Managing Innovation in Business

This report examines the innovation requirements of Netflix in the entertainment industry. It explores the future of the industry, identifies key innovation needs for Netflix, and develops a roadmap for implementing a Language Modulator feature. The report examines the feasibility, cost, and approval processes involved in this innovation, highlighting its potential impact on Netflix's growth and customer experience.

MANAGING
INNOVATION IN
BUSINESS

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................3
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
Future of Entertainment Industry in 2020 and Beyond..........................................................4
TASK 2............................................................................................................................................6
Netflix's Innovation Requirements in 2020 and Beyond........................................................6
TASK 3............................................................................................................................................9
Future Innovation Capabilities of Netflix...............................................................................9
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

EXECUTIVE SUMMARY
Innovation is the root cause of growth in present times. It concerns with modification of a
company's offerings to enhance its suitability as well as importance in the marketplace. The
report below is based on Netflix, Inc. which is one of the biggest names of entertainment
industry. It revolves around implementation of change in the organisation. The previous report
upon which this is based on covered the aspects of introduction of change in the organisation.
For this purpose, Netflix U was introduced which allowed the users to shape up their content on
the basis of multiple choices.
The following report cover the aspects of implementation of change in Netflix. For this
purpose, the future of industry was predicted in the year 2020 and beyond. Through analysis, it
was determined that companies like HULU, HBO and Amazon are few of the prime companies
that are likely to bring innovation in their processes. It would have their impacts on the industry
as well as innovations on the company.
Further, the report aims at the innovation requirements of Netflix in 2020 and after that.
There were many notable changes that fulfilled the requirements of innovation in Netflix. For
this purpose, the changes that were noted were effective filtration of the content as well as
interactive content which is similar to the innovation in previous report. Another change that
could effectively judge the innovation requirements was Language Modulator.
Another agenda of this report was to develop a road map to effectively implement the
change in the company. The change which the company seemed fit to go forward with was
Language Modulator. The road map covered the stages from suggestion of this innovation up to
its application in the organisation. It addressed its feasibility, cost as well as approval processes
which is necessary to implement this change in Netflix.

INTRODUCTION
Innovation in a business organisation is aimed at adding worth to its offerings. The
agenda of introducing innovation is to make their services and products more useful for
customers in the market (Biemans, 2018). The following report is based on Netflix, Inc.; an
entertainment industry company headquartered in Los Gatos, California. The purpose of the
report is to establish this innovation in the organisation successfully. To achieve this, future of
entertainment industry in 2020 and beyond is briefly discussed, along with innovation
requirements of Netflix in 2020 and in the future. The report also focuses on building future
innovation capabilities of the company by development of a road map which would describe the
overall process of their innovation. This road map would determine each stage which would help
Netflix implement innovation in their firm to ensure its future growth and sustainability.
TASK 1
Future of Entertainment Industry in 2020 and Beyond
As one of the biggest industries, Entertainment industry is subjected to a lot of
innovations in recent years. With various companies like Amazon, Hulu and recently HBO, the
streaming video on-demand facet of this industry has taken a huge leap lately. With advanced
technologies used in Visual Effects (VFX) and animations, the content developed by these
companies focus on spectacular visuals and compelling stories that engage more viewers towards
their matter. Entertainment Industry is currently ruling in terms of revenue and is likely to do so
in future. The Over-The-Top streaming services of the U.S. are likely to enhance its business and
grow up to $30.6 billion till 2022, almost $25 billion of which is likely to be generated by
Streaming Video on Demand (SVoD) segments of the entertainment industry (PwC Report: OTT
Video Streaming Steams Ahead In 2017 With $20.1 Billion In Revenue, 2018.). With impressive
internet facilities and high-quality streaming, the industry is likely to stay on the top of the
mountain in 2020 and beyond.
Technology also plays a vital role in enhancing the importance of this industry. With rise
in access to smartphones and smart televisions, content development has reached to a new
benchmark where it enhances the visual and audio experience of their viewers worldwide.
Automation and Artificial Intelligence is continuously penetrating the industry and its operations
which help the companies create technologically advanced and innovative contents.

There are various companies in this sector which are bringing new concepts and
innovative ideas to the market and consistently enhancing customer experience. HULU is one of
the most biggest companies in this market and is quite consistent when it comes to innovation.
The year 2020 would witness quite a few impressive innovations coming from this company. For
instance, the firm is planning to shift its content on to Virtual Reality where the subscribers
would be able to view channels like National Geographic (3 CX Innovations You Can Expect
from Streaming Services in 2018, 2018). Where HBO is concerned, the firm is planning to
engage its viewers by focusing more on developing original content. The firm, through this
innovation in its content is planning to wider its market in the world and undertake more
segments in its business. Another innovation in the process that the firm is making is the
cannibalisation of WarnerMedia. The firm is likely to acquire access of all the best works of
Warner Bros., near 2020 which would allow users to view their best works in high definition (A
Six Point Plan for HBO (The Future of HBO, Pt. II), 2018). With new and enhanced television
devices Amazon too is planning to up its game in the coming future. With its recent experiment
of Amazon X Ray, which allows the users to access bios of actors and background information,
the firm is planning to partner with more entities like Internet Movie Database (IMDb) in the
near future to give more innovative content to the customers along with the standard (What is X-
Ray for Movies & TV Shows?, 2018).
All these innovation have a wide impact on the industry. This is because with enhanced
services and added facilities, the agenda for increasing sales in near future is more or less based
on advanced technology or personalised services. More customers would engage with these
companies in order to experience visually advanced content and additional services. With
innovations in these companies, more firms with creative processes and services would be able
to enter the marketplace with ease.
As far as Netflix is concerned, the innovations happening around in the industry would
help the firm in modifying processes and give more over-the-top services to its customers.
Moreover, with such intense competition and threat of new companies, Netflix must have to
focus more on proper utilisation of technology in its products and processes for successfully
sustain in the market for long run.

TASK 2
Netflix's Innovation Requirements in 2020 and Beyond
As one of the biggest names in the entertainment industry, Netflix is bound to focus and
accomplish its innovation requirements to stay ahead on the curve. The firm, with its content is
successful in gaining a wide attention of customers worldwide who appreciates and follow each
of its new services (Trevino and Nelson, 2016).
However, with growing times and more access to technology, there are various
innovation requirements for the firm that must be addressed within due time to gain a
competitive advantage over its competitors in the future. Moreover, their innovations would
enable customers to build a strong bond and commitment towards this company. The innovation
requirements of Netflix in 2020 and beyond are as follows: Effective Filtration of Viewing Content: Netflix is one of the most creative firms when it
comes to presenting new contents for viewers. However, recently the company has faced
criticism from some of its viewers of their shows like “13 Reasons Why” and “Black
Mirror” for their disturbing contents. This really had a bad impression on their content
and people even started to dislike their television shows and movies. It is a serious
requirement for the firm to modify its process to be able to freely feature their content
with assurance of no negative feedbacks. They must introduce a feature right from the
beginning which blocks and flags disturbing content for young audience in a way that
they could not access the same even through other websites or applications. This would
require the firm to develop effective safety systems that eliminates the possibility of their
leak and illegal downloads on other websites using ineffective tools and methods.
Moreover, there must a completely different section that helps the firm in segregating this
content from that which is available. This way, it could ensure create more innovative
content and present it to the right audience and appropriate target market. This innovation
is beneficial for the users as now parents would be able to protect their children from
psychological disturbing contents and could guide them effectively through various
phases. The positive impact of this innovation on the industry would be that it could
freely cover various aspects. This would allow the industry to give effective and unique
content to their audiences which would increase the viewership and revenues.

 Interactive Content: In recent times, with such enhancement in technology and content
viewing, one of the most innovative manner in which customers could be engaged is
providing something which they have never experienced before (Souto, 2015). As
discussed in previous report, Netflix is planning to introduce a service by the name of
“Netflix U” which allows the customers to mould their content in various different
options that are mentioned on their screens. This is one of the major innovations that
would also increase their viewership all over the world. This is because viewers would
stream the same content all over again to peek into other options as well that would
provide them more services than standard. In addition to this, interactive content could be
a viable long-term strategy for the firm to stay on the top of the market for a fair share of
time (Brunswicker and Vanhaverbeke, 2015). Giving users power to shape up their own
content would allow the industry to engage them more. Multiple viewership would
ultimately help the industry gain a wide competitive advantage in SVoD than in other
forms of content viewing.
 Language Modulator: This new feature could allow Netflix to change the language of
their content in real time as per the language of viewer's region which would allow them
to hear the content as per their regional language. Another add on feature could be to
allow the customer to tap a certain word on the subtitles and get its meaning instantly. All
these features would allow the firm to penetrate deeper markets effectively till 2020 and
after that. With rise in Artificial Intelligence, this innovation would help the firm remove
the language boundaries for its customers in case their first language is not English.
Moreover, in this manner, the firm could produce its content in various other languages
and on more geographical locations which would be beneficial for its long term growth in
the market. More individuals would develop interest in content viewing and
entertainment industry could penetrate various regional markets which would be an
opportunity of developing more contents giving importance to regional cultures. Users
too would be able to view any content without inconvenience and be able to develop a
better understanding of the matter.
For these changes, Gantt Chart and Network Diagram are constructed in order to
effectively determine the timeline of each project.

Illustrati
on 1: Gantt Chart
Illustration 3: Gantt Chart
Illustration 2: Gantt Chart
Illustration : Gantt Chart

TASK 3
Future Innovation Capabilities of Netflix
It is crucial for Netflix to innovate its content, services and processes to ensure that it
sustains in the market and increases the level of services for the customers. With increase in
competition, it is imperative that Netflix Inc. keep innovating its services to provide better
customer experience and ensure their long term commitment towards the firm and its offerings
(Frow and et. al., 2015).
As for Netflix, a road map would help the firm in clearly estimate its innovation
capabilities effectively. Netflix's road map is briefly discussed below which would help the firm
in implementing this change in their organisation: Suggestion: Change is imperative and inevitable for future growth of a company. Out of
the mentioned innovations, the one which truly convey Netflix's innovation capabilities
would be Language Modulator. Reason: The reason behind opting this change would be that such feature would help the
firm in gaining customer attraction and their experiences could be enhanced more
effectively. Moreover, this change would allow the firm to utilise technology in a more
advanced and useful manner which would be better for the company in long run
(Rothaermel, 2015). Impact: Every change, whether its small or big, affects the organisation and its
operations. Language Modulator too will affect the company's working in various
departments and aspects which are discussed as under:
▪ R&D: The major impact of any change is experienced on the R&D department of
any organisation. Netflix's R&D, for this innovation, will have to perform
extensive research of various regional and national languages that are immensely
used and followed by large number of individuals. Moreover, they are also
required to search the resources, forms of automation and AI technology and
language conversion methods by which this feature could be developed and
implemented in a successful manner.
▪ Technical Skills: To develop any feature, it is essential that effective technical
skills be possessed by organisation's employees. To develop a feature like
Language Modulator which requires real-time interface, the employees that the

firm would hire for the project must possess effective knowledge about software
like “espeak”, which is an effective speech synthesizer software used to convert
languages (espeak: A multi-lingual software speech synthesizer, 2018). Along
with this, the employees must be well affiliated with Artificial Intelligence and
other management and scientific skills too.
▪ Resources: Where standard production is concerned, there is limited or no effect
on the resources. However, during change in the organisation, the material and
resources that are required have a wide impact of the innovation. For Language
Modulator, the firm must have complete access to multiple languages along with
various technologies like AI that could effectively govern the process and correct
interpretation of the languages by the modulator (Jansen 2017). Another type of
resource would be Human Resources, i.e., technical staff that would apply their
skills and knowledge to help complete the process. Moreover, the other resources
that would support the project would be financial resources for effectively
purchase materials and hire staff for implementing this innovation.
▪ Legal Compliance: There are various legislations for a project that must be
considered by Netflix to develop Language Modulator. For instance, the firm
must comply with the Employment Legislations which would allow it to retain
and fully utilise the human resources for this project without violating their rights.
Another legal aspects during this process must be to protect the intellectual
property. The best way to achieve that is to acquire a patent and copyright of this
feature which would allow it to protect its real-time Language Modulator from
any sort of online theft or infringement.
▪ Cost: Any change in the organisation is subjected to some sort of changes in cost
and budget which fulfils the financial requirement of the innovation. Language
modulator too would impact the cost that is required to be generated by the
company. This is described below:
Expenses Amount
Research &
Development 15500
Materials 336000

Marketing 19000
Advertising 23000
Human Resources 27000
Total 420500
As per the above estimate, US$420,500 would be required by Netflix to develop, market
and implement Language Modulator in the market. The investment made by Netflix on this
project would undertake all the major aspects where the main focus would be on the materials
required to develop this modulator. A total cost of US$336,000 includes the equipments,
technology and various software which would be purchased by Netflix to effectively complete
this project within due period. Moreover, standard methods of marketing and advertising would
be used which would cost the firm approximately US$19,000 and US$23,000 respectively. Feasibility: After Netflix determines the cost of the project, the next step would require
the firm to analyse how feasible Language Modulator is for the firm. It is a necessary step
of the road map which helps the firm in determining the overall impact of the change in
the organisation as well as estimation of its return (Ferreira and et. al., 2015). Feasibility
of Language Modulator in Netflix would be judged on three factors mentioned below:
▪ Technological: One of the most important factors upon which the firm would
determine the feasibility of this project is how technologically feasible it is to the
firm. Artificial Intelligence along with software for language synthesising would
be used which could effectively be developed as well as purchased by the firm.
As per the customers are concerned, real time technology would provide them
ease in understanding the content as well as various typical terminologies which
they are not aware of. This would allow the firm to penetrate regional markets
effectively.
▪ Operational: With enhanced use of automation and Artificial Intelligence,
Language Modulators would be technologically feasible for Netflix. This is
because AI would effectively measure and interpret the effectiveness of the
system with consistent and authenticated recommendation for improvements. In

this way, the firm would save its time and efforts for its effectiveness and
functionality.
▪ Economical: The most crucial factor of measuring the feasibility of any change is
judging its economical impact on the organisation. Language Modulator would
allow the firm to remove the cost of activities like dubbing as AI would
effectively convert and modulate the language according to the pitch and tone of
the actors. This is one of the most effective ways in which Netflix could be
financially benefited from this innovation. Approval: Once all the factors has been analysed and information collected, next step is
to take approval from the board of directors in order to implement the plan. As they are
the key person of organisation and decision are taken by mutual concern. Therefore for
taking approval, Netflix is required to arrange formal meeting of board of directors in
order to present this innovational plan of “Language Modulator” in front of them and
taking their approval regarding further process. In addition to this, after taking approval
from board of directors, Netflix have to take approval from government also. As it is
planning to add a new feature of multi language modulator which requires the acceptance
of government before working over this project and commercialising it. Application: After getting the plan approved from board of directors and government as
well, next task is to step ahead and implement the plan into action. For this Netflix should
arrange all the required resources that are being identified in previous steps which
includes hiring the technical staff, purchasing of equipments and software. So the
innovational plan can be implemented effectively. In addition to this, various methods
such as language testing tools and real-time interface software must also be implemented
that could measure its effectiveness.
 Review of Change: After innovational plan has been processed the next step in road map
is to review the outcome of work done under this plan. This is most essential factor as it
evaluate the final outcome of plan to determine whether the new innovation will be
successful after commercialisation or not. For reviewing this innovational plan a mock
test will be conducted by the technical expertise team where the final software assessed.
This help in determine that whether the innovational implementation is successful or

require some modification before final launch. This test also help in identifying the
reliability and sustainability of project when it went for final launch.
CONCLUSION
From the above given information it can be summarized that innovation plays a
significant role within the success or sustainability of a company at marketplace. As by bringing
regular innovation in current product will help company in maintaining its market share and
loyal customers which in turn will help them in achieving competitive advantage over rivals.
Entertainment industry is a growing industry which regularly experience new innovation done by
key market player for improving the current services and experience of customers. Hence the
competition is relatively higher which requires companies belong to entertainment industry
regular innovate their process or services for maintaining their market share. The future of this
sector is very bright as it is growing continuously and various other innovations are expected to
be experiences in near by future. These are Artificial Intelligence, Automation Technology and
Visual Effects.
But in order to implement these innovational effectively companies must use road map
which provide the step by step execution of innovational plan which provide the positive
outcome when being commercialised at marketplace. Road map help in selecting the valid option
for implementing innovation then determining the changes required to implement in organisation
for performing the operations toward implement of innovation.

REFERENCES
Books and Journals
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Ferreira, J.J., and et. al., 2015. Drivers of innovation strategies: testing the Tidd and Bessant
(2009) model. Journal of Business Research. 68(7). pp.1395-1403.
Frow, P., and et. al., 2015. Managing co‐creation design: A strategic approach to innovation.
British Journal of Management. 26(3). pp.463-483.
Jansen, W., 2017. New business models for the knowledge economy. Routledge.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education,.
Souto, J.E., 2015. Business model innovation and business concept innovation as the context of
incremental innovation and radical innovation. Tourism Management. 51. pp.142-155.
Trevino, L.K. and Nelson, K.A., 2016. Managing business ethics: Straight talk about how to do
it right. John Wiley & Sons.
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