p.p1 both programming and investment to consumer behaviour” (Rataul,

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The second big phase of Netflix’s development is known for its introduction of online streaming. During this particular stage of its evolution, Netflix’s organizational and service innovation meshed together and, combined, advanced the company in providing a better and more specific product as well as a more personalized experience for the user. 
As the company grew both in customers and in scale, it made a choice to strategically use the technological advancements in the streaming sector and in big data analytics to improve its product even further. Indeed, as internet bandwidth became stronger, as screens increased in quality and definition and as compression algorithms for video and audio became faster, Netflix decided to shift away from its rental strategy and develop their streaming capabilities (Ruiz-Navas, Miyazaki, 2: 2017). On a larger scale, this digital transformation illustrated the increasing reality that the digital world was malleable, networked and could be effortlessly replicated to the advantage of the user (Mod, 2015). Netflix understood this fundamental distinction early on and was therefore able to offer a boundless catalog of movies and entertainment to its customers through instant content distribution and for a reasonable price (Gomez-Uribe, Hunt, 2015). 
The introduction of streaming on Netflix also helped the company to explore a more intimate connection to its customers (White Paper, p.6). Indeed, its initial online recommendation engine slowly transformed into big data analytics. Through the development of proprietary algorithms, the company could “amass detailed data about their subscribers, allowing it to tailor both programming and investment to consumer behaviour” (Rataul, p?). This narrow-focused and improved use of data in regards to its product “promised more stability, perhaps even predictability, for an industry typically characterized by risk and uncertainty” (Kelly, 2017). Through understanding the experience and needs of its users, Netflix successfully incorporated their expectations and feedback into further innovating its services. This is where the company’s organizational and service innovation merged together. Through interaction and feedback dynamics, customers were now able to build their own television schedule through Netflix (Jenner, 2070:). From 2007 to 2012, Netflix grew from 7 million to  to 33 million subscribers. 

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