About the industry
Discuss about the Innovation and Business Development Of Netflix.
In the modern world, innovation is considered as a strategy that is used by organisations to gain more success and profits. Innovation and entrepreneurship work simultaneously so that managers can understand the level of changes that are required for implementing the strategies. As such, innovation opens up opportunities to satisfy customers and gain a competitive advantage in the market. However, as stated by Drucker (2014) the innovation adopted by the organisations need to be smart so that more profit can be generated along with the loyalty and trust of the customers.
The assignment highlights the importance of innovation and makes a comparison about the effect innovation has on a particular industry and organisation. To provide a more specific discussion about the effects of innovation, Netflix is considered along with the media industry in which it works. A comparison is made by analysing the past 10 years of the company and industry along with the predictable future of the 10 years. The comparison is made taking the progress of the industry and the company separately and the impact it may have on one another.
Streaming media is in a multimedia industry that constantly receives signals from live sources and delivers it to the customers. The manner of obtaining video from live sources has prompted people to coin the term stream. This is the form of delivery that is provided to the audience and helps them to enjoy the shows by watching them online or by downloading it (Vogel 2014). The industry came into existence in the early 1930s wherein the elevator music was considered as the most popular form of streaming media.
As observed by McLuskie (2017) the change of time has changed the form of streaming media and nowadays, the internet is considered as the main source of streaming media in the world. In the modern world, the streaming industry has become a most popular form of viewing movies and television series. The manners in which people perceive the viewing of their favourite shows have provided an opportunity for the expansion of the industry. The developments of companies that promote the shows such as Netflix, Fox and CW have elevated the industry to a new level. Some of the other popular streaming services provided include Spotify and Apple music for the live streaming of music all across the world.
Netflix is an American public company that provides entertainment to the people. Reed Hastings and Marc Randolph founded the company in the year 1997. The headquarters of the company is in Los Gatos, California. Netflix specialises in providing streaming media and video-on-demand online. The expansion of the company in the film and television productions has enabled it to gain a huge reputation in the market. It possesses an online distribution store that helps Netflix to channel various shows and movies to customers all over the world. Currently, the company provides its network across 190 different countries (Netflix.com 2018).
About the company
However, despite its success; some of the countries like Mainland China, Syria, North Korea and Crimea have boycotted the use of the network channel mainly due to its American origin. The first content production of Netflix started in 2012 after it had launched the television series Lillyhammer. Since then, the company have expanded its production in both television series and movies. The development of Netflix Originals has provided the company with an opportunity its personal online library of movies and television series that are mostly enjoyed by millions of customers (Burroughs 2018). In 2016, the company had a record-breaking release of 126 original series and films, which until date none of the other production houses has managed to achieve (Netflix.com 2018).
The streaming industry had come into existence since the early 1930s and had slowly developed into its current stature. In the words of Galindo and Méndez (2014), the streaming industry began to shape itself with the advent of the internet. However, going back to a decade, the success of the streaming industry was not that popular. This is mainly because the customers preferred to watch the shows after returning home and viewed the shows on the television. Moreover, internet in most parts of the world was not developed. Hence, the people around the world failed to use the online streaming facility that was provided.
As observed by Johnston and Marshall (2016) during the past ten years, the streaming media was at a $0.75 billion. The breakup of the manner in which the industry has developed can be analysed by keeping in mind the lack of quality resources that could help in the streaming videos. Hence, companies like Netflix and Fox could do little to continue with the production of online sources of the movies and videos. The reason behind the cause of success for Netflix is that it focused on taking the challenges that it received during its initial years. Despite this, a statistical analysis of the growth of the company is shown to have reached from making $0.75 billion in 2007 to over $10 billion in 2017.
As observed by Christensen, Raynor and McDonald (2016) Netflix is the world’s leading internet network that provides entertainment via the television media. The popularity of the company during its early years was insignificant as it lacked the conviction of entertaining people. Even with the development of its first series in 2012, the company managed to receive negative feedback from the people. However, the innovation of the company has been largely due based on collaborating with successful franchises like the Marvel franchise.
The popularity of the Marvel Cinematic Universe and other crime-related series such as the Mind hunter has helped in elevating the status of Netflix in these past ten years. Statistically, it has been seen that the growth of the company ranging from 31st December 2007 to 1st January 2017 has seen an increase from $1.2 billion to $8.8 billion (Netflix.com 2018). This signifies the rate at which the popularity of the company has increased and the impact it has on the growth of the streaming industry. The net income of the company is about $559 million, which suggests that despite a slow start of the business, the past ten years have been productive for the company.
Industry in the past 10 years
After having analysed the present demand of streaming and the manner in which it has grown over the years, it can be said that in the next 10 years, this industry may grow to dominate the world. The manner in which people respond to online streaming of favourite television shows and movies indicates the nature of growth that the industry has sustained. The growing popularity of the internet and the increased channels that provide different movies and television shows contribute heavily to the growth of the industry. As stated by Barron et al. (2015) the opportunities that the industry can provide in the future include more promotion of the streaming industry in remote parts of the world. This can help in making the industry as number one in any business market.
Last year it was seen that about 50% of the internet usage was dedicated to watching online videos. The estimation of the usage of internet is expected to rise by 20% within 2028. The introduction of 4G-internet connection has also contributed to the downloading of the movies and television series in smartphones and laptops. Escoffier and McKelvey (2015) stated that the live streaming of the shows has been made popular more due to the existence of smartphones. Netflix adopted this blue ocean strategy to mitigate any competition that arises from other television companies. At the same time existence of different competitions such as Netflix, Amazon Prime, WB, CW have managed to enhance the growth of online streaming among the population and ensure its survival.
Netflix has tasted recent success with the introduction of highly successful shows. The company gained popularity from 2013 with the introduction of the show Orange is the New Black and have since then continued its growth. Recent television shows such as Mind hunter and the collaboration with the Marvel Cinematic Universe have guaranteed the success of the company in the next years. Ulker-Demirel, Akyol and Gölba??-?im?ek (2018) observed that investing in Netflix might provide investors in earning huge profits. This is mainly because of the excessive streaming of the audiences of Netflix related shows and the subscription facilities it provides to the people.
Investing $1000 in Netflix in 2008 can help in gaining about $51,000 in 2018 (Netflix.com 2018). Therefore, the growth rate of the company has been in excess and it is expected that the company may earn a profit of $50 billion within 2018. Apart from this, the continuation of the shows such as that of the Marvel franchise and Mind hunter can help the company maintain its popularity in the market. At the current growth rate, Netflix is likely to continue its operation in the industry and can innovate by renewing contract with popular shows such as Stranger Things for the remaining three seasons (Aguiar and Waldfogel 2017).
The analysis of the industry and the company states that the entertainment industry has grown in huge popularity in the modern world. The manner in which customers provide responses to the new movies and series, contribute heavily to the growth and popularity of the industry particularly in the modern world. The analysis shows that certain factors contribute to the growth of the industry and these factors are important to analyse the growth and popularity of the industry (Hiller 2017). The online streaming of the television shows and movies have increased due to the technical development that has taken place world.
Company in the past 10 years
According to Escoffier and McKelvey (2014), the technical development has come in the form of increased number of smartphones and a highly efficient internet connection. The introduction of smartphones has resulted in people watching the movies and televisions while they travel. The streaming of the shows provides opportunities for download and people tend to save the shows for future view. At the same time, the introduction of high-speed internet connection has resulted in the increased download of the shows and people continue with the online streaming. The increased number of network channels has also contributed to the popularity of the industry.
The competitors of Netflix such as CW, WB and Fox have contributed to the growth of the industry and the companies. The availability of various television shows and movies in these networks attract people into subscribing to the channels (Chao, Hegarty and Fray 2016). The revenue generated from these shows have resulted in the slow and steady growth of the industry and within the next 10 years, the entertainment industry can be considered as the most industry in the world. At the same time, the popularity of the shows hosted by Netflix has brought the company closer to the audience. Hyatt and Johnson (2016) stated that the shows that are continuing in the company have the potential to attract the audience and ensure that a new era in technology and entertainment can be formed.
Conclusion
Hence, it can be concluded that the popularity of entertainment in the modern world have grown significantly. People enjoy new movies and series each day to get relief from the stress factors. Innovation in any industry and company contribute to its growth and development. In the case of the entertainment industry, the innovation is seen in the form of new concepts and stories that are developed each week. Hence, the continuous growth of the industry and the companies involved in it is an indication of the popularity of the shows in the market. The discussion shows that there has been a significant growth in the entertainment industry due to the emergence of live streaming and the high-speed internet. The various networks such as Netflix have managed to provide the required shows that are essential for the growth of the company as well as the industry.
References
Aguiar, L. and Waldfogel, J., 2017. Netflix: global hegemon or facilitator of frictionless digital trade?. Journal of Cultural Economics, pp.1-27.
Barron, D., Gibbons, R., Gil, R. and Murphy, K.J., 2015. Reel Authority: Relational Adaptation in the Movie Industry. Northwestern University, mimeo.
Burroughs, B., 2018. House of Netflix: Streaming media and digital lore. Popular Communication, pp.1-17.
Chao, C.N., Hegarty, N. and Fray, I., 2016. Impact of Movie Streaming over Traditional DVD Movie Rental—An Empirical Study. Journal of Industrial and Intelligent Information Vol, 4(2).
Christensen, C.M., Raynor, M.E. and McDonald, R., 2016. What is disruptive Innovation. The Encyclopedia of Human-Computer Interaction, 2.
Drucker, P., 2014. Innovation and entrepreneurship. Routledge.
Escoffier, N. and McKelvey, B., 2014. Using ‘Crowd-wisdom strategy’to co-create market value: proof-of-concept from the movie industry (pp. 198-220). Cheltenham: Edward Elgar Publishing.
Escoffier, N. and McKelvey, B., 2015. The wisdom of crowds in the movie industry: Towards new solutions to reduce uncertainties. International Journal of Arts Management, 17(2), p.52.
Galindo, M.Á. and Méndez, M.T., 2014. Entrepreneurship, economic growth, and innovation: Are feedback effects at work?. Journal of Business Research, 67(5), pp.825-829.
Hiller, R.S., 2017. Profitably bundling information goods: Evidence from the evolving video library of Netflix. Journal of Media Economics, 30(2), pp.65-81.
Hyatt, A. and Johnson, D.K., 2016. Why Do You Like What You Like? The Impact of Previous Netflix User Ratings on Subsequent User Experience.
Johnston, M.W. and Marshall, G.W., 2016. Sales force management: Leadership, innovation, technology. Routledge.
McLuskie, P., 2017. Innovation and Entrepreneurship. International Journal of Entrepreneurial Behavior & Research, 23(1), pp.159-162.
Netflix.com. 2018. Netflix United Kingdom – Watch TV Programmes Online, Watch Films Online. [online] Available at: https://www.netflix.com/in/ [Accessed 9 Apr. 2018].
Ulker-Demirel, E., Akyol, A. and Gölba?? ?im?ek, G., 2018. Marketing and consumption of art products: The movie industry. Arts and the Market,, pp.23-80.
Vogel, H.L., 2014. Entertainment industry economics: A guide for financial analysis. Cambridge University Press.
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