Netflix: A Case of Transformation for the Digital Future

Origins: DVD-by-Mail Business Model

Netflix Classic Red Envelope (circa 2005)
Innovation — Disruption — Transformation Cycle for the DVD-By-Mail Era

Netflix 2.0 — Video Streaming

Cloud Plus Data and Analytics

AWS delivers cloud services for Netflix
Netflix — facebook Link
The layout — including the rows and columns — are personalized by Netflix
Netflix had data and analytics to mitigate risks

Netflix Illustrates The Digital Matrix in Action

  1. Embraced Streaming as Experimentation at the Edge in 2007. In 2007, few traditional media companies focused on video-streaming and it was at that time Netflix began experimenting with this technology. Although he demonstrated video-streaming in 2007 (as alternative to downloading of movies), Reed Hastings at Netflix believed that it wasn’t yet ready for primetime. He commented that: “The market is microscopic…DVD is going to be a very big market for a very long time.” Writing in the 2008 annual report, he noted: “In 2009, we will maintain our focus on improving our core services as well as gaining even greater traction with streaming.” At the end of 2011, Reed Hastings wrote in the CEO Letter: “ Our core strategy is to grow our streaming subscription business domestically and globally. We are continuously improving the customer experience, with a focus on expanding our streaming content, enhancing our user interface and extending our streaming service to even more Internet-connected devices….and that the DVD portion of our domestic service will be a fading differentiator to our streaming success.”
Netflix relies on AWS — a part of Amazon

Adaptation is Hard but Necessary

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N. Venkat Venkatraman

David J. McGrath Jr. Professor at Boston University Questrom School of Business; Author of The Digital Matrix: New Rules for Business Transformation…