Talking about the major revolution that Netflix conducted in the media industry does not do justice to the innovations it has introduced to its viewers. The history of the company’s development is so thickly punctuated by game-changing breakthroughs that it should be credited with not one, but several revolutions.
Everything Netflix did over the course of two decades – be it delivering a content catalog to customers’ homes, launching videos on demand, hosting its business on a cloud, or pioneering video technology – is known to have unleashed innovatory forces that changed the way we think about entertainment.
More and more viewers worldwide now subscribe to Netflix, enjoying its wide variety of programming and often avoiding its geo-blockage with this list of tips for optimizing their Netflix experience.
To appreciate the revolutionary spirit of Netflix’s ideas, we need to look at each of them from a historical vantage point lest the magnitude of its latest achievements dwarfs its earlier accomplishments. However uncomplicated it may seem now, the idea that set the company’s business in motion in 1998 was decisively ground-breaking. Back then, having implemented a subscription-based business model, Netflix started delivering DVDs to people’s houses via US Postal Service.
To attract viewers’ attention to the movies they could order, Netflix created their online catalog. This was an unprecedented move in those times. Before Netflix struck upon the idea to design the web-based list of movies, people had only leafed through film catalogs in stores – like Blockbuster. The advantage of this web catalog of films was immediately clear: regardless of their physical location, viewers could order any movie existing in Netflix’s library. In-store rentals, by contrast, restricted customers to the store’s arsenal of DVDs. The web catalog also spared people the trouble of getting dressed, and going outside, just to fetch a movie.
Movie on Demand and Unlimited Rentals
Driven to boost rental rates, Netflix soon introduced another fresh detail into its business. Customers were invited to wait in line for the next movie they wanted to watch. The creation of the waiting line had a stimulating effect upon viewers: they were motivated to return a rented DVD sooner to overtake those who lined up to order the same film.
Along with the waiting line, Netflix then created a movie recommendation system, Cinewatch, unobtrusively advising customers on what to view next. With their interest in a new film or show aroused, subscribers were thought to be more willing to order another DVD. A few years later, Netflix came up with yet another ingenious idea and launched an Unlimited Movie Rental program.
The new subscription model offered people unlimited movie rentals and allowed them to order as many as four DVDs simultaneously at a fee of fewer than twenty dollars a month. The goal of this program was to strengthen customers’ loyalty and retention. A content recommendation system, Cinematch, was soon invented. Likewise, Cinematch was designed to keep customers irresistibly attracted to Netflix’s library.
Technological developments made an inexorable demand on Netflix to keep pace with the times and, in 2007, inspired it to start its streaming services known as the Watch Now program. Targeted at power users with broadband internet connections, the program required them to have a 1mbps internet connection to watch films and a 3mbps internet connection to stream DVD-quality movies.
For less than twenty dollars, viewers could access 18 hours of streaming content, receiving it through a browser applet that they needed to install in advance. Netflix’s subsequent, slightly more expensive, plan allowed customers to enjoy unlimited streaming and choose any movie among a thousand available videos. An unqualified success, the Watch Now initiative increased the number of Netflix’s subscribers by 18 percent, almost doubled its income in comparison to previous years, and laid the foundation to a new cultural phenomenon christened as “binge-watching”.
Video Player and the Cloud
The next challenge the company took up was the development of a video player that could be connected to a television, through which movies could be streamed over the internet. This is when Microsoft came to Netflix’s assistance. In collaboration with Microsoft, Netflix developed a native app for the game console Microsoft Xbox 360 that enabled people to watch movies on their television through their game console. Although working in tandem with Microsoft opened a market of twelve million Xbox live members and, as a result, brought Netflix’s revenue to 1 billion for the first time in its history, this partnership still was not the peak of the company’s development. Other pathbreaking discoveries soon followed.
In 2010, due to some technical setbacks in its system, Netflix decided to host its business logic on the cloud. This emergency decision later proved to be another successful milestone in the company’s growth. By building a solid cloud infrastructure, Netflix could expand its services to more than 190 countries.
After signing several content-licensing deals with television studios and, with time, becoming a major revenue source for their channels, Netflix initiated its own original programming – issuing its first original series titled House of Cards. Netflix Originals liberated the company from its dependence on various movie and television studios and gave it leverage over its supply chain of content providers. The decision to start its own movie series was based on strict analytics.
When pondering over what series to launch, Netflix factored in such details as the popularity of the genre, director, and actor, and diligently analyzed people’s computing responses to the 1990 BBC miniseries on which Netflix’s analysts thought to base their new drama. Having scientifically ascertained that the majority of people would gladly watch a political thriller directed by David Fincher and starring Kevin Spacey, Netflix commissioned two seasons of the series for 100 million dollars. The House of Cards was destined to continue for 13 seasons and generated not only a loyal audience but also imitators of Netflix’s daring idea. Amazon Prime Instant Video and Hotstar immediately followed suit and began their own original series in the hope of recapitulating Netflix’s resounding success.
The ending of Netflix’s revolutionary enterprises is nowhere in sight. With more and more people subscribing to Netflix and practicing marathon-viewing, Netflix will surely continue catering to their tastes and wishes, probably soon changing our entertainment world out of all recognition.
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