Read and analyse the case study on Netflix, then write a well-formulated essay in response to the following questions: Which of the four drivers of globalisation has been the most influential in the expansion of Netflix and to what extent do you think it is a globalised business? Article 1: How Netflix is tapping into emerging markets Netflix’s venture in emerging markets shows us the importance of local knowledge and global partnerships. Netflix started as a DVD-by-mail rental service in the 90s, delivering striking red envelopes to American homes. It might be hard to imagine seasons of Stranger Things, Black Mirror, or House of Cards arriving in mailboxes; the streaming giant, as of today, has 196 US-language TV series in its library waiting to be binge-watched. Even in light of that might, the company has experienced a loss of 130,000 paid subscribers in its home market, and fell far from the targeted 5 million new subscribers for the second quarter of 2019. The firm is recognizing that its unique selling point is wearing off, thanks to the rise of imitation services from the likes Amazon Prime, Hulu, Disney plus, and Apple TV+ offering on-par, bigbudget content, and services to the Western market. Hence, to draw up the number of subscribers— and overall revenue as a result— Netflix had set its sight on emerging economies in the East. Since its voyage, the streaming service saw a rise (31 per cent) in average streaming paid memberships and a revenue of US$5.2 billion for the third quarter was achieved. For companies looking to stamp their presence and expand to emerging markets, there are certainly some pointers they could take from the streaming site’s strategy. Emerging market insights Netflix prides itself on ensuring that user experience (UX) is top-notch by using algorithms to track user habits. The algorithm captures the interests of a user and forms a portfolio, recommending similar content to the user. At the same time, machine learning (ML) updates the portfolio every time the user engages with content from Netflix, constantly enhancing its personalized recommendations. In simple terms, algorithms help Netflix understand what an individual user likes; on a larger scale, this concept can be adapted to identify what an entire region or nation would like, and the multi-faceted technology is capable of doing so. Therefore, data insights and analysis— and action off the back of it— is behind the move to create more original content blended with local culture and languages to achieve a greater share of subscribers in new markets. ‘To date, we have globally released 100 seasons of local language, original scripted series from 17 countries and have plans for over 130 more in 2020,’ the company said. ‘We also plan to expand our investment in local language original films and unscripted series.’ Aware that accessing a global market means adjusting for different consumption habits, Netflix released a mobile-only subscription plan in mobile-first nations like India and Malaysia with the lower price of RS199 (US$3) and RM17 (US$4) per month. Besides the affordable price, Netflix’s encoding technology, which fits content to entry-level mobiles and flagship mobile devices, casts a broader net in a new market. Partnerships and collaboration: a winning combination Setting up in a new country can be costly and it is usually larger firms with substantial investment and ample resources that can embark on this endeavour. However, seeking support in partnerships, both in terms of technology and unique insights they can provide, can be a game- changer for many startups or SMEs looking to scale up internationally. Partnership growth initiatives have been a major contribution to the success of Netflix’s penetration to new markets. For example, the company collaborated with Vodafone to offer viewers in Ireland video-on-demand services with a dedicated Netflix button built on its remote control. Last year, Netflix formed a partnership with Telefo?nica (a large integrated telecommunications service in Europe and Latin America), enabling customers to pay Netflix subscriptions via the telecommunications bill. To add on, customers can choose a mobile data plan which includes Netflix services without additional charges. Similar strategies have been used when it recently launched its mobile-only subscription plan in Malaysia by developing partnerships with local telecommunications companies to reach out to potential users. ‘Every partnership is slightly unique, and it’s a great opportunity for us to grow and to partner with these local organizations,’ Ajay Arora, Director of Product Innovation at Netflix, told TechHQ at a press event in Kuala Lumpur, Malaysia. Comprehensive market research, which involves time and groundwork, is essential but can be challenging for many companies looking to venture into emerging markets. Therefore, partnerships with local organizations may lay a solid foundation during expansion to new markets. In brief, new technologies are connecting and bringing communities together, making collaboration easier and entering new markets that much more feasible, and lucrative. Article 2: What is the Netflix Effect? When’s the last time you saw a movie in theaters? How about the last time you watched a movie or show on Netflix? If you’re like most consumers, you’ve done the second thing more often.Even as movies bring in record amounts of money at the box office, Netflix grows its number of subscribers by around 10 per cent a year and now has an estimated more than 59 million subscribers in the U.S. alone. There’s no doubt Netflix is the definitive modern media company, and its impact is felt in a number of industries. It’s what experts call the Netflix Effect. The Netflix Effect is when a new series catapults an unknown actor to fame — overnight — a result of millions of people binge watching a show. Changing how consumers view content Before Netflix, consumers went to the movies, rented VHS tapes or DVDs and watched whatever was on live TV. Now, consumers can stream content instantly to any device, anywhere. Netflix has changed how consumers access film and TV. They’re no longer tied to the TV and forced to sit through commercials. Instead of paying for cable plans, a growing number of Americans are cutting the cord and only using streaming services. In 2018, the number of people who cut the cord increased by nearly 33 per cent, to 33 million people. At the same time, Netflix users are increasing. Consumers prefer the flexibility of being able to watch what they want when they want to. One of the biggest factors for consumers deciding how to view content is the programming.Consumers don’t want to pay for content they won’t watch. Netflix spent a staggering $13 billion on content in 2018, with around 85 per cent of that going to original shows. Original content is what stands out to viewers. They can watch most network shows in multiple places, but they can only get original content straight from Netflix. The content creation side of the company seems to be hitting on all cylinders. The Netflix original movie Bird Box was watched by 45 million accounts its first weekend. When translated to box office dollars, the movie would smash anything currently in theaters. Updating internet business models Netflix was one of the first companies to use new internet technology to drive nearly its entire business model. The service started as a mail-order DVD company, but now just a sliver of its customers actually get their DVDs by mail. Instead, Netflix relies on the internet to share its products with customers around the world. The online business model has also allowed Netflix to collect huge amounts of data on its customers. Netflix’s AI-powered* algorithm creates personalized recommendations for each user based on their preferences, watch history, ratings and demographics. The recommendations are usually incredibly accurate. According to Netflix, 80 per cent of watched content comes from recommendations. In an age where brands across all industries are trying to predict what customers want next and create personalized recommendations, Netflix is setting the bar. Netflix also understands the need to constantly be innovating. The company has changed drastically from its original form of a DVD service. Looking for new technology and staying ahead of trends helps it define and disrupt the industry. Impacting film and TV industry Netflix affects many industries, but the greatest impact is felt in film and TV. Netflix’s content is put right in front of customers for easy marketing. Netflix recently made a move into the independent film category, where traditional movies in theaters typically face an uphill battle being seen. Now, even small films can easily be seen on Netflix. Netflix is also in direct competition with traditional TV. The company used to be a boost to traditional shows and would draw users to existing shows that were still airing on TV. But since 2013, Netflix has been creating its own original content that puts it in direct competition.Essentially, for every show Netflix creates, it’s taking away viewers from a traditional show on network TV. After all, users can only watch so many things. Film and TV companies have to adjust their processes and content to keep up with Netflix. What is the Netflix Effect? It’s a move towards more convenient, personalized content. The success of Netflix shows that consumers want products that are easy to use and tailored to match their preferences. Every company, no matter the industry, can learn from Netflix and apply the principles of innovation, disruption and personalization. If they don’t, they run the risk of being disrupted by the growing media giant that is Netflix. *AI = artificial intelligence Article 3: European Parliament approves Netflix content quota Under the new guidelines, 30 per cent of all content carried on streaming services in Europe will have to come from the region The European Parliament has approved new regulations for online streaming services, imposing a quota for home-grown productions on Netflix and co. The guidelines will require that at least 30 per cent of content carried on streaming services operating in the European Union originates from the region. On-demand platforms are also being asked to contribute to the development of European films and TV series, either by directly investing in content or by contributing to national subsidies. The level of contribution in each country should be proportional to the on-demand revenues in that country. The updated directive, which applies to local and pan-European broadcasters as well as SVOD [Subscription video on demand] players and the likes of Facebook and YouTube, also calls forincreased protection of children ‘from violence, hatred, terrorism and harmful advertising’ onstreaming platforms. The directive includes a requirement that services such as Netflix and Amazon Prime act quickly when content is reported or flagged by users as harmful, andintroduces strict new rules on advertising and product placement in kids’ content. Advertising can take up a maximum of 20 per cent of the daily broadcasting period between 6 a.m. and 6 p.m. In the primetime window of 6 p.m. to midnight, advertising can take up a maximum of 20 per cent of total broadcasting time. The new regulations now go to the Council of EU ministers for formal approval before they are sent to individual member states that will have two years to enforce them. Netflix and Amazon, anticipating the legal shift, have already made moves to increase their local production in Europe. Amazon this week unveiled a new slate of European programs, while Netflix has rolled out plans for new production hubs in France and Spain. Purchase answer to see full attachment Tags: Netflix Original Namaste Wahala economic terms free trade international expansion User generated content is uploaded by users for the purposes of learning and should be used following Studypool’s honor code & terms of service.