How Netflix has changed the global entertainment industry (2023)

  • Dominant streamer Netflix is rewriting the playbook for global entertainment.
  • The company drove other major media conglomerates to launch streaming services of their own.
  • As it faces headwinds, Netflix has launched an ad tier and entered the video game market.

Since Netflix began its worldwide expansion in 2016, the streaming service has rewritten the playbook for global entertainment — from TV to film, and, more recently, video games.

Hollywood used to export most global hit series and movies. Now, thanks to Netflix's investments in international TV and film, programming like South Korea's "Squid Game," Spain's "Money Heist," and France's "Lupin" are finding massive audiences around the world. And its English-language original series, such as Shonda Rhimes' "Bridgerton," Ryan Murphy's "Dahmer" and Tim Burton's "Wednesday," have continued to break Netflix's internal streaming viewership records.

But the streamer is in the midst of a reality check, epitomized by its first quarterly subscriber loss in a decade, hundreds in layoffs in 2022, a halved stock price and the sense among employees that Netflix's famed corporate culture has soured somewhat. The squeeze has led the company to look more closely at new avenues for revenue and subscriber gains, such as an ad-supported version of the platform — which it had long dismissed — and a pending crackdown on password sharing.

Still, Netflix's impact on the global TV industry is undeniable.

How Netflix disrupted the global TV industry

The streamer figured out that to thrive on an international stage it needed both US mass-market programming like "Stranger Things" as well as local content that could win over viewers in specific markets (and produce breakout hits).

(Video) How Netflix Changed Entertainment (Forever)

The strategy helped the streaming service grow its customer base to 214 million global paid subscribers, as of September.

Its momentum also reinvigorated production in places like Germany, Mexico, and India, as companies like Amazon, Disney, WarnerMedia, and Apple follow Netflix's lead.

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The streamer's executive team was rebuilt with a global focus

In recent years, Netflix reoriented its leadership around its new global model.

The streaming company, cofounded by tech entrepreneur Reed Hastings, promoted content chief Ted Sarandos to co-CEO in 2020, which cemented the status of content within the organization.

Meanwhile, Bela Bajaria, who had been in charge of international non-English TV, took the reins of the overall TV business, and product chief Greg Peters took on additional duties as COO, including streamlining how global teams work together. Peters also hired a new talent chief with international experience, former PepsiCo executive Sergio Ezama, to lead Netflix's global workforce.

(Video) How Netflix Changed TV

The company also formed an elite team of 23 interdisciplinary execs to help make its biggest decisions. Known internally as the "Lstaff" — the "L" stands for leadership — the group sits between the company's officers and its larger executive corps of vice presidents and above, who are called the "Estaff."

After announcing in the spring that it would explore introducing a cheaper ad-supporter tier to help combat slowing subscriber growth, Netflix in August brought on board Snap executives Jeremi Gorman and Peter Naylor to lead its new ad sales business.

The pivot in focus to the ads space has meant a higher profile for Peters, who keeps a low profile but has been speculated to be a contender for CEO, should Hastings and Sarandos consider a succession plan.

More on Netflix's corporate structure:

  • Meet the Netflix exec who's leading its disruptive new ads business strategy — and could be CEO one day
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  • The top HR execs at Hollywood companies like Netflix and NBCU
  • The top data science execs at Netflix, Disney, WarnerMedia, and more Hollywood companies
  • Netflix salaries revealed: How much engineers, marketers, content execs, and others get paid

Netflix has seen its first wide layoffs, though it continues to grow

The corporate restructuring hasn't been without obstacles. The company in April laid off 25 full-time staffers in its marketing department, which included the dismissal of some writers at recently launched fan site Tudum, followed by another 150 cuts in May and the elimination of 30 animation jobs in September. Layoffs for the year have impacted at least 450 full-time Netflix staffers and dozens of contractors as the broader media and entertainment space grapples with a bear market.

Still, the company's growth has generally made it a desirable place to work in recent years, despite some tests its corporate culture has faced. Public US work-visa data shows that Netflix, which says its pays staffers "market value," has offered six-figure annual base salaries for lots of roles in engineering, content, marketing, finance, and more.

(Video) How Netflix changed entertainment -- and where it's headed | Reed Hastings

More on Netflix's business model and corporate culture:

  • Netflix insiders describe a culture shift to 'fear-based' decision making, execs stretched thin, and belt tightening amid layoffs and subscriber losses
  • Netflix insiders reveal 'contentious' debates over how data drives creative decisions, and why beloved series don't always get renewed
  • Netflix says password sharing is hurting growth as it loses subscribers for the first time in a decade
  • What Netflix's sudden embrace of ads could mean for its brand deals
  • Netflix spending cuts fuel fears that its golden creative age is over
  • Netflix lays off Tudum writers months after 'aggressively' recruiting them for new fan site

Netflix's next frontiers include advertising and gaming

Netflix is facing more competition than ever from an influx of rivals that are learning to play its game.

Nearly every major media company, from Disney to Apple to Warner Bros. Discovery, now runs a streaming service. Their platforms are stockpiled with tentpole movies and TV shows that used to only be found in theaters or on linear TV, and their libraries now rival Netflix's, particularly as they claw back programming that had been previously licensed to Netflix.

The competition is pushing the streaming giant to keep evolving.

Netflix has expanded into podcasting and started peddling merchandise for series like "Squid Game" and "The Witcher."

The streamer's new ad tier launched in the U.S. in November for $6.99 a month, a steep discount to its ad-free standard tier that costs $15.49 a month.

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Some TV writers were disappointed by the move into ads, with creators worrying that Netflix will take fewer risks on programming in order to please advertisers.

The company is also bringing video games into its mobile streaming app.

It hired in July 2021 Facebook's former head of Reality Labs, Mike Verdu, as its vice president of game development, and has been hiring for other video-game-related jobs.

The streamer plans to approach gaming like it did movies and TV shows. It's starting slowly by commissioning and licensing mobile games, some of which are based on existing franchises like "Stranger Things." It plans to experiment with other kinds of video-game storytelling, as it did with its original series.

In May, it plans to release both a game and animated series based off the same franchise, the "Exploding Kittens" card game, which will be a first for the platform.

"Maybe someday we'll see a game that spawns a film or a series," Peters, the operating and product chief, told investors in July. "That would be an amazing place to get to and really see the rich interplay between these sort of different forms of entertainment."

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More on Netflix's advertising and gaming ambitions:

  • Netflix is entering a new era with ads. Here's how marketers and brands could influence the programming you see on the streamer.
  • Netflix has launched its ad-supported tier — here's everything we know about how the streaming giant is pitching advertisers
  • Why Netflix could still win at advertising despite missing campaign viewer targets
  • I tried Netflix's new mobile video games. They're a work in progress, but lay the groundwork for bigger ambitions.
  • Why Netflix's new video-game strategy will live or die by how well it can create mega movie and TV franchises
  • Netflix is doubling down on gaming, with dozens of new hires and a dedicated studio, as it chases younger audiences and battles to turn back subscriber losses


How did Netflix change the entertainment industry? ›

Content creation: Netflix has shifted its focus from acquiring content to producing original content. The company has invested heavily in the production of its own series, films, and documentaries, giving it a unique and differentiated offering in the market.

Has Netflix made television watching more global? ›

Netflix today offers streaming services in more than a hundred and ninety countries. According to one study, in the third quarter of 2022 alone it released more than a thousand episodes of original streaming television globally—at least five times the number of any other streaming service.

How does Netflix change the entertainment preference of the people? ›

Netflix's AI-powered algorithm creates personalized recommendations for each user based on their preferences, watch history, ratings and demographics. The recommendations are usually incredibly accurate.

How has streaming changed the entertainment industry? ›

Streaming services like Netflix, Amazon Prime Video, and Hulu have revolutionized the entertainment industry by offering viewers the ability to watch their favorite movies and TV shows whenever and wherever they want.

What has Netflix done to society? ›

Rediscovering the past. In fact, whether it's a reboot, remake or original, revisiting old TV shows and movies brings all kinds of feels. Netflix has capitalised on this by giving us cultural throwbacks and a sense of nostalgia, while allowing viewers to discover times they never lived in.

How did Netflix impact popular culture and society? ›

Since the adoption of its streaming media service, Netflix has had a huge impact on culture and the way in which people view television today. On the positive side, it has allowed consumers to become more empowered. People now have a choice in what they watch and when they watch it.

Why was Netflix successful in its global expansion? ›

Ultimately, by understanding the needs and preferences of its target market, Netflix was able to create a service that people loved. And by making their content accessible to as many people as possible, they were able to rapidly conquer foreign markets.

What are the positive effects of Netflix? ›

First, it offers an affordable monthly subscription that gives users access to a large library of TV shows and movies. Second, it's convenient. Users can watch whenever they want, and on any device with an internet connection. Third, it's personalized.

How has Netflix overcome cultural differences to create a global brand? ›

First, Netflix developed local programming to appeal to specific international markets. To maximize efficiency, Netflix ensured these programs appeal to markets outside their home country. Netflix also invested in increasing local language options for its interface, subtitles, and dubbing.

How technology is changing the entertainment industry? ›

The graphics quality of video games has improved dramatically, and consoles, Dolby audio, and other technology have made gaming better. Moreover, the advent of globalization has enabled individuals to access high-speed Internet from anywhere in the world via their mobile phones.

How do entertainment platforms like Netflix recommend their content to us? ›

Rows, rankings and title representation

In addition to choosing which titles to include in the rows on your Netflix homepage, our system also ranks each title within the row, and then ranks the rows themselves, using algorithms and complex systems to provide a personalized experience.

What is Netflix's position in the industry? ›

Market Share Over Time

In Q1 2023, Netflix maintained its position as the leading streaming platform in the US with a market share of 44.21%, down 5.56% from its market share of 49.72% in Q1 2022 when compared to leading platforms.

What is Netflix international strategy? ›

Netflix followed a very well structured International strategy by planning their mission statement which is mainly directed to end users. “For one low monthly price, Netflix members can watch as much as they want, anytime, anywhere, on nearly any Internet-connected screen.

How has live streaming changed the world? ›

Live streams have contributed to the changing ways people consume news. As streams become easily accessible through social media or other platforms, people are becoming more informed than ever before. In the past, people needed to have a television cable or a newspaper subscription to read about what was happening.

What has Netflix done to be innovative? ›

Evolved over ten years, freedom and responsibility are seen as a gateway to creativity. In 2006 Netflix launched an open innovation challenge to the public called Netflix Prize. This aimed to find a filtering algorithm that improved user movie and series suggestions by 10% compared with its platform at the time.

Why is Netflix better than other streaming services? ›

Editor's note, Dec. 1: Due to its features, user-friendliness, and robust, variety-filled catalog, Netflix has earned an Editors' Choice Award for 2022. With the addition of an ad-based subscription, the platform is on equal footing compared to competitors like Disney Plus and HBO Max when it comes to pricing.

How does Netflix impact community? ›

According to reports, teens, adults, and even children are being impacted by the “Netflix Effect.” The disadvantages for teens who binge watch television include slipping grades, being late to work or class, not going outside to be active thereby gaining weight, and closing themselves off from having a social life.

How does the Netflix culture contribute to the success of the company? ›

Netflix values the most employees who are self-aware, honest and don't act from their ego but for the good of company. You must hire leaders and employees who are honest with themselves first, and then with others if you want to establish a really collaborative workplace and a performance-driven team.

Why are Netflix so good in social media? ›

Besides tracking their brand mentions, Netflix also uses social listening to stay up-to-date with the latest trends and conversations in the entertainment industry. By staying current and in tune with their audience, they're able to create content that ultimately drives engagement.

Does Netflix have an innovative culture? ›

We at Netflix have to embed certain guiding principles into our innovative culture. One of those principles is always to be curious. Curiosity, curiosity, curiosity!

Which of the 3 global strategies is Netflix implementing? ›

Taken together, the elements of Netflix's expansion strategy constitute a new approach that might be called “exponential globalization.” It's a carefully orchestrated cycle of expansion, executed at high speed, to an ever-increasing number of countries and customers.

What is Netflix biggest innovation? ›

The biggest radical innovation of Netflix is when Netflix transformed from a DVD rental service into an online streaming platform. This means that customers no longer had to wait for their DVD to be delivered, as they were now able to watch Netflix content through its online streaming platform.

How is Netflix related to globalization? ›

Netflix is now working on producing global original content which can be distributed around the world by constantly adapting it to the local environment. They cannot rely on a large library of proprietary content to feed its 204 million paid members in over 190 countries.

What challenges does Netflix face in its push to expand globally? ›

Yet Netflix and its efforts to expand overseas are facing a series of challenges that could hamper future growth, including patchwork regulatory restrictions worldwide and stiff competition in individual countries from services that are attracting viewers like Mr. Díez Ferreira.

What is Netflix competitive advantage and why is Netflix so successful? ›

Answer & Explanation

Why is Netflix so successful? Netflix's competitive advantage is its ability to provide an expansive library of on-demand content that is easy to access and convenient to use. Netflix has a large library of content with a wide variety of genres and formats, making it attractive to a large audience.

What are the positive impacts of entertainment technology? ›

Positive emotions, including humor, contribute to a sense of well-being and health. Video gaming can be beneficial for brain development and functioning. The positive effects of video gaming may also prove relevant in therapeutic interventions targeting psychiatric disorders, particularly depression.

Why has entertainment changed over time? ›

What is produced and becomes popular is heavily influenced by people's tastes and what is acceptable at the time. Another consideration is the state of technology at the time. These shifts affect music, television, and movies.

Why have the forms of popular entertainment changed over the years? ›

Most forms of entertainment have persisted over many centuries, evolving due to changes in culture, technology, and fashion, for example with stage magic. Films and video games, although they use newer media, continue to tell stories, present drama, and play music.

How did Netflix become so popular? ›

While many analysts doubted the viability of Netflix's subscription-based model in 1999, this was key to the company's success because it positioned Netflix as a service where you could watch as much as you want, as opposed to paying per rental. This was the real innovation behind much of Netflix's early growth.

Is Netflix the most popular streaming service? ›

Netflix still dominates as the most subscribed to video streaming service, with 231 million subscribers.

How is Netflix perceived? ›

In total, 62% of U.S. video-on-demand users say they like Netflix. However, in actuality, among the 94% of U.S. respondents who know Netflix, 66% of people like the brand.

Why is Netflix so popular in us? ›

Due to the low-price, high-revenue philosophy, Netflix turned out to be an affordable and reliable source of fun for the entire family. The key point of this strategy is to keep the price of a single package low, and the high revenues will come as a result of numerous subscribers.

How successful are Netflix recommendations? ›

That 80% success rate keeps subscribers happy. Essentially, Netflix believes it could lose $1 billion or more every year from subscribers quitting its service if it didn't use the Netflix Recommendation Engine.

How is Netflix different from its competitors? ›

Do you know what sets Netflix apart from other streaming video services? Netflix's powerful metadata-based recommendation algorithm enables it to segregate the content depending on the history of users' choices and then offer them with most chosen innovative features.

What problem does Netflix solve? ›

Netflix founders Reed Hastings and Marc Randolph wanted to bring customer-centricity to the video rental market. At the time, renting videos was inconvenient and costly, with customers often plagued by expensive late fees. They created an entirely new way to watch movies and consume content.

What is Netflix's main focus? ›

At Netflix, we want to entertain the world. Whatever your taste, and no matter where you live, we give you access to best-in-class TV series, documentaries, feature films and mobile games. Our members control what they want to watch, when they want it, in one simple subscription.

How has Netflix expanded globally? ›

The platform started in the United States and expanded for the first time in 2010, to Canada. This marked the beginning of a long expansion process. By 2015, Netflix was operating in 50 countries. Today, Netflix is in over 190 countries, and has drastically increased their rate of expansion in the last five years.

How Netflix changed lives? ›

Netflix also introduced us to binge-watching. Before Netflix made all episodes of its shows available at once, people didn't tend to watch more than one episode a night. Now that they can watch as much or as little as they like, they often have no desire to stop watching a show until they've seen all of it.

Why are streams so important to society? ›

Streams provide many benefits to humans. Besides providing drinking water and irrigation for crops, streams wash away waste and can provide electricity through hydropower. People often use streams recreationally for activities such as swimming, fishing, and boating. Streams also provide important habitat for wildlife.

What is the impact of streaming? ›

If one streaming hour equates to about 100 grams of CO2 equivalent and we're streaming for almost 12 hours a day, that's still extensive: 1,200 grams of CO2 equivalent per day. That's the equivalent of driving three miles or charging 146 smartphones.

Which industry did Netflix revolutionize? ›

Which industry did Netflix revolutionize? Netflix revolutionized the movie rental industry.

How did Netflix become disruptive innovation? ›

The company got into video streaming services, but video rental service providing giants like Blockbuster were slow to respond. Subsequently, streaming services took over both rental and mailing services, and the market tipped, making Netflix disruptive innovation poster child.

Why did Netflix become so popular? ›

At first, Netflix was just shipping DVDs through the mail and later they eliminated late fees that greatly lead to Blockbuster's crush. With the passage of time, they moved up from mailing the content to streaming movies and TV shows in good quality.

Who has the largest development deal in television history with Netflix? ›

Netflix didn't stop there. It next signed up Glee and American Horror Story showrunner Ryan Murphy in a five-year deal worth $300 million, which was quickly dubbed “the richest producing deal in television history.” Then the company nabbed Black-ish creator Kenya Barris for $100 million over three years.

What did Netflix do that was innovative? ›

In 2006 Netflix launched an open innovation challenge to the public called Netflix Prize. This aimed to find a filtering algorithm that improved user movie and series suggestions by 10% compared with its platform at the time.

What was Netflix's innovation strategy? ›

Innovation strategy refers to a company's plan on how it will achieve its objectives, such as increasing profits or market share through the innovation of products or processes. The Netflix innovation strategy focuses on maximizing its competitive advantage through its product and process innovations.

What industries did Netflix disrupt? ›

1 By creating compelling original programming, analyzing its user data to serve subscribers better, and above all by letting people consume content in the ways they prefer, Netflix disrupted the television industry and forced cable companies to change the way they do business.

How Netflix uses technology to improve their business? ›

Netflix customizes its data recommendations for each customer. A single Netflix account may be used in two distinct locations, but you will be shown different recommendations in each. Netflix AI is responsible for this function. The algorithm learns on its own and continues to gather information.

What is the biggest advantage of Netflix? ›

With Netflix, you can watch as much content as you want, eliminating the need for pay TV channels and satellite broadcasts. In addition, you can watch it not only on TV but also on your computer, smartphone or tablet, so you can enjoy it anywhere.

What problem did Netflix solve? ›

Netflix founders Reed Hastings and Marc Randolph wanted to bring customer-centricity to the video rental market. At the time, renting videos was inconvenient and costly, with customers often plagued by expensive late fees. They created an entirely new way to watch movies and consume content.

Is Netflix one of the world's leading entertainment? ›

Netflix is one of the world's leading entertainment services with 233 million paid memberships in over 190 countries enjoying TV series, films and games across a wide variety of genres and languages.

Where is Netflix most successful? ›

The United States is not only the place where Netflix got its start as a DVD rental service in 1997, but the country also remains Netflix's largest market now that the company has evolved into the most popular SVOD platform worldwide.

Was Netflix change successful? ›

Netflix, a leading provider of streaming video content, knows this well. In 2011, the company made a drastic change to its business model that upset many of its customers. However, thanks to careful planning and execution, the change was ultimately successful and resulted in increased profits for the company.


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