Washington and the grass roots can learn a lot from Netflix’s business model.
It never ceases to amaze me that, in a nation whose cornerstone is the free market, the political process doesn’t respond to market forces. But that might be changing. One of the beautiful things about free enterprise is that it makes life better for the consumer by providing better choices in response to his demands and needs. If a business doesn’t provide better products for less cost, then a competitor will, and the business will ultimately fail. The challenge the American voter faces is to prevail on political parties, elected officials, and government to operate as if they were businesses.
That’s why we need the political process to look more like Netflix’s business model. Washington and the grass roots can learn a lot from Netflix, the online provider of movies via mail and streaming video, and also from its competitor Blockbuster Video. For those of you who haven’t used it (or possibly have no clue what I’m talking about), here’s a brief history of Netflix. Launched in the late 1990s, Netflix began providing unlimited DVDs through the mail for a flat monthly rate in 2001-2002. For roughly $20 a month, you could watch one or 100 movies-quantity didn’t matter. The other part of its offering and, frankly, the best part, was that Netflix didn’t charge late fees. In contrast to Blockbuster, which was charging three or four dollars per rental and imposed late fees, Netflix made significant gains in the market by making video rental easier and more cost effective for the consumer.
But Netflix didn’t stop there. As high-speed Internet became more prevalent, bandwidth improved, and on-demand digital media began to replace the need for physical DVDs, the company has gone on to provide unlimited access to its online library of 10,000 movies for just $7.99 a month. So instead of renting one movie at Blockbuster for $4.99, you now don’t even have to leave the comfort of your home to get a movie, or 10 for that matter. While some might question whether this is progress for civilization, for someone like me with three small children, this is a bold step for mankind.
The upshot: In 2010, Blockbuster declared bankruptcy while Netflix had a market capitalization of $4 billion. Forced to respond to Netflix’s competition, Blockbuster is now offering similar programs and access to movies at an earlier date than Netflix.
The point here is that the established brand, Blockbuster, was not on the cutting edge and did not respond to consumers’ changing needs or the march of technology. In the face of fresh new thinking, the company was defensive and reactive rather than proactive. This allowed Netflix to grab huge market share. The DVD and movie rental market has become more responsive and efficient for the consumer.
So take this analogy into the world of politics, with Blockbuster standing for the traditional parties and Netflix serving as the Tea Partiers and the progressives (in their respective ways). For years, the major political parties have been the only game in town. They’ve often been unresponsive to voters, abusive of donors (yes, abusive), and protective of the status quo, including incumbents who don’t adhere to their own party’s platform.
Then along came the progressives in Colorado, who decided that they didn’t have to put up with the old party structure anymore. When the party was unresponsive, progressive donors like Tim Gill, Patricia Stryker, Rutt Bridges, and Jared Polis decided to go around the tired, sluggish dinosaur to create mobile and responsive privatized political infrastructure. In roughly five years, the Four Horsemen of Colorado ran roughshod over the state, flipping the state house and state senate, the makeup of the congressional delegation, both House and Senate, and turned the state from red to blue in the presidential elections. They did it by creating a network of tax-privileged 501(c)(3), 501(c)(4)s, and 527 organizations that did anything from opposition research to identifying and training candidates to policy papers, and the entire network was responsive to them and their priorities. Gill et al. created a model that was effective in Colorado-and replicable in other states.
The Tea Partiers have done something similar, but instead of starting in one state, theirs has been a much more spontaneous act, rising up in thousands of communities across the nation. The Tea Partiers saw unresponsive parties and elected officials, and realized that the status quo was destroying America. They are now acting as “policy consumers” who have had enough of the current product. They want something new, and it boils down to this: direct access, greater accountability and transparency, and more responsive, appropriately sized government that respects the free market and individual liberty. Like Blockbuster, the traditional parties are currently slow and top-down-more interested in protecting the ruling class than responding to voters and donors.
But the times, they are a-changin’. The parties aren’t what they used to be, and Tea Partiers are simply not content with doing things the way they’ve always been done. There is too much at stake; in the end, the health and the survival of the American Republic. Are they going to start a third party? Absolutely not. Should they? Absolutely not.
But if the parties can’t offer them what they want, which is greater accountability for officials and fiscal responsibility, the Tea Partiers are more than content to do it themselves. They are seeking to change the political process by creating a privatized political infrastructure that will bankrupt the old party system and make it obsolete.
By creating 501(c)(4)s, (c)(3)s, PACs, even LLCs, with initiatives like King Street Patriots’ True the Vote; or “heat mapping” and macro- and micro-targeting databases for their local communities, identifying and running candidates at all levels of office; they are laying down the foundations for something that could lead to long-term, systemic change and that will have a lasting impact on our country. They have, so far, made amazing inroads in a short amount of time. Between April 2009 and November 2010, the Tea Partiers, many of whom are new to the political process, were able to dramatically alter the political process.
Unless the major political parties, particularly the Republican Party, choose to adapt and become more responsive to the demands of their consumers-the voters-the end result of this consumer politics will be that the real political energy will go into privatized political infrastructure. That infrastructure will take the vehicle of the Republican Party and make it do the right things. Republicans are already losing market share to these more independent forces, but what is important is that, as the Netflix of American politics, the Tea Party will ultimately produce something better for all of us.