Netflix is a paid subscription video streaming platform. The company has a network of over 100 million subscribers and it was operating its business in 190 countries across the world. Netflix has successfully implemented the changes by transferring into the online platform relevant to the business market and technology trend. Today, we’ll discuss the Netflix change management case study; its historical background, compelling forces, CM process, and lesson learned from the company’s success.
Netflix offers the following products and services;
- TV distribution
- TV production
- Film distribution
- Film production
- Mobile gaming
- Video on demand
- Pay television
- Streaming media
Nowadays, Netflix falls under the category world’s top 50 most visited platforms that customers visit for online video streaming. In fact, Netflix offers you access to more than 200,000 titles of video content that users could watch on their smartphones, tablets, and computers. Its pricing package details are;
- Standard with ads – 6.99/month
- Basic – 9.99/month
- Standard – 15.49/month
- Premium – 19.99/month
Historical Background of Netflix
- 1997 – Marc Randolph and Reed Hastings laid the foundation of the online video streaming platform on 29 August 1997.
- 1999 – Launched the subscription option on rental DVDs and they allowed users to keep unlimited rental DVDs without any late fee charges
- 2000 – Planned to sell their company to Blockbuster for 50 million dollars and they rejected the offer
- 2007 – Introduced an online video streaming platform that allowed users to pay and watch online
- 2013 – Lunched “binge watching” by allowing its users to watch the whole season in one sitting rather than releasing episode by episode
- 2015 – Introduced their own production company by the name of Netflix Original
Forces Impact Change Management in Netflix
Internal Organizational Forces
The internal organizational forces comprise of following elements;
- The implementation cost of the new business model
- Changing the working environment with the introduction of technology
- Managing the expectations of employees
- Training the new skills to the employees
Netflix was aware of all of these factors while implementing the technological transition. They took a calculated risk and provided training to the employees, and it became the main reason for their successful transition.
External Organizational Forces
The external organizational forces that were pushing the company Netflix towards change are as follows;
- Social media platform growth
- Speedy changes in technology
Netflix’s managers and leadership were aware of all of these external factors, and they accepted the idea of change when everyone else was declining it. They kept in mind the likes and dislikes and expectations and behaviors of customers with the advancement in technology. However, the new technology introduced new methods and tools, and they impacted the TV shows and movie business. Netflix kept all of these elements in consideration and implemented the change in order to meet the needs and wishes of customers.
Change Management Process of Netflix
Collaborative Team To Manage Change
Netflix created a team of change leaders and it was their responsibility to deal with the change or any type of disruptions. They were collaborating and coordinated with product managers and engineers to make sure that the company would execute the changes in a controlled way and safely. It allowed the company to develop and apply a series of mechanisms that would help the company to reduce the impact of change and avoid any type of disruption.
Netflix used to conduct thorough risk analysis before implementing any type of changes. After implementing the changes, the company launched post-change reviews to recognize any type of disruptions that would come up. Resultantly, the video stream platform implemented the technological changes success with minimum disruptions.
How Netflix Employed Data to Bring Change
The data team of Netflix comprises 800 engineers, analysts, statisticians experts, and professionals. They follow the company’s mission statement and this is;
“To help Netflix understand its business in the world”
Their job is to gather and process data; the data comes from various sources and their job is to consolidate it, and data sources are;
- 3rd party research
- Social media activities
- Online surveys
- Clickstream is based on the clicks of users on what and when to watch
After data collection, they store data at the Netflix data storage facility. After that, the company’s data expert team employs a variety of quantitative, qualitative, and statistical models to comprehend the meaning behind numbers, develop patterns, and draw conclusions from them. However, it tells the company what actors and actress people want to see in the starring role.
Game of Thrones TV Series – Example
It was a popular thriller TV and it attracted the attention of a lot of people. After watching this TV series, they recommended the TV series to other people that haven’t watched it yet. It is because they wanted to watch the similar type of thriller shows. However, the Netflix data team was gathering all the data to apply changes in their business.
User data plays a significant role in the decision-making process of Netflix. It helps the platform to know what types of TV or News shows to produce that people want to see. However, it analyzes the pattern based on the user-watching behaviors and habits and their personalized recommendations.
Lesson Learned From Netflix Change Management Process
Eye on Industry Changes
If you want to maintain your company’s position in the market, then it is significant that that company’s leadership should keep an eye on the industry changes. It is highly important in today’s market of the internet and technology when things are changing rapidly. Netflix made radical changes in its business model, but careful planning and the right analysis helped the company to increase its profitability.
It is difficult to implement radical changes in your business planning and strategy. But they can become successful if you rightly plan and implement it. Netflix successfully implemented radical and drastic changes in the company, and it amplified the company’s position in the market.
Conclusion: Netflix Change Management Case Study
After an in-depth study of Netflix change management case study; we have realized that Netflix successfully implemented the change in technology. If you’re learning about how Netflix is employing data and its CM process, then you should keep in mind the abovementioned factors.
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