Future Trend of Entertainment at the age of Internet and Data: a Case Study of Netflix

Netflix is an online media provider located in Los Gatos [1]. The stock price of Netflix has doubled since the beginning of year 2018, which is surprising at a first glance since it is known that Netflix has been suffered with its poor financial condition. Netfilx’s poor financial condition results from its spending a lot of money (approximately $12bn-$13bn) on its content however it charges a low subscription fee on its customers and it cannot easily pay off its debt unless it increases the subscription fee [2]. However, what are the potential reasons for investors to have a strong faith in Netflix’s prospect? How does Netflix disrupt the old entertainment industry with power of Internet and data?

First of all, the success of Netflix indicates the future trend of entertainment media delivery way. Nowadays, with the fast development of internet services, people tend to watch videos online instead of through traditional TV services as a way of sparing their leisure time. Netflix, as the typical example to provide entertainment resources online has been popular among families all over the world thanks to its high qualify of resources and great number of options. The fact that AT&T has merged with Time Warner, a well-known entertaining media company, also proves that the big TV stream company has realized the future trend of entertaining media trend, which is what Netflix is doing [2]. Also, starting from last decades, the popularization of smart mobile device and 4G services further changed the pattern how people spend their time. More and more people use their tablet and phones to watch whatever they want to watch wherever they are, which gives Netflix an added advantage.

Secondly, Netflix, as a high technology company who also possesses a huge number of data, utilizes its data to improve its customers’ overall experience with Netflix by understanding their preference better thanks to the data analysis. With the help of artificial intelligent and machine learning algorithm, Netflix would know what kind of videos they should recommend to their customers and make them “addict” to their contents.

Lastly, as a giant technology company, Netflix cares not only about its local market, United States, but also pays attention to the market outside USA. Its show is equipped with multiple subtitles to benefit people all around the world. Netflix works hard to become an international company and provide best services to people all around the world. No wonder people will have confidence in the bright future of Netflix.

To conclude, Netflix competes with traditional media provider with the popularity of mobile device, better Internet accessibility all over the world and advanced data science, and fundamentally change the entertainment industry. Whether online media provider like Netflix will replace traditional will be an even more interesting topic to discuss at the age of Internet and Data considering the fact that entertainment industry will continue to grow rapidly thanks to the growing markets of China and other developing countries. However, in the long term, Netflix may need to find its way to increase its ability to gain profit. It will be difficult to increase the subscription fee due to such competitive market. It’s a common problem for Internet companies who have a lot of customers but cannot find ways to make money.

Reference:

[1] Netflix, Retrieved July 5^th from https://en.wikipedia.org/wiki/Netflix

[2] Can Netflix please investors and still avoid the techlash? Retrieved July 5^th from https://www.economist.com/leaders/2018/06/28/can-netflix-please-investors-and-still-avoid-the-techlash

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