The Birth of NetflixCreation

Reed Hastings started Netflix in 1997

Idea came from $40 late fee from a video rental

The heart of the idea: a mail based movie rental business

Trial Run

Reed bought several CDs and mailed them to himself

Result: (1) It only took 24 hours before they arrived; (2) DVDs came in perfect condition

The Birth of NetflixBeginning

Hastings launched a subscription service with a free trial in 1999

Only 20% of free trial users did not convert to paid service

Success

In 2003, Netflix recorded profit and reached 1 million subscribers

At this point, Hastings knew Netflix was successful

The Birth of NetflixThe Second Wave

In 2008 Netflix offered instant online streaming of TV shows and movies

Brought streaming capabilities to people via blu-ray players, game consoles, and internet site.

Comprehensive Video

The following video highlights Reed Hastings and his idea of Netflix

Since its founding…• How many global members does Netflix have?

Answer: nearly 70 million

• How many countries is Netflix in?

Answer: over 60

• What is Netflix’s approximate market cap?

Answer: $53.61 billion

• How many hours per day do users watch Netflix?

Answer: Over 100 million hours

Why people use Netflix

Affordability

Multiple subscription plans

Multiple platforms to access

(Apple TV, Xbox, PS4, Wii)

Why people use Netflix

Library of content

Learns people’s preferences

Simplicity and ease of use

Why people use Netflix

Word of mouth → compatibility with existing

values

Social norms and sense of identity

Autonomy given to user

How people use Netflix

Framework provided by technology:

Users can access relevant content when and where they want it

What does this look like?

Feelings before/after…

Time of day…

Device(s)…

Netflix: Individual or Community Oriented?

Individual

A separate digital dimension

Unique user profile

Catered to individual’s preferences

Available on-demand in virtually any context

Social

Access to content watched by masses

A means of socializing

Integration of Netflix and Facebook: Click here

Cultural HabitsNetflix and Chill

• A slang term that started on Twitter in 2007

• Ex: “Can’t wait to leave work so I can Netflix and Chill”

• Meaning now varies depending on generation

• Possible meanings:

• (1) Simply watching Netflix/relaxing; (2) “hooking up”

• Part of mainstream vocabulary; example of technological determinism

• CEO Reed Hastings on the term: Click here

Cultural HabitsBinge Watching

• “Consuming an entire TV series at once, rather than weekly”

• Result of content that is released “all at once” instead of in segments

• 61% of Netflix users binge watch shows at least every few weeks

Why does Binge Watching occur?

• Cliffhangers activate stress

• Completing an episode triggers serotonin and dopamine

• Strategic length of shows: 20 or 40 minutes

• Netflix makes people happy

Cultural HabitsThe Netflix Switch

• A prototype device created by Netflix engineers

• Purpose is to streamline people’s Netflix viewing experience

When activated, it…

• Dims the lights

• Switches nearby phones to silent

• Orders takeout

• Turns on Netflix

Watch a short video here; Explore the switch here

Netflix and Traditional TV

Netflix and Streaming

• Greater viewer flexibility and autonomy

• Dependent on Internet

• No primetime network competition

• No commercials

• Personalized suggestions

• Watch on a variety of mediums

Traditional Television

• Predetermined programming

• Less viewing autonomy

• No Internet needed

• Primetime network competition

• Commercials

• Standardized listings

Click: The nature of streaming

Cord Cutting: A Noticeable Trend

Patterns of viewers cancelling subscription TV services for over-the-Internet subscription services

Cord Cutting

• What % of U.S. households subscribe to Netflix, Hulu Plus, or Amazon Prime as of 2014?

• What % of U.S. households have at least one TV connected to the Internet as of 2014?

Answer: 49%

Answer: 47%

Netflix and Identity

• First, click this to understand the highly personalized nature of Netflix

Netflix is an extension of our:

• Likes and dislikes

• Values

• Temperaments

• Opinions

• The type of media you consume indicates an aspect of your identity

• Netflix identity can be true, intentionally created, or both

Netflix and CommunicationWorld Brain

• Netflix is a vast library of content

• Algorithms make content come “alive”

• Similar to the layer of consciousness surrounding world’s information

Filter Bubble

• The more you use Netflix, the more it caters content to you

• Netflix creates a virtual identity around your behavior

Social Construction of NetflixThree Major Shifts of Netflix

If Netflix never evolved, it would not exist today

Each evolution of Netflix has been driven by a changing social dynamic

DVD rental by mail disrupted traditional movie rental companies like Blockbuster

TV show and movie streaming responded to consumers’ desire for autonomy and convenience

Netflix Original Series and other content is directly related to customer input and popularity

How does Netflix choose what’s on?

• Incorrect framework: Netflix is a “broad distributor” of content

• Correct framework: Netflix is an “expert programmer.” What’s on Netflix is what people watch the most of. In a way, users produce content

• Viewership/popularity of titles weighed against cost of licensing them

• Watch this video

Netflix Original Content

Netflix has produced a wide range of original content:

Examples: TV specials, series, movies, documentaries

Netflix originals cover popular topics:

Examples: politics, race, sexual orientation, drugs, and more

Netflix Original Content

• Identity shift: Netflix is assuming the role of a TV network

• Nearly 90% of Netflix members have engaged with Netflix original content

• 45 Emmy nominations to date

THE END