G4-Netflix - Change of Netflix - Tài liệu tham khảo | Đại học Hoa Sen

HOA SEN UNIVERSITY
FACULTY OF INTERNATIONAL LANGUAGES AND CULTURES
COURSE NAME : CHANGE MANAGEMENT Group Project Topic
NETFLIX CHANGE PROGRAM AND RESULT
Instructor: Nguyễễn Ph c T ướ uy Hà In charge:
Trầần Lai Thanh – 22012493
Trầần B o Khánh Linh – 2180 ả 866
Cao Nguyễễn Khánh Vy – 22014525
Hoàng Th Mai Duyễn – 22014497 ị
Trầần Lai Linh – 22011190 Lu Ting Yi – 22014468
Ho Chi Minh City – December, 10, 2022 Table of Content 1.
Introduction about Netflix:.......................................................................................................4 2.
Change context:........................................................................................................................4 2.1.
PESTLE: ( External )............................................................................................................4 2.2.
Internal:............................................................................................................................4 3.
Change program:.......................................................................................................................5 4.
Change model of Netflix:...........................................................................................................6 5.
The result:.................................................................................................................................8 6.
Why Netflix succeed:...............................................................................................................10
REFERENCE:....................................................................................................................................11 LIST OF IMAGES
Figure 1: DVDs consumption................................................................................... 8
Figure 2: Netflix global revenue............................................................................. 10
Figure 3: Netflix subscribers over the years...........................................................11
1. Introduction about Netflix:
Reed Hastings had collaborated with Marc Randolph in order to establish the
business in 1997 and up until 1999 Netflix changed to DVDs rental online, it means
that the customer just only needs to choose what they need and the goods will be
sent through mail to their places. In May 2002, Netflix went public with 15$ per
share. And at the same time they offered night delivery service. In 2003, Netflix
finally became profitable acrost 1 million subscribers. In 2004 Netflix stated that they
wanted to change their old service into a streaming service in 2005. Unlucky co-
founder Mark Randolph was no longer with the company, the program didn't launch
until 2007. The aim of the program is streaming content, delivering directly to TVs,
computers, and tablets through its Watch Now service. They then expanded beyond
the United States by launching it streaming from to Canada in 2010. By the of 2011,
the company decided to separate their two services which are, DVD rental and
streaming online, however, the customer seemed to unsatisfy about it so Netflix had
to eliminate that plan. A year later, they then had their own shows and content. The
first show they made was Lilyhammer. Next, in 2013, House of Cards was released.
Up until now, they have more than 1,900 original content and one of them has
received many awards such as The Crown. By 2016, the company stated that over
190 territories and countries are now having their streaming service. And until 2021,
they had become the most popular streaming online service. 2. Change context:
2.1. PESTLE: ( External ) Technology:
In 2006, people were able to adopt the availability of high speed internet and
portable computers capable of streaming media.
Technological advancement, automation, technical, awareness plays an
important role in the decision of change management of Netflix in that time.
Social: People globally pay more attention to use social media in many views as education, entertainment,..
Netflix had noticed the upcoming market demand. 2.2. Internal:
The Ceo of Netflix Reed Hastings has long seen the potential of streaming. In
2000, the CEO of Netflix, flew to Dallas to suggest a partnership to Blockbuster
CEO. Netflix would run Blockbuster’s brand online and Antioco’s firm would
promote Netflix in its stores.
=> But this idea was quickly rejected. However, this story shows that this CEO has
long seen the potential of streaming.
In 2006, the industrial revolution took place strongly. We can see that through
appearance of many website and special event:
o Google acquired YouTube in 2006.
o The birth of new social networks like Twitter in March and Facebook in September.
o In this year, most people still use their mobile phones as phones and the
big deal is being able to replace their landline phones with this technology.
73% of adults use mobile phones.
=> This is a special year with many changes in technology as well as the birth of many websites.
Netflix decided to change because it wanted to work on its business model
and reduce obstacles to accessing entertainment content.
The reason for Netflix's shift to streaming is that very few people see the value
of pursuing streaming video => less competition.
People start to figure out how to download and upload movies to the internet.
Netflix was aware of what was going on- they knew the change was imminent.
This is a suitable time to change as they want to be before.
Netflix foresaw that delivering content over the Internet was much more
efficient, far-researching, scalable and less costly.
=> That is why in 2007, Reed Hastings decided to launch the company's online
streaming service from an online DVD rental platform to online streaming service. 3. Change program:
Reed Hastings has turned Netflix into one of the companies that dominate the
Internet. From humble beginnings in what was once the headquarters of a bank, the
company has now grown to more than 5,000 employees globally. On January 16,
2007, Netflix launched a new service - streaming video directly to viewers' personal
computers. For the first time in the television industry's 100-year history, customers
can choose what they want to watch and enjoy at any time. Netflix officially usurped
the rights of media and television corporations and handed them over to individuals.
It started in 2008, when Netflix found a "backdoor" to add 2,500 titles, TV shows, and
musicals from Sony and Disney themselves to its streaming list - which competitors
didn't know. Netflix acquired the streaming rights to these shows from pay-TV
channel Starz, which was also building its own streaming service at the time, under
the name Vongo, but failed. Thanks to this contract, a series of blockbuster titles such
as Spider-Man 3, Ratatouille, Pirates of the Caribbean 3, No Country for Old Men ...
are available on Netflix. At that time, even though Netflix had 12,000 different
choices of movies and TV shows for users, most of those titles came from foreign
countries or independent studios, which were rarely known. known by users.
In 2008, Netflix rebuilt its application functions inside a cloud-native development
environment, then developed applications for business operations. The big, bloated
Netflix service of 2008 has been refactored into microservices and into unstructured
scalable data. Using a cloud-based database, Netflix can pay as much as they want,
which is a form of payment that helps them save maximum costs every time they
create features based on AI to make personalized recommendations to users.
In 2011, Netflix fell into a serious crisis when it separated its DVD rental and movie
streaming businesses. Before that, within 4 years, the internal turmoil between
Hastings and many of its senior leaders caused Netflix to lose a series of dedicated
and capable personnel, who were "public servants" who contributed to building the
empire. Netflix from day one. Its stock price fell 77%, losing 800,000 users.
In October 2011, after 3 weeks of launch, Hastings had to close Qwikster - a DVD
rental subsidiary of Netflix. Hastings also posted a short blog post aimed at quelling
the rising outrage of users shortly after the appearance of a clumsy promotional clip for Qwikster.
Things were brighter when Netflix decided to expand its investment into the
production of exclusive TV shows and movies.
In 2013, the 13-episode Netflix series "House of Cards" was nominated for 9 Emmy
Awards and won 3. What's more, this is the TV series with the highest viewership
ratings in the US up to the present time. In 2013, Netflix began to enter the Games
field through licensing the adaptation of Stranger Things or The Dark Crystal series to
Games development companies. In addition, Netflix has also produced a series of
interactive movies directly with viewers such as Black Mirror: Bandersnatch,
Unbreakable Kimmy Schmidt: Kimmy Vs The Reverend, allowing viewers to choose
the actions of the characters in the movie. , bringing a whole new cinematic experience to Netflix fans.
Since 2016, Netflix is present in 190 countries, including Vietnam. Currently, Netflix
owns 151 million subscribers worldwide and on October 16 officially launched the Vietnamese interface.
In 2021, Netflix was honored with 42 Golden Globe Award nominations for 22 movies
and 20 shows. Netflix has an advantage in hand with more than 200 million
registered subscribers to use the service globally, and it is impossible to miss the
opportunity to participate in the extremely exciting and potential gaming market. In
early 2021, Bloomberg and The Information reported a lot about the event that
Netflix will soon return to the "race" of the Games segment with the goal of
providing high-end game service packages like Xbox Game Pass or Apple Arcade.
4. Change model of Netflix: ● Unfreezing:
Netflix began as a mail-order DVD service. Throughout those years, Netflix has rolled
out new subscription features to DVD rental customers, and this new service allows
customers to rent unlimited DVDs. Thanks to this success, the company launched its
official website with subscribers being able to choose from movie and video titles.
Things didn’t go well with Netflix at some point. It had to lay off two-thirds of its
employees to stay afloat. Finally, after all, the subscriptions were up again, and Netflix
understood that it would be a great idea to distribute the video directly on the
network. Although the internet speed at the time was too slow to stream high quality
content. Again, they were thinking of renewing their product distribution, although at
the time they were still renting out a lot of DVDs, which was their main source of
income. When sales of CDs and DVDs begin to rapidly decline, that usually marks the
end of any company that depends on it, but Netflix is thinking ahead enough as usual
and services On-demand video allows the company to continue to grow. Figure 1: DVDs consumption ● Moving:
In 2007, Netflix added more competitive pressure when it announced the launch of a
streaming service called “Watch Now”. At the time, the streaming service was
intended to be used only by proficient users with an internet connection, which was
uncommon at the time. Netflix started its video streaming service with a slow
approach. In September 2007, the company gradually scaled up its service offering
instead of rolling it out to all users at once. Netflix made the new service available to
all customers in January 2007. Netflix upgraded its technical infrastructure by
optimizing for the cloud along with a slow and steady approach that has helped
Netflix keep it. It’s a pioneering advantage. Netflix, relying on a solid engineering and
content team, has managed to maintain its competitive edge since the launch of its video streaming service. ● Refreezing:
Netflix has expanded into internet video on demand. What they offer is a
revolutionary new way of watching TV. Improvements in streaming technology and
increased use of handheld devices have helped grow Netflix, as well as the platform’s
vast library of movies and TV shows. Netflix is also the first company to offer their
content on all devices, including PCs, phones, tablets, TVs, etc. But there is a problem
that there is not any content in the original version. Netflix rights. That means the
company not only pays the network for each episode, but there’s no guarantee that
they’ll be able to keep the copyrights forever. The solution they came up with was to
switch from streaming TV to producing it on their own. Netflix started investing in
series and movie production by acquiring in-house or independent creators. Netflix
has introduced some new improvements to match the value proposition block using
the video recommendation algorithm. This algorithm is very good and tries to come
up with a recommendation of a new video show you will like based on many criteria.
In addition, Netflix will broadcast all seasons of the original show at once without
having to wait. Netflix doesn’t rely on ads to make money compared to traditional TV
channels so they don’t have to, and for Netflix subscribers, the advantage is that they
can comfortably watch all the seasons they want without having to wait. There are
some business actors from the traditional model that worry that it is slowly changing
TV viewers from linear TV to video on demand. Furthermore, by taking advantage of
competition and organizational change, Netflix is able to launch offline playback
features to store content and deliver high-quality archival content without interruption. 5. The result:
The company was among the very first to see the potential of video streaming
technology and began transitioning toward a subscription video-on-demand strategy
in 2007. Since this adjustment, Netflix's revenue has surged more than ten times.
more than 29.7 billion in 2021, up from 1.67 billion in 2007.
Figure 2: Netflix global revenue
In the last few years, the company has been very successful. They not only lead the
streaming market in the U.S but also effectively expand its service outside North
America. In 2010, the company offered the streaming-only service in Canada. To
expand the plan, in 2011, the plan was introduced to Latin America and the
Caribbean. In 2012, the United Kingdom, Ireland, and Scandinavia all received the
streaming-only plan from Netflix as they expanded outside of the United States.
More than 190 nations and territories would have access to its streaming service by 2021.
Until 2013, Netflix had launched its first three original series named House of Cards,
Hemlock Grove and Orange is the New Black. Those contents are seen as a major
focus of Netflix, to sum up to the end of 2021 the company offered more than 2,400
original titles. Along with building a sizable subscribers base globally, the company
has also succeeded in creating and distributing popular original series like House of
Cards and Orange is the New Black, upsetting established TV networks like HBO and CBS.
Only 20% of consumers when it first came out in 1999 chose against purchasing a
Netflix subscription after using the free trial. Just over 5 million people were Netflix
subscribers as of 2005.. But in 2021, with more than 200 million subscribers, their
streaming services became the biggest revenue generator.
Figure 3: Netflix subscribers over the years
The world's most widely used subscription-based video streaming service, Netflix,
appears to be performing extraordinarily well in both areas, including the game. In
addition to concentrating on expanding their consumer base, the business also
succeeds in keeping its subscribers satisfied. They outperform their rivals in every
important facet of their service business, according to a new Forrester poll of
American users of video streaming services.
By far, Netflix is still the company hard to beat. In the United States, 85% of
respondents who pay for digital video content said they pay for a Netflix
membership, according to Statista's Global Consumer Survey. Amazon Prime was the
next-closest service, lagging Netflix by a significant 20%.
Achieved: In 2021, 129 Netflix original shows were nominated for Emmy Awards,
more than three times as many as were nominated in 2016. 6. Why Netflix succeed:
Reed Hasting noticed that Apple with the launch of AppleTV had used a similar idea
to the one he had and he found it to be too limiting. With the rise of YouTube and
some other limited video sites in 2005 & 2006, he realized that internet streaming was truly the future.