconscious “foraging algorithm” that we use to sort through the various options in our environment. One of the biggest factors in this algorithm is the “cost of searching” – how much effort do we need to expend to find the thing we’re looking for? In today’s world, that breaks down into two variables: “finding” and “filtering.” A platform that’s rich in choice – like Netflix – virtually eliminates the cost of “finding.” We are confident that a platform that offers a massive number of choices will have something we will find interesting. So now it comes to “filtering.” If we feel confident enough in the filtering tools available to us, we will go with the richest environment available to us.  The higher our degree of confidence in our ability to “filter”, the less we will want our options limited for us.

So, when does it make sense to limit the options available to an audience? There are some conditions identified by Scheibehenne at al where the Paradox of Choice is more likely to happen:

Unstructured Choices – The harder it is to categorize the choices available, the more likely it is that it will be more difficult to filter those options.

Choices that are Hard to Compare to Each Other – If you’re comparing apples and oranges, either figuratively or literally, the cognitive load required to compare choices increases the difficulty.

The Complexity of Choices – The more information we have to juggle when we’re making a choice, the greater the likelihood that our brains may become overtaxed in trying to make a choice.

Time Pressure when Making a Choice – If you hear the theme song of Jeopardy when you’re trying to make a choice you’re more likely to become frustrated when trying to sort through a plethora of options.

If you are in the business of presenting options to customers, remember that the Paradox of Choice is not a hard and fast rule. In fact, the opposite is probably true – the greater the perception of choice, the more attractive it will be to them. The secret is in providing your customers the ability to filter quickly and efficiently.

 

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