CENTRE FOR UNIVERSITY OF HERTFORDSHIRE PROGRAMMES

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Module Module
Title:
Product Innovation (International) Code:
MKT 3215

Assignment
Date: 1/10/2023
Title:
Student Information: (Do not include your name unless your tutor has told you to do so.)
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Syed Rohunaim Bin Syed Elias J21035888 ☒

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 Table Of Content

Introduction ........................................................................................................... 2
Netflix: Disrupting the Media Landscape - Strategies and Impact ...................... 2
Netflix's User-Centric Design and Personalization: Redefining the Streaming
Experience ............................................................................................................. 3
Netflix's Disruptive Impact: Transforming TV Networks, Cable Providers, and
Movie Theatres ..................................................................................................... 5
Netflix's Localization Efforts: Adapting to Diverse Cultures and Languages ..... 5
Netflix's Future: Emerging Technologies and Product Innovations ..................... 6
Reference............................................................................................................... 7

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 Introduction

Netflix was founded by Reed Hastings and Marc Randolph in 1997 as a DVD rental service
(Jain, 2017). It later expanded into a media-streaming giant, with a catalogue of original
content. Initially, customers could rent DVDs through the mail, but in 1999, Netflix
introduced an online subscription service (Jain, 2017). This allowed subscribers to choose
titles from its website and receive DVDs by mail. In 2007, the company partnered with
various consumer electronics manufacturers to offer unlimited streaming of movies and TV
shows directly to subscribers' homes over the internet. This propelled Netflix's growth
globally, with streaming available in over 190 countries by 2016. (Hosch, 2022)

Netflix revolutionized the entertainment industry by producing original content, starting with
"House of Cards" in 2013. It has since built an impressive library of original series and films
that have earned critical acclaim and a massive subscriber base exceeding 200 million in
2021. Some noteworthy Netflix originals include "Stranger Things," "The Crown,"
"Bridgerton," and the Academy Award-winning film "Roma." (Hosch, 2022) Despite its
streaming dominance, Netflix's DVD rental division remained profitable, reflecting its
transformation from a DVD rental company to a global entertainment powerhouse.

Netflix: Disrupting the Media Landscape - Strategies and Impact

One of the deliberate strategies Netflix implemented to become a major disruptive force in the
media industry is having an innovative business model. Netflix introduced a movie-rental
subscription in 1999 which at the time, started with renting DVDs by mail (Gaurav, 2023). The
impact was it disrupted the traditional brick-and-mortar video rental shop. Fast forward to
today, it has become the digital powerhouse that utterly changes the way people view
entertainment. In addition, consumers started consuming the content due to the low
subscription and accessibility that Netflix offered. (Alsin,2018) Customers no longer need to
wait in line just to visit the store, saving time. The convenience led to consumers consuming
Netflix content. Other than that, Netflix offers a few more advantages that disrupted the media

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industry at the time such as no late fees, a vast range of DVD libraries and most importantly
personalization. (Cezim, 2023) Netflix utilized algorithms to recommend movies to consumers
which boosts viewing time.

Not only that, the majority of Netflix content is also originally produced by them. Prominent
series such as Stranger Things and The Umbrella Academy are why Netflix managed to attract
more subscribers to consume the content (Cezim, 2023). This leaves Television Network no
choice but to be flexible and aggressive in hiring and keeping top talents or otherwise, they
would be left behind. Netflix also has changed the trend of people watching movies and TV
series. Nowadays, a trend called the Binge-Watching Trend has emerged which essentially
Netflix uploads a TV series in multiple episodes at once which leaves consumers with the
flexibility to watch whenever they prefer (Cezim, 2023). This has entirely disrupted the
broadcast and TV networks that are frequently uploaded only once a month which is a bit
inconvenient for the consumers to wait just to watch an episode.

Furthermore, the reason Netflix managed to stay ahead of the competition is by seizing
opportunity and seeing the demand of its target audience. According to Investopedia, 2021,
Netflix's decision to produce its content gives a competitive edge as it diminished its reliance
on external content providers which depicts its own USP. Netflix also has heavily invested in
quality streaming technology for smoother playback and user experience for various devices.
Though Netflix has an abundance of competitors such as Amazon TV, Disney Channel and
YouTube, it still managed to be at the top mainly due to three factors which are original content,
data-driven decision making and aggressive global expansion. (Investopedia, 2021)

Netflix's User-Centric Design and Personalization: Redefining the

Streaming Experience
Netflix's ability to customize the user experience is a key factor in its success. By allowing
users to tailor their content preferences, Netflix enhances the viewing experience. (Whatley,
2021) Upon sign-up, Netflix asks users to state their preferences and customizes the homepage
based on those answers. This stands in contrast to traditional TV networks, which usually

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broadcast based on a schedule with limited customization options. Viewers have little control
over what they watch, and recommendations are not tailored to individual preferences. These
differences are why Netflix has been so successful thus far. (Erica,2023; Everything,2023)

As stated on the Netflix Research website, personalization is the crucial aspect of providing a
tailored content experience to each member. This means that every user has access to a unique
selection of content based on their interests, which can aid in discovering new content in the
future. Their main goal is to provide millions of different products to cater to each member's
profile. Netflix employs various techniques in their personalization strategy, including ranking
suggested videos, organizing them into rows and pages, and presenting relevant artwork. To
achieve this level of customization, they use multiple algorithmic approaches to address the
specific needs of each member. For example, Netflix will determine the messages to send to
members to keep them informed and engaged.

Secondly, what sets Netflix apart from its competitors is the exceptional design of its user
interface (UX, 2023). The platform's careful use of the black, red, and white colour scheme
forges a positive experience and a recognizable brand identity. When it comes to design,
consistency is key to building trust and establishing familiarity among users. Netflix users
enjoy a familiar interface that exudes a sense of reliability and dependability. The use of the
same colour palette and design elements across the platform's various screens and devices
reinforces this sense of cohesion. (UX, 2023)

The iconic red colour, particularly the "Play" button, serves as a visual anchor that draws users'
attention to the primary action of watching content. This element acts as a psychological cue,
guiding users through their experience. Netflix's visually appealing design is more than just
aesthetics. It plays a significant role in enhancing user engagement and retention. The
platform's consistent and visually appealing UI design ensures that users are greeted with an
attractive and easily navigable interface every time they visit the platform. Netflix's UI design
reflects the importance of a unified visual identity. It is a strategic tool for building trust,
fostering familiarity, and ultimately delivering an exceptional user experience.
(www.linkedin.com, n.d.)

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Netflix's Disruptive Impact: Transforming TV Networks, Cable Providers,
and Movie Theatres
Netflix revolutionized the television industry through its creation of engaging original content,
utilization of user data to improve subscribers' experience, and allowing viewers to consume
content in their preferred ways. According to Mansa, 2022, this has led to a surge in cord-
cutting trends, with the largest pay-tv providers in the United States losing a record high of
approximately 2,215,000 net video subscribers in Q1 2023 compared to 1,850,000 in Q1 2022.
Insider Intelligence's study reveals that by the end of 2023, approximately only 65.1 million
United States citizens will have a traditional pay TV subscription. In the future, Netflix's
success may cause cable providers to offer a la carte channel options instead of bundled
packages (Mansa, 2022).

The advent of the Internet and other technological advancements have revolutionized the
business landscape, allowing smaller companies to challenge the dominance of major firms in
various industries. This shift has led to the emergence of new markets for audiovisual
products and has given rise to a new generation of consumers who are highly interested in
these offerings (Aliloupour, Nicole P., 2016). To capitalize on this trend, streaming services
like Netflix and Hulu have emerged, which do not require expensive infrastructure like cable
boxes or satellite dishes. This has significantly lowered the barriers to entry for new players
in the industry, triggering intense competition among distributors.

While some argue that economies of scale still pose obstacles to new entrants, digital
technology has boosted the efficiency of the supply chain and has given more bargaining
power to those who can nimbly adapt to new digital opportunities (Aliloupour, Nicole P.,
2016). This has enabled newer companies like Netflix and Hulu to flourish, while established
firms have had to adapt to new technological innovations to stay relevant and competitive.

Netflix's Localization Efforts: Adapting to Diverse Cultures and Languages

Netflix recognizes that exceptional content is only one piece of the puzzle when it comes to
their triumph. How users experience that content is equally crucial. Developing an intuitive,

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user-friendly, and localized User Interface UI that works across multiple devices and platforms
presents a significant obstacle. Adhering to diverse internationalization standards for platforms
like Apple iOS, Google Android, gaming consoles, and smart TVs where Netflix is available
only adds to the complexity. Furthermore, the localization of UI strings is a complex process
that necessitates collaboration between localization project managers and development teams.
This process becomes even more intricate when multiple features are concurrently developed
in separate Git branches. Furthermore, approval from third-party entities such as Apple can
cause further delays in deploying fixes or updates to UI strings. To address these challenges
and streamline the localization process, Netflix has introduced the "Global String Repository."
(Blog, 2017). This cutting-edge solution enables teams to store their localized string data and
access it in real time. Integrating the Global String Repository into Netflix's existing
localization pipeline has made the entire localization process seamless, ensuring that all
translations are immediately available for application integration.

Netflix's Future: Emerging Technologies and Product Innovations

Netflix has dedicated over twenty years to enhancing its service, incorporating artificial
intelligence to offer its users a superior experience. With AI integration, Netflix has made it
possible to tailor content for each user (Simplilearn (2022). The AI engine monitors
information flow and intervenes at predetermined moments to provide recommendations and
suggestions.

By analyzing viewing habits and interests, Netflix's AI generates personalized

recommendations. Users can customize their streaming experience and take charge of their
interactions since the system can compile and suggest content based on their preferences.
(Simplilearn (2022).

Netflix leverages viewer data extensively to inform its content strategy, making smart decisions
about show renewals and enhancing marketing efforts. Through careful collection and analysis
of user data, the streaming service delivers personalized content recommendations that drive
viewer engagement. Data-driven decision-making is at the heart of Netflix's content creation,
enabling the company to invest in genres and themes that align with subscriber preferences.
With an impressive 70% show renewal rate, Netflix can evaluate a program's performance

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based on viewership, retention, and engagement metrics, rather than relying on traditional TV
ratings (Inspirit Scholars, 2021). Additionally, the company uses data to tailor marketing
efforts, customize content, and even test different versions of programming, resulting in a more
engaging, personalized streaming experience for subscribers.

Reference
1) Whatley, T. (2021). How Netflix Creates Immersive Experiences with Exceptional
Design and UX. [online] CXL. Available at: https://cxl.com/blog/netflix-design/.
2) UX, E. (2023). The Power of Personalization in UX: Unveiling Netflix’s Success
Story. [online] Medium. Available at: https://bootcamp.uxdesign.cc/the-power-of-
personalization-in-ux-unveiling-netflixs-success-story-55a693dacbfb [Accessed 30
Sep. 2023].
3) www.linkedin.com. (n.d.). UX Case Study: Netflix. [online] Available at:
https://www.linkedin.com/pulse/ux-case-study-netflix-sana-jaffry/.

4) Blog, N.T. (2017). Localization Technologies at Netflix. [online] Medium. Available

at: https://netflixtechblog.com/localization-technologies-at-netflix-
d033e7b13cf?gi=d6a50782ef4a#:~:text=Global%20String%20Repository%20allows
%20isolation [Accessed 30 Sep. 2023].

5) Gaurav, K. (2023). The Netflix Effect: How Digital Transformation Changed the
Entertainment Industry Forever. | SAP Blogs. [online] blogs.sap.com. Available at:
https://blogs.sap.com/2023/03/14/the-netflix-effect-how-digital-transformation-
changed-the-entertainment-industry-
forever./#:~:text=To%20stay%20ahead%20of%20the.

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6) Jain, S. (2017). The Netflix Revolution - Part 1: History of Netflix. [online] VdoCipher
Blog. Available at: https://www.vdocipher.com/blog/2017/06/netflix-revolution-part-
1-history/.

7) https://www.facebook.com/VoyMediaAgency (2023). Netflix Marketing Strategy:

Disrupting the Entertainment Industry with Innovation and Personalization. [online]
voymedia.com. Available at: https://voymedia.com/netflix-marketing-strategy/.

8) Cezim, B. (2023). The Impact of Streaming Services on the Entertainment Industry.

[online] Digital Agency Network. Available at: https://digitalagencynetwork.com/the-
impact-of-streaming-services-on-the-entertainment-
industry/#:~:text=Streaming%20services%20have%20disrupted%20the.

9) Investopedia (2021). How Netflix Is Changing The TV Industry. [online] Investopedia.

Available at: https://www.investopedia.com/articles/investing/060815/how-netflix-
changing-tv-industry.asp.

10) Mansa, J. (2022). How Netflix Is Changing the TV Industry. [online] Investopedia.
Available at: https://www.investopedia.com/articles/investing/060815/how-netflix-
changing-tv-industry.asp#:~:text=1%20By%20creating%20compelling%20original.

11) Aliloupour, Nicole P., "The Impact of Technology on the Entertainment Distribution
Market: The Effects of Netflix and Hulu on Cable Revenue" (2016).

12) Hosch, W.L. (2022). Netflix, inc. | American Company. In: Encyclopedia Britannica.
[online] Available at: https://www.britannica.com/topic/Netflix-Inc.

13) Simplilearn (2022). Netflix Recommendations: How Netflix Uses AI, Data Science,
And ML | Simplilearn. [online] Simplilearn.com. Available at:
https://www.simplilearn.com/how-netflix-uses-ai-data-science-and-ml-article.

14) Inspirit Scholars. (2021). How Artificial Intelligence Made Netflix What It Is Today &
How It Can Make the World a Better Place Tomorrow. [online] Available at:
https://www.inspiritscholars.com/blog/how-artificial-intelligence-made-netflix-what-
it-is-today-how-it-can-make-the-world-a-better-place-tomorro

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