Netflix: The Case Study

Netflix, a successful movie delivery firm, reached a detour when a film actress rating from its trusted data model contrasted with Hollywood. The ratings and comments were by an algorithm run carried out by high tech personnel and the other group in favor of their own, Hollywood. The analyst group insisted that Netflix should take the statistics from the observations into account. The observations made by the tech group implied that the actress’ presence in a poster was responsible for the low turnover of subscribers for the show she was starring (Ruiz-Navas, and Kumiko 12). Its links with Hollywood is one of the reasons why Netflix dependence on data models has wavered.

Relationship with Hollywood

Netflix being consumer-oriented has to make sure it satisfies its subscribers by presenting them with shows and programmes that a majority of the viewers prefer. The movie firm has to terminate its obsession with analyses that are produced by data models because of the mutual relationship that exists between Hollywood top producer and their trusted actors. Apparently, rifts and disagreements can arise if Netflix decides to go with what the algorithm states. Specific shows are at the verge of being put off because of low viewership, but such efforts have tampered with mutual social ties. A tug of war seems to exist between the data managers who are fixated with analyses and Hollywood which focuses on strengthening friendships.

Q1. What are some of the core capabilities of Netflix? Which capabilities are highlighted in the article? Discuss sustainability of these core capabilities using class material specifically discuss Durability and Imitability.

A1. Netflix as a popular company has multiple tangible and intangible resources. Its value has been resistant to fluctuations that a normal firm may experience. Over the years it has claimed the top position amongst competitors by engaging in healthy competition. Netflix has been amassing many subscribers across the world; today, it is an entertainment platform with the greatest number of subscribers (cook 32). It is evident that it upholds certain principles and applies strategies that make its operations world-class.

Netflix explores market possibilities and discovering market gaps; it came up with services such as a subscription which is online based that is easily accessible by consumers. They have also created a site that makes movie deliveries to their esteemed customers. The market gap they cracked was the over-dependence on theatre movies; fans now do not have to visit theatres to watch a recently released film because of this technology (Cook 32).

Competitive Nature

Netflix’s competitive nature can be openly seen through the initiation of certain programs and always introducing user-friendly elements. They develop features that are only available on their site. A good example is when the firm signed an agreement with electronic companies to allow customers receive all Netflix’s programmes through television sets that belonged to those companies, such a move clearly distinguishes it from other media houses like Disney that are also competing for subscribers (Cook 32). The chief executive officer of this conglomerate has acknowledged the existence of the tight rivalry and has put forward strategies to combat these threats.

Loyalty

From Miss Jane Fonda’s case, it is clear that Netflix is concerned about the relationships it fosters with various people in the entertainment industry. The fact that they would rather put up with shows that according to their analysts, ‘deserve to see the door to respect the existing ties,’ is proof that they uphold the principle of loyalty. They also focus on their public image before their consumers that is why they strive to deliver their best (Jenner 139).

Imitability

Netflix has been at the top of the industry’s game for a very long time. It has maintained this stance because of its originality and uniqueness; a strategy that is absent in other movie production firms. The features present in its site and the numerous services it provides to consumers are what makes it synonymous to a monopoly (Ramachandran, and Joe 1) because they are not available elsewhere. Competitors might lack resources to build systems that resemble Netflix's.

Durability

Netflix applies some strategies to keep their consumers glued to their content. The business model used by the company ensures that they never run out of material to distribute to their subscribers (Ramachandran, and Joe 1). They achieve this by putting out material whose interest or rather value, to the viewers, does not deteriorate; they have a durability aspect. Most people are likely to watch movies repeatedly than shows with current information like news. People became cynical with its decision to venture on TV news business because such content has a short lifespan (McDonald, and Daniel 44). The firm identifies and chooses the latest technology that promises durability (McDonald, and Daniel 44). The company itself is after long-term rewards that is why it focuses on movie reviews and data analytics to know the place of shows and their fan base.

Q2. Why are some of these core capabilities now being tampered with? Why is Netflix not applying these capabilities to the fullest extent? Why and how is this situation leading to conflict within the company?

A2. Regardless of Netflix’s successful reputation, some of its earlier principles and capabilities seem to be compromised. The reason for this lag may be attributed to the firm’s dependency on other sectors and a wide interconnected network. For instance, the consumer-oriented aspect is compromised because of its management's refusal to favor Hollywood's opinion over actual statistics provided by legitimate data models. This inability to have a common ground can stir up conflict among colleagues because they hold different views. The exit of some of Netflix’s algorithm team is a piece of evidence that this disagreement exists.

Q3. Why can’t the influence and power of stars be captured in algorithms like everything else? Why is Netflix unable to develop new algorithms to solve the problem at hand? Why can’t new algorithms just moderate other algorithms?

Q3. Why can’t the influence and power of stars be captured in algorithms like everything else? Why is Netflix unable to develop new algorithms to solve the problem at hand? Why can’t new algorithms just moderate other algorithms?

A3. Netflix value has been growing fast; its net worth is estimated to be high enough for it to take market risks (Cook 32). The media house has signed contracts with various actors and actresses in contrast mainstream industry that only produce new released movies and sequels. When Netflix adopted analytics its focus on demand by understanding consumers’ interests and preferences (Jenner 139). Netflix forms relationships with these individuals and Hollywood making it impossible to decline their offers even when their content is questionable. The firm took a business approach to run its operations to ensure that they attract a lot of viewers.

A3. New algorithms cannot be a possible solution for Netflix to reduce the negative feedback that hit people they occasionally strike deals with. Firstly, they took the step to try analytics and fully trusted it because of its accurate results. Developing another algorithm will not solve the problem as any data model would give fact (Jenner 139).

Conclusion

Netflix continuous success can be attributed to the business strategies that make it stand out from the rest. The firm unremittingly changes to accommodate new technology and also fit in the provision of consumer needs. It has collaborated with renowned firms in the entertainment industries like Hollywood. Although such relations can increase profits for it, some issues that come up from them place the firm in a compromising situation. In recent years it has sustained its position as the most sought-after video streaming platform because of its unique operations amidst other competitive companies. The company takes advantage of recent innovations to produce quality videos and other software services.

Works Cited

Cook, Camila Isabel. "Netflix: A stepping stone in the evolution of television." (2014). Print.

Jenner, Mareike. "‘Quality,' ‘Popular’and the Netflix Brand: Negotiating Taste." Netflix and the Re-invention of Television. Palgrave Macmillan, Cham, 2018. 139-160.

McDonald, Kevin, and Daniel Smith-Rowsey, eds. The Netflix effect: Technology and entertainment in the 21st century. Bloomsbury Publishing USA, 2016. Print.

Ramachandran, Shalini, and Joe Flint. "At Netflix, who wins when it’s Hollywood vs. the algorithm?" 10 Nov. 2018.

Ruiz-Navas, Santiago and Kumiko Miyazaki. “Adapting Technological Capabilities for World Digital Business: The Case of Netflix.” Management of Engineering and Technology(PICMET), 2017 Portland International Conference on. IEEE,2017.