Netflix was founded in 1997. Then Reed Hastings and Mark Randolph came up with the idea of sending out a DVD to hire. They introduced their service in 1998, and in 1999 they introduced a subscription system - you could order as many films as you like for a fee. In 2007, Netflix became a streaming platform.
The overthrow of the usual television business model began only seven years ago. Then the streaming company from Silicon Valley bypassed the channels HBO and AMC, buying the rights to staging a remake of the British mini-series "Card House". The producer of the project was David Fincher. At that time it was a serious application: firstly, Netflix spent a huge amount of money ($100 million for two seasons), and secondly, he indicated his ambitions as a streaming platform - not only to show the existing films and series but also to shoot their own.
How does Netflix differ from other TV channels?
One of the main differences between the Netflix model for working with television content is to order a whole season. Typically, channels spend millions of dollars to create a pilot series of projects, many of which will never see the light of day. But Netflix launches the series as a whole. Thanks to this approach, the viewer can watch the entire season at once (in the West it is called binge-watching - in one sitting down), without waiting for a new series every week.
Instead of selling the rights to show its series to other countries, Netflix preferred to present its service worldwide, so that a new series or film could be available simultaneously in America, Russia, Germany or India. Even the TV saintly model of audience demographics assessment was revised to identify the most interesting projects for the necessary target audience.
How does the market react to Netflix?
It is believed that Disney's attempt to buy out 20th Century Fox movie and TV projects is nothing but a reaction to Netflix's rapid promotion in the market. They say that the meetings on many TV channels begin with the questions "What do we do with Netflix?", "How do we compete with it and what does it do at all? Only Disney has the answer: the conglomerate intends to launch its own streaming service in 2019.
It is strange that large corporations cannot understand the simple logic of Netflix to which the service adheres: development generates further development, generating growth. While the audience is watching, Netflix is collecting data about their habits, sharpening their future programming.
The result is a vicious circle: more content - more views, more views - more subscribers, more subscribers - more profit, more profit - more content. So far, the scheme works perfectly. When the "Card House" was first launched, Netflix had 33 million subscribers worldwide. Now there are more than 125 million of them. Wall Street analysts predict that by the end of 2020 there will be 200 million of them.
How Netflix produces content.
An important feature of working with new Netflix content is decentralization and power-sharing. Ted Sarandos is the director of content, but he is not the only one who decides what to launch and what not to launch. For example, Cindy Holland, Vice President of Original Content, manages two other levels of managers who are able to make their own decisions about the launch of projects. Sarandos and Holland have also built a decentralized development and manufacturing system that allows Netflix to operate as 10-15 semi-independent production companies. Simply the results of their activities show one service.
Heads of departments responsible for different areas (documentaries, feature films, reality shows, etc.) also have the right to launch projects without Sarandos' consent. "They can launch them even if I'm against it," says Sarandos.
How Netflix works abroad.
The company has a procurement department responsible for foreign projects on Netflix (for example, Sherlock was bought from the BBC). But it is not the way for Netflix to limit itself to showing content that has already been filmed. The service is engaged in its own production of foreign content, for which there is a corresponding department. Many series made in the U.S. are popular abroad. In particular, "13 reasons why" in India are watched by as many subscribers as in America. But in order to be of interest to different countries, the service needs content produced abroad, in the language of the foreign viewer and with actors familiar to him.
Among the undoubted successes of foreign projects Netflix - the German series "Darkness" (we talked about it in detail), as well as the Spanish "Paper House". The criminal thriller tells the story of an ambitious robbery and consists of 15 episodes. In 2019, the series will be continued. To date, "Paper House" - the most popular non-English series Netflix
What is Netflix?
TV channels try to keep up a certain image. For example, HBO, FX, and AMC are set up to produce a series that can win awards and get the approval of critics. Is there a concept of "Netflix series"? How can we characterize the content produced by the service? Sarandos has a clear answer to this: "I don't want any of our projects to be defined by a brand, and I don't want our brand to define our projects. There is no such thing as a "Netflix series". This approach pushes people into a framework. Our brand is personalization.
Through personalization, the service finds something new. A couple of years ago, there was an opportunity to rethink the approach to youth shows. There are "13 reasons why", "In the neighborhood", "The end of the *** world". Interestingly, the British series about two rogue teenagers aroused great interest in the audience, which was not expected at Netflix: the company predicted almost failure of "The End".
Netflix and data.
The case of "The End of the *** World" illustrates Netflix's attitude to data processing. Strange as it may seem, the company tries not to rely on them when making decisions about launching certain projects. Sarandos thinks that data should be handled very carefully: "The main thing is not to get caught in the figures because otherwise you risk taking the same picture. The data only speaks of what has already happened. They do not predict what will happen. Decisions to launch projects are made on the basis of intuition and data, and the data in this equation occupy only 30%.
Instead of grouping subscribers by standard data (age, gender, race, country of residence), Netflix operates 2000 micro blocks, in which each user of the service gets into. The data about the viewed series gives much more information about the user than his age and sex. That is, 75-year-old Danes may like the series "Riverdale", which is loved by American teenagers.
As Netflix closes the series.
Despite huge budgets, the service periodically closes projects. 20% of Netflix shows do not get continuation. Sometimes even do not look at good reviews, as in the case of the series "Explosive Thing" (97% "freshness" on Rotten Tomatoes). The project was not particularly expensive to produce, but the number of users who watched it left much to be desired.
It turns out that Netflix focuses not only on whether the project in principle, but also on how it is viewed. If you turn on the series, but after a couple of episodes, the service considers it a guide to action: the program is not interesting to the viewer. Sarandos even has a word for it - "survival".
What series are the most popular on Netflix?
This information is still hidden from the press by the service. So it would be wrong to say that "Very strange things" is the most popular one. In general, it is not easy to count the number of viewers, because one account can be used by several people at once. Sarandos assumes that the size of the audience of streaming service reaches 300 million people. With this coverage, some Netflix series can easily watch from 40 to 50 million viewers.