Netflix is a company that has been in business for a few years now. I have been following NetFlix from many angles:
a. As a user of Netflix service as well as their competitors
b. As a technologist who tries to identify and learn from innovations by others
c. As a leader who tries to learn how other organizations work
One phrase I would not hesitate to use is ‘I Love Netflix’. Here is the background and the reasons why:
Background about Netflix and its competitors
Netflix provides its customers with the ability to watch movies from its library of movies in various languages. They do not have any physical store presence where customers can walk in and rent videos. They have a mail in service, which will ship the dvds of your choice that you select in your online account.
The nearest competitor in the US for Netflix are Blockbuster and RedBox.
Blockbuster is a giant, who has been in existence for over 10 years and has over 1000 physical locations, they have not been able to keep up with the competition and has filed for bankruptcy. I feel that the ‘disruptive’ nature of the Netflix business model has been one of the primary drivers for the bankrupty of Blockbuster.
RedBox has kiosks available in over 1000 locations in the US and specializes in latest movie rentals, while Netflix mostly has old movies only (ie. not any movie that is currently running in the theatres). In addition, another difference is that Netflix supply chain management uses a centralized model while RedBox follows a decentralized supply chain management model.
Netflix as a service provider
We signed up for Netflix about three years ago and started receiving their DVDs by mail. At that time it was an innovation and we were amazed at the way their DVDs were reaching us on time and how they managed to keep the costs so low. About two years ago, Netflix introduced movie streaming online and we were amazed at the high quality of their streaming. As time progressed, Netflix has enabled watching movies using additional devices such as Wii, Playstation, iPad, etc. They have also tied up with some TV manufacturers such as LG to allow a direct tie up without the need for any third party device to connect to online Netflix accounts.
Overall, what I see is an excellent initiative from Netflix’s side to provide high quality service.
Netflix as an Innovator
As mentioned earlier, Netflix continues to innovate with newer ideas to make digital media streaming experience as lively as possible for the users. The simplicity with which they have done their controls for devices such as Wii, the way in which they come up with personalization features to recommend movies that closely match our taste are just a few examples of how they innovate.
Netflix as an Organization
In the past year or so, I have read two presentations that came from Netflix, which impressed me a lot.
One of those is about the culture at Netflix. This is supposed to be a presentation that their Human Resources team shares with their staff. Though it is 140 slides long, I learnt a lot of new ideas from it. If they mean what they say here, they are one of handful of companies to watch for in the long run.
The second presentation is a more recent one where they talk about where Netflix is today and where they intend to be in the future.
The thing that I liked the most is their clarity in thought. They clearly say that they do not want to try and compete with firms like RedBox in trying to deliver the latest movies. Instead their focus is on becoming the biggest media library for movies that are not relatively new. This made me feel they follow the principles stressed by Al Ries in his book called ‘Focus’ where he recommends every one to focus on one item at a time – this is something very difficult to do, but very productive if followed right.
Based on these experiences, I believe Netflix has won my full marks as a good organization.
Do let me know if you have had any similar experience with any other organization or if you feel Netflix does not deserve this.