Innovation and Business Development

The article discusses the importance of innovation in the entertainment industry and analyses the past and future of Netflix. It highlights the growth of the industry due to technical advancements and the availability of network channels.

Running head: INNOVATION AND BUSINESS DEVELOPMENT
Innovation and Business Development
Name of Student
Name of University
Author Note

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INNOVATION AND BUSINESS DEVELOPMENT
Table of contents
Introduction................................................................................................................................2
About the industry......................................................................................................................2
About the company....................................................................................................................3
Industry in the past 10 years.......................................................................................................4
Company in the past 10 years....................................................................................................4
Industry 10 years future.............................................................................................................5
Company 10 years future...........................................................................................................6
Discussion..................................................................................................................................7
Conclusion..................................................................................................................................8
Reference....................................................................................................................................9

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INNOVATION AND BUSINESS DEVELOPMENT
Introduction
In the modern world, innovation is considered as a strategy that is used by
organisations to gain more success and profits. Innovation and entrepreneurship work
simultaneously so that managers can understand the level of changes that are required for
implementing the strategies. As such, innovation opens up opportunities to satisfy customers
and gain a competitive advantage in the market. However, as stated by Drucker (2014) the
innovation adopted by the organisations need to be smart so that more profit can be generated
along with the loyalty and trust of the customers.
The assignment highlights the importance of innovation and makes a comparison
about the effect innovation has on a particular industry and organisation. To provide a more
specific discussion about the effects of innovation, Netflix is considered along with the media
industry in which it works. A comparison is made by analysing the past 10 years of the
company and industry along with the predictable future of the 10 years. The comparison is
made taking the progress of the industry and the company separately and the impact it may
have on one another.
About the industry
Streaming media is in a multimedia industry that constantly receives signals from live
sources and delivers it to the customers. The manner of obtaining video from live sources has
prompted people to coin the term stream. This is the form of delivery that is provided to the
audience and helps them to enjoy the shows by watching them online or by downloading it
(Vogel 2014). The industry came into existence in the early 1930s wherein the elevator music
was considered as the most popular form of streaming media.

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INNOVATION AND BUSINESS DEVELOPMENT
As observed by McLuskie (2017) the change of time has changed the form of
streaming media and nowadays, the internet is considered as the main source of streaming
media in the world. In the modern world, the streaming industry has become a most popular
form of viewing movies and television series. The manners in which people perceive the
viewing of their favourite shows have provided an opportunity for the expansion of the
industry. The developments of companies that promote the shows such as Netflix, Fox and
CW have elevated the industry to a new level. Some of the other popular streaming services
provided include Spotify and Apple music for the live streaming of music all across the
world.
About the company
Netflix is an American public company that provides entertainment to the people.
Reed Hastings and Marc Randolph founded the company in the year 1997. The headquarters
of the company is in Los Gatos, California. Netflix specialises in providing streaming media
and video-on-demand online. The expansion of the company in the film and television
productions has enabled it to gain a huge reputation in the market. It possesses an online
distribution store that helps Netflix to channel various shows and movies to customers all
over the world. Currently, the company provides its network across 190 different countries
(Netflix.com 2018).
However, despite its success; some of the countries like Mainland China, Syria, North
Korea and Crimea have boycotted the use of the network channel mainly due to its American
origin. The first content production of Netflix started in 2012 after it had launched the
television series Lillyhammer. Since then, the company have expanded its production in both
television series and movies. The development of Netflix Originals has provided the
company with an opportunity its personal online library of movies and television series that

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are mostly enjoyed by millions of customers (Burroughs 2018). In 2016, the company had a
record-breaking release of 126 original series and films, which until date none of the other
production houses has managed to achieve (Netflix.com 2018).
Industry in the past 10 years
The streaming industry had come into existence since the early 1930s and had slowly
developed into its current stature. In the words of Galindo and Méndez (2014), the streaming
industry began to shape itself with the advent of the internet. However, going back to a
decade, the success of the streaming industry was not that popular. This is mainly because the
customers preferred to watch the shows after returning home and viewed the shows on the
television. Moreover, internet in most parts of the world was not developed. Hence, the
people around the world failed to use the online streaming facility that was provided.
As observed by Johnston and Marshall (2016) during the past ten years, the streaming
media was at a $0.75 billion. The breakup of the manner in which the industry has developed
can be analysed by keeping in mind the lack of quality resources that could help in the
streaming videos. Hence, companies like Netflix and Fox could do little to continue with the
production of online sources of the movies and videos. The reason behind the cause of
success for Netflix is that it focused on taking the challenges that it received during its initial
years. Despite this, a statistical analysis of the growth of the company is shown to have
reached from making $0.75 billion in 2007 to over $10 billion in 2017.

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INNOVATION AND BUSINESS DEVELOPMENT
2007 2008 2009 2010 2012 2013 2014 2015 2016 2017
0
10
20
30
40
50
60
70
10
15.5
30 32.25
35.75
40
33.25
44.25 45 47.25
Graph of past 10 years
Series1
Amount in billions
Figure 1: Graph of past 10 years
(Source: Created by author)
Company in the past 10 years
As observed by Christensen, Raynor and McDonald (2016) Netflix is the world’s
leading internet network that provides entertainment via the television media. The popularity
of the company during its early years was insignificant as it lacked the conviction of
entertaining people. Even with the development of its first series in 2012, the company
managed to receive negative feedback from the people. However, the innovation of the
company has been largely due based on collaborating with successful franchises like the
Marvel franchise.
The popularity of the Marvel Cinematic Universe and other crime-related series such
as the Mind hunter has helped in elevating the status of Netflix in these past ten years.
Statistically, it has been seen that the growth of the company ranging from 31st December
2007 to 1st January 2017 has seen an increase from $1.2 billion to $8.8 billion (Netflix.com
2018). This signifies the rate at which the popularity of the company has increased and the

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INNOVATION AND BUSINESS DEVELOPMENT
impact it has on the growth of the streaming industry. The net income of the company is
about $559 million, which suggests that despite a slow start of the business, the past ten years
have been productive for the company.
2007 2008 2009 2010 2012 2013 2014 2015 2016 2017
0
5
10
15
20
25
30
35
40
45
50
Series1
14 12 10
15.5 20 22.76 20.75
30
35
45.75
Graph of past 10 years
Series1
Amount in billions
Figure 2: Graph of past 10 years
(Source: Created by author)
Industry 10 years future
After having analysed the present demand of streaming and the manner in which it
has grown over the years, it can be said that in the next 10 years, this industry may grow to
dominate the world. The manner in which people respond to online streaming of favourite
television shows and movies indicates the nature of growth that the industry has sustained.
The growing popularity of the internet and the increased channels that provide different
movies and television shows contribute heavily to the growth of the industry. As stated by
Barron et al. (2015) the opportunities that the industry can provide in the future include more
promotion of the streaming industry in remote parts of the world. This can help in making the
industry as number one in any business market.

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INNOVATION AND BUSINESS DEVELOPMENT
Last year it was seen that about 50% of the internet usage was dedicated to watching
online videos. The estimation of the usage of internet is expected to rise by 20% within 2028.
The introduction of 4G-internet connection has also contributed to the downloading of the
movies and television series in smartphones and laptops. Escoffier and McKelvey (2015)
stated that the live streaming of the shows has been made popular more due to the existence
of smartphones. Netflix adopted this blue ocean strategy to mitigate any competition that
arises from other television companies. At the same time existence of different competitions
such as Netflix, Amazon Prime, WB, CW have managed to enhance the growth of online
streaming among the population and ensure its survival.
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
0 10 20 30 40 50 60
10
15.5
30
32.25
35.75
40
44.25
45
47.25
50
Graph of future 10 years
Series1
Amount in billions
Figure 3: Graph of future 10 years
(Source: Created by author)
Company 10 years future
Netflix has tasted recent success with the introduction of highly successful shows.
The company gained popularity from 2013 with the introduction of the show Orange is the
New Black and have since then continued its growth. Recent television shows such as Mind

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INNOVATION AND BUSINESS DEVELOPMENT
hunter and the collaboration with the Marvel Cinematic Universe have guaranteed the success
of the company in the next years. Ulker-Demirel, Akyol and Gölbaşı-Şimşek (2018) observed
that investing in Netflix might provide investors in earning huge profits. This is mainly
because of the excessive streaming of the audiences of Netflix related shows and the
subscription facilities it provides to the people.
Investing $1000 in Netflix in 2008 can help in gaining about $51,000 in 2018
(Netflix.com 2018). Therefore, the growth rate of the company has been in excess and it is
expected that the company may earn a profit of $50 billion within 2018. Apart from this, the
continuation of the shows such as that of the Marvel franchise and Mind hunter can help the
company maintain its popularity in the market. At the current growth rate, Netflix is likely to
continue its operation in the industry and can innovate by renewing contract with popular
shows such as Stranger Things for the remaining three seasons (Aguiar and Waldfogel 2017).
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
10 15 20 25.75 30 35.75 20.75 45 35 45.75
Graph of future 10 years
Series1
Amount in billions
Figure 4: Graph of future 10 years
(Source: Created by author)

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INNOVATION AND BUSINESS DEVELOPMENT
Discussion
The analysis of the industry and the company states that the entertainment industry
has grown in huge popularity in the modern world. The manner in which customers provide
responses to the new movies and series, contribute heavily to the growth and popularity of the
industry particularly in the modern world. The analysis shows that certain factors contribute
to the growth of the industry and these factors are important to analyse the growth and
popularity of the industry (Hiller 2017). The online streaming of the television shows and
movies have increased due to the technical development that has taken place world.
According to Escoffier and McKelvey (2014), the technical development has come in
the form of increased number of smartphones and a highly efficient internet connection. The
introduction of smartphones has resulted in people watching the movies and televisions while
they travel. The streaming of the shows provides opportunities for download and people tend
to save the shows for future view. At the same time, the introduction of high-speed internet
connection has resulted in the increased download of the shows and people continue with the
online streaming. The increased number of network channels has also contributed to the
popularity of the industry.
The competitors of Netflix such as CW, WB and Fox have contributed to the growth
of the industry and the companies. The availability of various television shows and movies in
these networks attract people into subscribing to the channels (Chao, Hegarty and Fray 2016).
The revenue generated from these shows have resulted in the slow and steady growth of the
industry and within the next 10 years, the entertainment industry can be considered as the
most industry in the world. At the same time, the popularity of the shows hosted by Netflix
has brought the company closer to the audience. Hyatt and Johnson (2016) stated that the
shows that are continuing in the company have the potential to attract the audience and
ensure that a new era in technology and entertainment can be formed.

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Conclusion
Hence, it can be concluded that the popularity of entertainment in the modern world
have grown significantly. People enjoy new movies and series each day to get relief from the
stress factors. Innovation in any industry and company contribute to its growth and
development. In the case of the entertainment industry, the innovation is seen in the form of
new concepts and stories that are developed each week. Hence, the continuous growth of the
industry and the companies involved in it is an indication of the popularity of the shows in
the market. The discussion shows that there has been a significant growth in the
entertainment industry due to the emergence of live streaming and the high-speed internet.
The various networks such as Netflix have managed to provide the required shows that are
essential for the growth of the company as well as the industry.

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Reference
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digital trade?. Journal of Cultural Economics, pp.1-27.
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