Netflix's Digital Disruption Strategy

This assignment examines how Netflix adapted its business model in response to digital disruption. It analyzes the company's initial DVD distribution strategy, the emergence of streaming services as a competitor, and Netflix's successful transition to a cloud-based platform. The report highlights the challenges Netflix faced due to security concerns and increasing competition, and it outlines the key changes they implemented to regain competitive advantage.

Running head: ICT PROFESSIONAL PRACTICE AND ETHICS
ICT Professional Practice and Ethics: Netflix
Name of the student:
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Executive summary
This report depicts the importance if developing error free secured and on time service to the
consumers of Netflix. Due to lack of technical function and operation the company was facing
major challenges those are required to be resolves. In order to resolve these issues Netflix has
changed their Work Centered Analysis (WCA) framework. Digital disruption has occurred in
Netflix and the changes occurred before and after the digital disruption are also elaborated in this
report.

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Table of Contents
1. Introduction..................................................................................................................................4
2. Discussion on case details of Netflix...........................................................................................4
3. Proper identification of the case..................................................................................................5
3.1 Problems of Netflix case........................................................................................................5
3.2 Goals of the case....................................................................................................................6
3.3 Challenges associated to digital disruption............................................................................7
4. Recommendation to the company...............................................................................................7
5. Implementation plan based on the recommendations..................................................................8
6. Conclusion...................................................................................................................................9
References........................................................................................................................................9
Appendices....................................................................................................................................11

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1. Introduction
This report depicts the effect of digital disruption in the business organization, Netflix. It
is defined that before and after the digital disruption different level of changes might occur that
would again make measurable changes in the organizations too. Adoption of new different
technologies acts as a catalyst for business success (Bradley and O’Toole 2016). In order to
provide an effective digital future to the business organization the system developers of the
organization wills to change the digital platform from the traditional one. The identified issues
for which the changes are required are elaborated in this report.
In addition to this, the status of the work centered analysis before and after the digital
disruption are illustrated in this report. One of the most well known American entertainment
companies founded in the year of 1997 had to face digital disruption due to their initial business
model (Moller, et al. 2017). The company was specialized in serving streaming media, DVD and
also on demand online videos. In 2017, the company had around 109.26 million of consumers
throughout the world. Basically their efforts for producing new products with high security and
additional content their profit is also ranging from the $16.9 to $21.10 within 2017.
2. Discussion on case details of Netflix
Netflix is a streaming service provider that allows the consumers to watch wider variety
of different TV shows, movies as well as documentaries. It provides different internet connected
devices too (Kramer and Kalka 2017). Moreover, it can be said that, Netflix allows the
consumers to enjoy unlimited opportunities to view different contents even without any kind of
commercials. Though the company has huge number of viewers throughout but still for getting

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more competitive advantages they wished to expand their business and during making this
change, they faced different issues those are required to be resolved sooner. In order to add more
contents such as TV shows and movies as well they must undertook digital disruption in their
company (Rosenstand et al. 2017). However, in order to gain measurable revenue from the
competitive market including meeting the requirements of the consumers they changes their
service platform into a cloud based one.
3. Proper identification of the case
3.1 Problems of Netflix case
In the year of 2016, Netflix company announced that, they are willing expanded their
business in around 130 countries within a day only. However, their service will not be available
in China International market. Though, the expectation delivered a mixed resultant to their
consumers and even to the company. In the initial three months of 2016, the net profit of the
company was calculated to be internationally good. On the other hand in the second quarter of
2016, they failed to reach their expectation (Davis and Zboralska 2017). However, after the
forecast of the company, it is found that the growth of the way for the company was below the
street target measured by the company. The reasons for which they faced trouble in the
international market are as follows:
Local content limitation: There is a different company who serves effective service
throughout. This particular limited amount is extremely related due to the religion competitors in
the developed marketplace such as France, Germany etc (Riemer et al. 2015). It is found that the
contents offered by Netflix are limited and the other competitors of the company offers more

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localized content to their consumers. This is a major trouble to the company which is needed to
be resolved.
Barriers in language: Netflix mostly offers English contents to their consumers that
might hamper many counties like Russia, Portugal demand. According to the census of 2010,
only 5% of the country could speak English. Therefore, language barrier is referred to as main
issues for Netflix that hampered the revenue of the company.
High expense: Many companies are there which offers similar kinds of services to the
consumers. In order to develop the market of the competition level, significant changes are
needed to be considered by the company. The initial requirement of any consumer is to adopt
affordable subscription services (Flew 2017). However, in case of Netflix the monthly
subscription charge was found to be very high than the others. This is the reason for which the
number of consumers for the company is reducing day by day.
3.2 Goals of the case
The goal of Netflix is to deliver successful, on-time and affordable services to the
consumers throughout the world avoiding expense issues and language barriers as well. It is
expected that as soon as the company would start delivering affordable services to the consumers
it would be able to gain competitive advantages and measurable revenue from the market as well.
Moreover, the goal of the company is to resolve all the identified issues including few of the
flaws. Other current ethical issues that have been identified by Netflix is that they lied to the
public about their services openly.
Therefore collective it is determined that the goal of the company is to deliver data caps
those are restricted to avoid ethical dilemma. Apart from this, the communication team of Netflix

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also wills to offer good streaming experiences for the consumers for avoiding unexpected fines
from the mobiles service providers.
3.3 Challenges associated to digital disruption
Different challenges might occur after the digital disruption. It is define that if digital
disruption took place in the companies then the operational and functional ability of the company
would be affected automatically (Kramer and Kalka 2017). The challenges associated to digital
disruption are as follows:
Security: During the digital disruption due to lack of security most of the information
could be hijacked with unauthenticated external assaults.
Data loss: In order to avoid the issues with services, delivery and price the company is
willing to transfer their digital platform to a cloud based one. It is expected that it would help the
business organization to resolve the issues accordingly (Valentine 2016). While changing the
platform information might get lost from the server. If proper backup and disaster recovery plans
are not added to the services then, data would surely get lost and cannot b ever retrieved again by
the service providers.
4. Recommendation to the company
Different alternative solutions are there that helps to ensure the improvement of the
Netflix services. The recommendation for the company is as follows:
 Development of modern streaming to make sure that Netflix has reached the
growth of the operators
 To avoid the poor streaming issues throughout the world is facing

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 Consumers should get on-time and secured services
5. Implementation plan based on the recommendations
In order to avoid the issues of security, communication, lack of availability of local
contents Netflix is focused to bring digital disruption in their marketplace. The goal of the
company is to deliver on time, accurate secured and enough content to the consumers throughout
the world. In order to deliver services avoiding these issues, the company has changed their
business model concept entirely. Netflix has developed a web based catalog service to their
consumers which are able to rent movies of older time in the DVD format. They could deliver
this service through mails also. Through this cloud based online website the consumers could
develop their movies wish list (Flew 2017). According to the currently implemented service they
would be allowed to deliver three movies from the consumer’s wish list with a minimal
subscription charge which is $19.96 in each month. The profit of this service implies that there
would be no such return deadline and late charges for the DVDs sent through emails. Even
Netflix could also introduce a service for delivering movies and other television shows directly
to the consumer’s PCs. It is expected that with the service quality Netflix could compete apple,
Amazon etc. The other reasons for which it is determined that Netflix would reach success are as
follows:
 They could make deals with Disney, CBS and Epix for the TV content
 This could introduce easy watch services as little as $8.98 per month

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 It would introduce limitless TV and movies streaming services
 It could separate the online streaming videos and mail services for delivering
DVDs to the consumers
6. Conclusion
From the overall discussion it can be concluded that, digital disruption is referred to as
one of the important steps that has to be taken by different business organizations to minimize
the rate of digital errors. Netflix a well-known entertainment service provider company serves
their services throughout the world. The classic management textbox theory has predicted that
the company should have failed now. While providing services to the company, it has been
found that due to lack of security agenda the rate of competition was increasing and the service
of this company is lagging behind. Instead of getting competitive advantages the company was
facing tough competition from the other companies. Beyond the DVD distribution second act
had also been created by the Netflix stock. Due to the knock of innovation at the doorstep, the
company wills to change their platform from the previous one to the cloud based one. After
identifying the problem, the different changes those have been needed and the changes occurred
after the digital disruptions are also elaborated in this report.

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References
Bradley, C. and O’Toole, C., 2016. An incumbent’s guide to digital disruption. McKinsey
Quarterly, May.
Davis, C. and Zboralska, E., 2017. Transnational over-the-top media distribution as a business
and policy disruptor: The case of Netflix in Canada. The Journal of Media Innovations, 4(1),
pp.4-25.
Dawson, A., Hirt, M. and Scanlan, J., 2016. The economic essentials of digital
strategy. McKinsey Quarterly.
Evans, P. and Forth, P., 2016. Navigating a world of digital disruption. IEEE Engineering
Management Review, 43(3), pp.89-97.
Flew, T., 2017. Social media and the cultural and creative industries. In SAGE Handbook of
Social Media (pp. 512-526). SAGE Publications Inc.
Kramer, A. and Kalka, R., 2017. How digital disruption changes pricing strategies and price
models. In Phantom Ex Machina (pp. 87-103). Springer International Publishing.
Moller, L., Gertsen, F., Johansen, S.S. and Rosenstand, C., 2017, June. Characterizing digital
disruption in the general theory of disruptive innovation. In ISPIM Innovation Symposium (p. 1).
The International Society for Professional Innovation Management (ISPIM).
Reddy, S. and Reinartz, W., 2017. Digital transformation and value creation: Sea change
ahead. GfK Marketing Intelligence Review, 9(1), p.10.

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Riemer, K., Gal, U., Hamann, J., Gilchriest, B. and Teixeira, M., 2015. Digital Disruptive
Intermediaries: Finding new digital opportunities by disrupting existing business models.
University of Sydney, Business School and Capgemini.
Rosenstand, C.A.F., Johansen, S.S., Tollestrup, C., Haase, L.M., Nielsen, K. and Gertsen, F.,
2017, June. Interdisciplinary Digital Disruption Research Framework. In ISPIM Innovation
Symposium (p. 1). The International Society for Professional Innovation Management (ISPIM).
Selwyn, N., 2016. Minding our language: why education and technology is full of bullshit… and
what might be done about it.
Valentine, E., 2016. Governance of enterprise Information and Technology: A new core
competency for boards of directors.

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Appendices
Appendix 1: WCA framework before the digital disruption

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Appendix 2: WCA framework after the digital disruption