Unit 1 - Task 3

 Unit 1 - Task 3 

Introduction

Netflix were ahead of the curve taking streaming online, and the foresight in creating its own hit shows and films allowed it to continually keep subscribers and becoming the powerhouse it is today, another key part of Netflix’s product is the algorithm that is built into the streaming service.

Therefore, within this chapter, I will be focusing on the products that gave Netflix the edge over its competitors. Including the streaming service, the Netflix own shows and films, and the algorithm which keeps its customers binging.

Product – Streaming service

Storytelling is ingrained within us, it’s one of the most natural and long-standing forms of entertainment we know. Our ancestors would have previously gathered around a fire to tell stories, to now, watching multi-million-dollar budget shows and films, all from our own sofa.

Netflix originally began as a DVD rental service in 1997 and announced its digital streaming option straight from your computer in 2007. For many who we already subscribed to Netflix’s service, the streaming options were unlimited. Three years later, in 2010, Netflix announced that it would only be available online through the streaming service, and no longer renting DVDs. This is when Netflix began expanding beyond the US, firstly to Canada in 2010 also. By 2016, just six years after going fully online, it was available in over 190 countries and territories.

Netflix saw the opportunity of the internet, and the future it has now created. It perfectly took advantage of the technological advances of the internet and our innate need for storytelling and entertainment. Now, it is hard to imagine a life without streaming services, and Netflix pioneered the product.

Product – Own brand shows

In 2013, Netflix paid near $100 million for the rights to its first hit show, House of Cards.

A Netflix spokesperson at the time rationalized the move to the press, stating “Part of our goal is to become HBO faster than HBO can become Netflix… when I say, ‘Game of Thrones,’ you think of HBO… But if I say ‘The Dark Knight’ you don’t think HBO – even though you can watch it on HBO… You have to have your own content that can’t be contained anywhere else.” Original content has become the reason to go to Netflix now above other streaming services. 

Netflix still states today that it owes much of its success to House of Cards. Just five years later, in 2018, Netflix had over 1000 original shows. 

Overall, Netflix have provided customers with quality video content. Not just content that they could get elsewhere potentially on another platform one day, but Netflix originally produced content that you can only get on Netflix, always. 

Product – The viewing algorithm

One of the key differentiators between many streaming services and Netflix was the early inclusion of the viewing algorithm. In 2006, Netflix launched a competition, with a prize of $1 million to those who could improve Netflix’s recommendation system by 10%, which at the time was for the DVD rental service, showing that Netflix have highly regarded the viewing algorithm from the start.

Netflix now do not have just one algorithm, but as they state, a collection of different algorithms serving different purposes that come together to create the complete Netflix experience. (Gomez-Uribe) With the online streaming service, Netflix are able to capture a vast amount of data very easily, and analyse this data accordingly. For example, every show you watch, they will now exactly how long you spent watching the video, and much more. Netflix’s homepage is full of recommendations based off this data, although categorized often by genre, they are all recommended for you based off your previous watching history. 

If the consumer is consistently shown a product that the streaming service knows the consumer will enjoy, the consumer is much less likely to leave the service.

Conclusion 

In conclusion, Netflix’s product can be divided into three clear sections, the actual digital streaming service, the original Netflix shows and films, and the viewing algorithm behind the service.

Netflix managed to envision digital streaming before the internet became what it is now, it thinks of the consumer every step of the way, from having so many shows and films at your finger-tips, to producing their own high-quality content, to personalizing recommendations for the consumer.