Netflix is the Pied Piper that led hordes of subscribers out of TV Land. But Netflix innovation hasn’t stopped at with its disruption of the video entertainment industry. Evolving technology has reshaped consumer appetites, and with that fluidity comes a shift in strategy for the media giant. Now, poised for another round of disruption, the streaming service banks on creating quality content, refining the algorithm for user recommendation, and ensuring seamless service by going to the Cloud as its Netflix future strategy.
It’s All About the Content: The Rise of Netflix Originals
Content creation has been a part of the Netflix innovation portfolio for years. Netflix first tried its hand in producing original content in 2013. Political thriller “House of Cards” was one of Netflix’s early original materials. The 6-season series proved to be a pot of gold. In fact, the “House of Cards” was the first original online-only web TV series to be nominated for major Emmy awards. The series was surely the beginning of the company’s Netflix future strategy of creating engaging and quality content. Aiming to boost its library content, Netflix is steering 85 percent of its expenditure towards original TV shows, movies and other productions.
Certainly, ramping up content creation as a Netflix future strategy is rational. With content companies moving to create their own streaming services, Netflix will soon lose its rights to stream several licensed contents. The departure of crowd favorites is looming. Warner Media is pulling out “Friends” by the year 2020. Disney will pull out its content within the year. And NBC Universal is taking back “The Office” and placing it in its own streaming service. Observers can’t help but shake their heads. When licensed content makes up a considerable percentage of Netflix offerings, there is a good reason to be alarmed.
In Detail: Netflix Future Strategy
Some see the Netflix innovation in content creation as a mere response to competition. While there may be hints of truth to it, there’s a lot more to it than meets the eye. For one, Netflix has opened its doors to independent filmmakers. The move created a free market for upcoming talents, and it introduced fresh content to its subscribers. In addition, Netflix is working on forging partnerships with acclaimed directors and writers such as Damien Chazelle, the Coen Brothers, Alfonso Cuarón, Shonda Rhimes, Ryan Murphy, Guillermo del Torro, and Martin Scorsese. Undoubtedly, by creating a powerhouse of creatives, Netflix eyes to increase its prospects with award-giving bodies.
In truth, great content is the only way streaming platforms can keep viewers glued to their screens. Despite the growing competition, the rise of Netflix originals is the company’s long-term bet to retain the loyalty of its subscribers. Indeed, Netflix innovation around content seems to be moving in the right direction.
Netflix Innovation: Altering the Algorithm for Better Viewing Experience
The personalized video recommendation system is a Netflix innovation. In the early days, Netflix maintained a database of ratings and reviews, which suggests the next titles to watch for the customers. This database was the precursor for Cinematch—Netflix’s video recommendation algorithm. In 2006, the company launched a $1-million-progressive contest, which aimed to improve Cinematch’s accuracy by 10 percent. The competition, won by BellKor’s Pragmatic Chaos in 2009, has made a significant impact on subscribers’ viewing habits.
Today, Netflix’s recommendation system has gone past matchmaking. As part of the Netflix future strategy, the company goes beyond bringing the content that matches the subscriber’s preference. The updated algorithm works by gathering data from the subscriber’s viewing habits. The data is then compared with thousands of hyper-specific micro-genres and taste groups. From this process, Netflix curates the right content, showcases the titles at the right time, and fine-tunes the visuals down to the layout of the suggested content and thumbnails used with the titles.
With the use of machine learning, artificial intelligence, and heaps of creativity, Netflix innovation with algorithm has personalized every viewing experience. Without a doubt, Netflix manages to pique the interest of subscribers to try a variety of new contents.
Seamless, Cloud-Based Service for Netflix Subscribers
With top-rating and highly-anticipated programs like “Stranger Things”, “Black Mirror”, and “The Crown”, it’s not surprising that Netflix hogs 15 percent of the global downstream, online traffic. To date, Netflix has more than 148 million subscribers worldwide. With such an amount of traffic and expansive global customer base, traditional IT infrastructure will not be able to stand against the demand. The choice was as clear as day: Migrating to the Cloud is the most logical Netflix future strategy.
The Netflix move to the cloud was meticulous, massive and high-profile. The transformation began in 2008 when the streaming company experienced a data center failure that stopped its operation for three days. During this time, the company’s core business was still the mailed DVD rental service. The outage prompted the company to re-evaluate its IT infrastructure. In 2018, Netflix completed the migration of all its data centers to Amazon Web Services (AWS).
An Evolving Netflix is a Better Netflix
We definitely have to give it to Netflix— hands down, the company can provide a master class on innovation and disruption. From a DVD mailing service to online streaming to content production, Netflix is flexible and can evolve and change strategy as needed. In a constantly shifting technological and business landscape, the ability to evolve with the changing times is highly valuable.