Report Example on Netflix: Navigating Self-Disruption, Global Expansion, and Cultural Adaptation

1. Netflix’s View of Their Business

Netflix’s view of their business is not myopic, instead, they have a real point of view and they know where they want to go (Levitt, 2004). The company’s evolutionary journey is a testament to its visionary business sustainability goal.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

Created in 1997 by Reed Hastings, the company has reinvented itself several times already. The SVoD giant, adept at self-disruption, cultivates the art of never rewinding. Netflix’s story began in 1997, a year before the creation of Google. At a time when the Internet was starting to settle in homes and when the DVD was about to become obsolete for good, Netflix began to offer a new service in the United States: the rental and online purchase of DVDs delivered to customers’ homes, quickly supplemented by a monthly subscription offer (Au-Yong-Oliveira et al., 2020). This innovation, both marketing, and sales, established what made Netflix's trademark: a natural appetite for innovation daring an understanding of user needs, and a fierce desire to retain its community (Gomez-Uribe & Hunt, 2015).

For Netflix, cultivating your difference means constantly competing against itself and venturing into strategic choices that are sometimes counterproductive or risky at first glance. The development of Netflix is intended as a virtuous circle: internationalize its offer permanently, adapt to each new target territory, and test new creations in other countries to make all original productions profitable. To make its approach credible and to offer itself legitimacy with historical actors in the film and television sector, Netflix is setting up partnerships and attracting both big popular names and figures from the independent scene. This provides a permanent balance to appeal to the general public and the critical sphere.

Daring to Self-disrupt

Netflix's innovation in streaming is based on a simple principle: a subscription offer, which allows users to watch works without advertising, unlimited, and without commitment. Little by little, the company expanded its catalog and captured an ever wider audience. In 2009, the association of the words "Netflix" and "chill" appeared on social networks (which could be translated as "to relax", "to settle down"), which became a real leitmotif among all fans of the service. SVoD and binge-watching (a practice that consists of watching episodes of series in large quantities and without stopping) added to the company’s competitive strategy.

The slogan “See what's next”, unveiled in 2014 and designed with the Gretel agency, formalized this practice born with “streamed” music - Deezer and Spotify were created in 2007 and 2006 respectively. Indeed, Netflix very quickly understood the interest of offering direct access to an entire season of a series rather than opting for an episode-by-episode broadcast mode, dear to the world of classic television. This choice was made in 2013, at the time of the broadcast on the platform of "House of Cards", the very first series stamped Netflix Original, the second great revolution of the firm.

The reality behind the name "Netflix Original" is more complex, however, because the firm tends to consider much of the content on its platform as original productions. Its content is either purchased or produced from A to Z, or the company has exclusive broadcasting rights in a given region. For instance, in the case of Bodyguard, the late-2018 British hitbox, the series was produced by ITV and originally aired on the BBC. However, since Netflix acquired the rights to broadcast internationally and the group was involved in the development of the script, Bodyguard was presented in 189 countries (excluding the UK) as a Netflix Original. This approach represents another clever way to promote its catalog and in the process impose a sound design (the now-famous "tou doum") that accompanies the logo at the launch of all content labeled "Netflix Original". To constantly offer new content, Netflix does not skimp on the means. In 2018, the company invested 12 billion dollars solely in the production and purchase of content.

Exclusive Originality

The Netflix Original label was popularized from this first appearance and the brand's grip would quickly accelerate thanks to the big-budget production bringing together stars of the caliber of Kevin Spacey and Robin Wright in a breathtaking show, which renewed the political thriller in line with the cult series broadcast until then by HBO or NBC. Before that, the platform offered works with periods of exclusivity, but no 100% unique content that couldn't be found elsewhere.

This shift from broadcaster to producer consolidates the legitimacy of the brand, both among creators and the public. Science fiction, comedy, drama, detective or thriller, stand-up, film, cartoon, talk show, show, documentary or series, Netflix does not forbid any subject, no format and attracts not only in its bulimia of productions box office kings (comedian Adam Sandler, director Martin Scorsese, in particular) but also figures from the indie scene (Bong Joon-ho, Noah Baumbach, etc.).

In addition to a catalog fed by numerous partnerships and licenses, the leader of SVoD announced at the end of 2018 that it would offer no less than 1,000 Netflix Original series and films, becoming the most prolific studio in the world. The company views itself as a true audiovisual giant which, despite increasingly strong competition (Amazon Prime Video, Hulu, Disney +), can boast of being firmly anchored in the imagination of Internet users around the world, accustomed and encouraged to "see what happens next ”and discover new stories. According to the adage, an abundance of goods does not harm the SVoD market. Netflix quickly stood out from its competitors (Amazon Prime Video, Hulu, HBO, etc.) by continuously enriching its catalog.

Far from considering itself as a simple provider of reliable service (and aided by a relevant algorithm analyzing user preferences), Netflix continues to apply the rule that has been its strength since its inception: always reinvent itself by taking the risk of destroying what has been done so far. From an online DVD subscription, the company embarked on streaming. From streaming, the company decided to become a producer and dared to impose itself on a ground guarded by formidable historical adversaries such as Warner Bros., and Universal Pictures among others.

From the US to Canada, Germany to Italy, and India to the Middle East, the entity plays the audiovisual apprentice witch, performs broadcast tests, makes its productions profitable, and breaks down clichés and preconceived ideas about expectations and the supposed reluctance of "viewers". The company’s strategy, despite the potential hazards of the next technological or economic revolutions, allows the brand to assert itself at present. Regardless of future scenarios, it is likely that the name "Netflix" will forever be engraved in the minds of Internet users, just like Google.

2. Product Offered by Netflix

Netflix offers its subscribers the experience of enjoying TV shows, series, and movies instantly and unlimitedly through Internet streaming on their televisions, computers, and mobile devices for a fixed monthly price. The association between Reed Hastings and Marc Randolph (who left the company in 2004) had met the company's goals of becoming the number 1 player in online movie rental in the United States, thus offering itself the luxury of digging the future grave of physical stores, like those of the blockbuster chain which tried to buy Netflix, without success. Although displaying a catalog of nearly 5,000 references and the impressive figure of one million DVDs sent per day in 2005, the company challenged itself to explore a new market in parallel: that of streaming.

Ten years after its creation, Netflix operationalized its first revolution. At first, the company imagined marketing a box for American households, but ultimately its strategy was to turn towards the video-on-demand service by subscription (SVoD), intrigued by the growing influence of the YouTube platform launched two years earlier (Wayne & Castro, 2020). The company has key strengths such as its brand, the strength of its capacity in original productions, the development of its AWS architecture, and its personalized customer service, among the most important. An important aspect of Netflix’s product is the “first-mover advantage” (Peng 2010) and based on this, the market position is based on a large number of subscribers. Another important aspect is "differentiation". The intangibles that Netflix has are the most important barrier that its competitors will have to overcome, among them being the image of the brand.

3. How Netflix Can Adapt its Advertising to Reflect Different Cultures when Targeting Canada’s Growing Ethnic Population

Internationalization has been key to the success of the vast majority of technology companies. As Louis Brennan, a professor at Trinity Business School in Harvard Business Review, explained, Netflix’s internationalization strategy was especially remarkable, given its business model (Brennan, 2018). Until 2010, the streaming platform for series, films, and documentaries had only operated in the US. After five years, the company was present in 50 countries. In 2018, it had expanded to 190 countries. In Brennan’s opinion, Netflix’s success is due to two strategic decisions from which any company looking to go international can learn. These are: Not entering all markets at once and creating differentiated alliances in each market. In Brennan’s view, the exponential globalization, where the expansion cycle is carefully orchestrated and implemented at an ever-increasing speed to many customers in diversified countries, is very significant. Netflix did not expand to many countries at once. Instead, the company went little by little, carefully choosing the countries that were easiest to enter first. Its first international market was Canada, a country it reached in 2010, the closest in every way to the United States (Davis & Zboralska, 2017). In this way, Netflix was able to develop its internationalization capabilities in places where the challenges were less. By so doing, it learned how to expand and improve its core capabilities beyond its local market in the US. While this is a normal strategy, Netflix’s implementation of its second phase of expansion stood out. The company used its experiences and lessons gained in the process to develop its expansion capabilities into diverse markets in just a few years. The company chose 50 markets for its second phase of expansion, first, because of their attractiveness, and also because the countries had similar regulations and publics, as well as good connectivity.

In the third phase, Netflix stormed into 140 countries, reaching 190 in 2018. Three years after starting its streaming adventure in the US, the brand launched its service in neighboring Canada. This first excursion outside its borders quickly attracted others. In 2011, Netflix landed in Latin America and the Caribbean. The following year, the European market was targeted, starting with the United Kingdom, Ireland, and the Nordic countries. In 2013, it was the turn of the Netherlands, followed by Germany, Austria, Belgium, France, Luxembourg, and Switzerland (2014), followed by Australia, New Zealand, Italy, Spain, Japan, and Portugal (2015) (Wayne et al., 2020). In 2016, less than ten years after the first readings on its platform, Netflix was available almost worldwide. Currently, the company is present in 190 culturally diverse countries.