Is Your Organization a Blockbuster or a Netflix?
One of the biggest challenges companies face today is how to respond to a new generation of technology. You probably remember Blockbuster Video- they rented out DVDs and VHS tapes at retail stores. They were doing pretty well until Netflix came along with DVD-By-Mail, which made it cheaper and more convenient for consumers to get the movies they wanted; causing Blockbuster’s business to decline.
Then video streaming came along. With more people using smartphones and tablets, it became much more convenient to watch shows and movies on these devices as opposed to fumbling with a DVD player. Netflix struggled with howto survive the transition of customers who wanted to ditch DVDs and watch streaming videos instead. So, they adapted and reinvented themselves, adding instant streaming in 2007 and beginning to produce their own content. Blockbuster chose to stick to their guns and in 2010 they declared bankruptcy.
Netflix is now the world’s leading Internet channel for movies and TV, accounting for more than a third of peak Internet traffic in the U.S. Recently, there’s been some buzz around their new job posting, in which they announced their search for a UK/Ireland based tagger to join their content team. This “tagger” will be paid to watch TV shows/movies and tag them with genres. The reason for this position is that Netflix has a recommendation engine that suggests movies and shows a user might be interested in based on their prior viewing habits. Netflix taggers are responsible for watching and analyzing productions, and then choosing from a pool of 1,000 words that best describes it. Netflix explains the tagging process “is the first stage of the Netflix recommendation system and works in concert with advanced algorithms that generate highly personalized suggestions for every one of Netflix’s nearly 50 million members, offering them an individualized set of titles matching their tastes.” For most of us, binge-watching Netflix is a sacred activity that occurs after work and on the weekends, but for a select few, it’s a career.
Netflix is also invested in the streaming quality of experience (QoE), which refers to the experience a user has once they hit “play.” They have a team that works on understanding the impact of QoE on user behavior, creating an impressively personalized streaming experience, determining what movies and shows to display based on viewing behavior, and improving the technical quality of their content based on data and feedback.
The rise of Netflix and demise of Blockbuster is the perfect example of how emerging technology can transform an industry. To succeed, organizations need to capture the value of technology before their competition and constantly look for ways to maintain relevance.