I’ll admit that Netflix has been talked to death in business school. It’s got to be up there with Southwest and Apple as one of the most tired subjects to talk about. But this will not be about their business model transition from mail dvds to streaming; this post is all about their moves in the recent past and some of the less talked about strengths like original content, and specifically their international original content which has been making waves outside of the US. The company added 875,000 new subscribers in the US while overseas they added 4.45 million new subscribers to their consumer base. Their dedication to the foreign market has helped them combat their competitors in the US who have made deals limiting Netflix’s ability to get licensing for the same number of movies and tv shows at reasonable prices that they used to.
While a lot of people have pointed to critical flops like Bright in an effort to expose Netflix’s lacking quality, there are few that also acknowledge (or even know about) the amount of critical successes that the company has successfully invested in overseas. Shows like “Cable Girls” in Spain, “Marseille” in France, “3%” in Brazil, and “Dark” in Germany are all in a non-english language and demonstrate Netflix’s concerted efforts to crack foreign markets in a way that doesn’t involve simply redistributing english productions with subtitles. By creating original content that audiences abroad enjoy and demand, Netflix doesn’t have to cater so aggressively to American audiences and rely on their tastes alone. They additionally don’t have to pay exorbitant licensing fees in order to distribute their original foreign content, and as they become more attuned to their overseas audiences, they can make more originals which they will come back for. All the while they are learning more about their viewers across the globe.
On the technology side of the business, Netflix has made sure to be available to its customers at an almost absurd level. The provider has an availability rate of 99.97% due to the extreme measures they’ve taken to ensure that whatever improbable accident may occur, that their services will not be affected and content will be available to its consumers. Chaos engineering, is the affectionate term used by the company to reflect the ways which they test their system of using Amazon’s AWS data centers in 3 different regions for when one might be shut down; periodically they simulate a shut down and redirect traffic as a test of their fail-safe system (yes, I know, Amazon really does have its hands in everything, even its competitors). Netflix has also made sure to test its service across a wide swath of mobile devices from around the globe and in order to do this they have the operating equipment of 6 different cell towers in their headquarters so that they can effectively simulate the mobile and wifi conditions of places outside of the US…all so we get our TV when we want it.
Netflix has also taken obscenely meticulous steps to re-encode its library of videos to optimize streaming for better, more efficient playback. As a result, the company is allowing users with lower bandwidth to save data. While 4 GB of mobile data would get you 10 hours of Netflix now gets you 26 hours. Soon, the even more advanced video encoding of AV1 will be available and allow for even more efficient streaming capabilities.
It doesn’t stop there, the company has sneakily partnered with TV manufacturers to get their very own dedicated physical button onto the remote. This button may seem gimmicky but it accounts for a vast majority of the app launches as opposed to going through an external device running the Netflix application. Its visibility coupled with its ease of use contribute to the network’s occupation in the minds of consumers and the expectations of their TV user experience. Netflix is helping shape its physical existence by subtly making it a ubiquitous presence. This feature pairs quite nicely with the increased availability of TVs equipped for Wifi use straight out of the box and Netflix’s increased efforts to serve up original content which can be a replacement for cable offerings like “My Next Guest Needs No Introduction with David Letterman” and “The Joel McHale Show with Joel McHale.” Both of these show hosts saw major traction on cable television and have been coaxed into airing recurring new content for the Netflix. All of these aspects appeal to and cater immensely to the cord cutters of world who no longer want to deal with cable.
It’s crazy to think that Netflix started with the simple concept of mailing DVDs, but their progress isn’t as schizophrenic as some people like to believe. They are a tireless service provider with ambitions that are not restricted to the US market and not limited by budget constraints, but whether they can translate their successes into beating or even just competing with their contemporaries remains to be seen.