Netflix: The Reasons Behind its Success | Rome Business School (2024)

FAQs

Why did Netflix become so successful? ›

One of the reasons Netflix's engagement is so high is that it deploys numerous tools to coax a viewer to watch. And that's no small matter. There are more than 10,000 titles on Netflix and thousands more on other streaming services. Picking a show or movie is often tedious and frustrating.

Stacking its roster with exceptional performers maximizes Netflix's chance of success and also motivates, educates, and draws in even more talent. It's "the energy driver because everyone around you is amazing, you learn so much, you attract other amazing people," Hastings said.

Flexibility. The biggest advantage Netflix is giving to its customers that they can watch any content with convenience. They can watch content on-demand and on any screen they want. Netflix is making sure to give smooth experiences with personalized tastes.

Netflix founders Reed Hastings and Marc Randolph wanted to bring customer-centricity to the video rental market. At the time, renting videos was inconvenient and costly, with customers often plagued by expensive late fees. They created an entirely new way to watch movies and consume content.

With the popularity of the internet on the rise, Netflix began streaming its services in 2007. During that year, the number of Netflix subscribers jumped to 7.32 million from 6.15 million in 2006. Within three years, the company's focus moved from being a mail-order DVD company to an online streaming company.

Original Content Investment: One of the cornerstones of Netflix's content strategy is its substantial investment in original programming. By producing exclusive content, Netflix not only distinguishes itself from competitors but also establishes itself as a premier destination for high-quality entertainment.

Netflix's innovation strategy was designed to gain a competitive advantage by making Netflix's services widely accessible and offering an overall high-quality service. This was the strategic direction that Netflix took. The innovation process took time, it involved incremental and radical innovations.

The success of Netflix provides a reference experience for TV media struggling to transform [6]. According to Netflix, such an amazing user growth rate, Mainly due to the huge investment in original content, “Netflix's biggest competitiveness comes from its massive amount of original content.

What is Netflix business problem? ›

The streaming pioneer has been reeling under strained consumer spending, rising costs of financing production and increased competition from Disney+ and Amazon Prime. It had pinned its hopes on the launch of the ad-supported tier, but analysts say they have not seen a burst of subscriptions.

It is hard to overstate how much Blockbuster customers hated late fees, which could easily double or even trip the cost of the original rental, even if a movie was returned only a few days late. By eliminating fees, Netflix gained a concrete advantage it could use to attract customers.

Netflix, although unprofitable until the mid-2000s, survived the dot com bubble. The company offered DVDs via US Postal Service, and had put up their catalogue online. Relying on US Postal Service's delivery meant that Netflix could focus on their core offerings of a curated and personalised catalogue.

Finally, NetFlix improved on Blockbuster's lackluster service and outmoded pricing. Blockbuster charged $5 cost for each movie, and people especially hated the fees for late returns. So Hastings used a monthly subscription that allows unlimited rentals and no late fees.

Netflix has seen a substantial increase in its subscriber base over the years. In the first quarter of 2011, Netflix had approximately 22.8 million streaming subscribers in the United States. By the fourth quarter of 2018, this number had surged to over 58 million, showcasing a significant growth pattern.