Question

Identify and describe some of the technology innovations that Netflix was able to exploit and how these innovations contributed to competitive advantage.

Answer 1

For Netflix, the tech is just as important as the storytelling. Regardless of how many shows or movies Netflix produces, it needs to ensure that its 118 million subscribers can watch them without issue -- no matter where they are in the world, which smartphone they own or how fast their internet is. Netflix even recently re-encoded its entire catalog (said to be around 6,000 titles) to produce the best possible picture using the smallest amount of bandwidth, which was made possible by an AI technology it developed called Dynamic Optimizer.

Its other main focus is to provide the filmmakers it works with the necessary tools to create content at a high level, then distribute that around the world.

Netflix has also been a big proponent of high dynamic range, which delivers richer colors and deeper blacks. The company now has more than 300 hours of HDR programming, but it says the challenge is to not make content only look good on high-end TVs. Everything Netflix makes and streams needs to be just as perfect whether you're watching on an iPhone X, a Galaxy S9 or an older, entry-level smartphone.

Another way Netflix is helping the people working on its shows is by digitizing production crews, an effort that highlights the company's tech chops and how it's using its resources now that it's also a studio. With an app called Move, Netflix has simplified aspects of the production process, such as crew management and scheduling shoots

Netflix has been in the tech business for more than a decade is what gives it an advantage over its entertainment competitors. It doesn't just want to be a content creator or a tech company; it wants to be both. The latter has been Netflix's core advantage up until now, but it'll need to continue innovating to keep its momentum going. The Internal Culture has played a massive role in differentiating the brand and in building a sustainable competitive advantage.

Netflix, by focusing on its core value propositions, projected a consistent image of credibility and built a sustainable competitive advantage.