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Netflix's Key to Success

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Stephen Rumsey

on 4 May 2014

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Transcript of Netflix's Key to Success

Value Discipline
There are 3 Value Disciplines

Operational Excellence
Product Leadership
Customer Intimacy
Future has Keys to Successes
With the customer focus that builds customer loyalty, Netflix will continue to change the streaming market as it grows in market value.

chose Customer Intimacy
Exceptional Value to the customer

Giving a positive Customer experience

- Ordering movies via WEB
- Huge DVD selection of Movies/TV Shows
- Streaming Movies to multiple devices
Leverages Technology that Builds Customer
Past Technology
Understanding individuals customers taste
Quick delivery of DVDs
NetFlix EcoSystem
Hollywood and Streaming
Cloud Service Companies
Future Challenges
Government and ISP Policies
Infrastructure of Internet backbone
Technology Cost
Key to Success


Masters, Joe. "How Netflix Is Ruining Cloud Computing - InformationWeek."
InformationWeek. InformationWeek, n.d. Web. 27 Apr. 2014.

Butler, Brandon. "Why Netflix Is One of the Most Important Cloud Computing
Companies." Network World. N.p., n.d. Web. 27 Apr. 2014.

Koszewnik, Drew. "The Netflix Tech Blog: NetflixGraph Metadata Library: An
Optimization Case Study." The Netflix Tech Blog: NetflixGraph
Metadata Library: An Optimization Case Study. N.p., n.d. Web. 27 Apr. 2014.

According to Michael Treacy and Fred Wiersema
A company should excel with one discipline
According to Michael Treacy and Fred Wiersema
From Harvard Business Review
Netflix is able bring company value by supplying customer satisfaction and leveraging the long tail of Movies and TV Shows.
Understanding individual customer's taste

Collaborative Filtering by costumers rating films they watch

Building movie and TV shows genre information database (db)

Cross-referencing both db to determine individual tastes
Quick Delivery of DVD

Warehouses are distributed across the country
DVD inventory db for each warehouse is maintained
When a DVD is not available Netflix is able to suggest another that is suited to the customer
Current Technology

Leveraging Customer MetaData
Streaming videos

Netflix Leverages Today's Technology to Mine Their Metadata

Holds one of the largest db warehouses of customer preferences
Industry proven data mining technology to build on customer taste
Leverage the Amazon’s Storage Service (S3) to minimize cost

Streaming Videos

Multiple Device Types:
iPhone, Android, Smart TV, Game Console, etc...

Same experience across all devices

Independent of ISP Type: Cellar, Cable, DSL

Customer Loyalty is Built on

Understanding the individual customers taste
Delivering services quickly
Maintaining customer experience
Keeping cost down for the customer

Hollywood and Streaming

Hollywood Studios have the ability to lease out old movies and gain on the long tail.
Build bigger communities for niche markets
New studios gain by producing new shows for Netflix
Cloud Services Companies and Netflix

Amazons Web Services (AWS)
Netflix is setting standards for cloud base services (ie OSS) that other companies take advantage in using
Netflix is leading the way for Cloud Computing 2.0 by embracing multi-cloud architectures
Government and ISP Policies

Internet Neutrality has been dissolved
ISPs can charge Netflix for customers to have access to their streaming services
This gives ISPs more control over streaming providers
Infrastructure of the Internet

One third of internet traffic is due to Netflix streaming
As competitors come on broad the internet back bone will be stressed
Technology Cost and Competitors

As technology cost drops, it will become easier for competitors to enter the market

HBO and Showtime have established relationships with ISPs and Hollywood Studios. They also have the eagerness to compete in the streaming market
Presentation By Stephen Rumsey


Course: MBA 861

Instructor: Dr. Jason Thatcher
Full transcript