Netflix has been a big winner with the advancement of digital technologies. To date, they have amassed an astounding 117.6 million international subscribers in nearly 200 countries around the world. This success has come from primarily three reasons: 1) advancements in streaming capabilities accelerated in line or better than expected as Netflix transitioned to a primarily streaming service; 2) the proliferation of mobile phones and tablets as well as the introduction of smart televisions allowed Netflix to be available to its customers at all times; and 3) the change in viewing tastes because of the first two greatly enhanced Netflix’s value proposition.
The first company to think about delivering content via streaming technologies was not, in fact, Netflix, but rather its old competitor Blockbuster. In the early 2000s, Blockbuster formed a team to explore the possibility of having its content library available to its customers online. However, as most people still had dial up internet connections and with broadband just beginning, streaming did not function well enough to serve its customers with adequate connections. When Netflix pivoted from its lucrative DVD mail order business to a service that relied on streaming first, the technology had finally caught up and its customers could watch many of its movies and shows online clearly and completely. The transition happened faster in the United States than Netflix had anticipated, leading to an increasing number of subscribers from which Blockbuster and other services could not match. As internet connections have improved throughout the world, Netflix has continued to ride this trend and provide its international customers with the same, clear experience.
Not only did Netflix have faster connections to its customers’ computers so they could view its content online, mobile technology advanced so that Netflix could function across multiple of its customers’ devices, making it a much more necessary subscription service to have. The success of the iPhone in making Americans want smartphones and the follow on introductions of other smart devices like tablets gave Netflix platforms to have more touches with its customers. In 2010 it launched the Netflix application for iPhones and iPod Touches. Again this accelerated with international growth and the proliferation of smartphones around the world.
Finally, as a byproduct of the changing technological landscape, customer tastes changed in the way in which they viewed content and what they were viewing in ways that Netflix took advantage of. Because screens were now available at all times, video became more of an essential part of people’s lives. No longer did people feel they had to sit down in movie theaters or wait for their weekly television shows. Because they were constantly connected to fast internet, they could watch short form video whenever they wanted. Netflix, unlike traditional film and television production studios, was in the prime position to deliver this content. Their data showed what their customers watched, in what increments, and what they desired more of. All this made Netflix the behemoth it currently is.
As Netflix goes forward it will have to continue to use technological advancements to be everywhere consumers watch content and have the content that allows them to keep growing subscribers. But since their origins as a DVD by mail service, they have used digital transformation to grow passed most of their competitors.