Search

The Culture Connection and the Future of Netflix

Becoming a dominant force in any industry is a challenge. Staying the dominant force in any industry is almost impossible. When you think of any major product or service, a few major brand names may come to mind. As of 2021, the Japanese construction company Kongō Gumi, founded in 578 C.E is the oldest existing company worldwide, and has operated for around 1443 years (Statista.com). You may not recognize this one. If you look at the largest companies in the world today, you'll find many you recognize such as WalMart, Apple, Amazon, and CVS Health to name a few. When we think of these companies and their brands, we usually think of their value to us and perhaps our loyalty (or the lack thereof) to them. The research on "brand loyalty" is vast with many competing theories and methodologies on how best to gain and retain such trust from customers. More recently, brands are becoming highly reactive to socially conscious concerns and their own back yards. I'll spare you the growing list of all-too-public events in that regard. The latest giant taking its turn on the never-ending merry-go-round of doubt in the world of dominance is Netflix. Is there something here that merits our attention? Most likely. It's almost certainly the connection among value, loyalty, and trust which are all aspects of...you guessed it...organizational culture.


It's not everyday you see a dominant player in any field lose $54 billion, in a day. Naturally, the long list of why this happened with Netflix began to hit mainstream and social media. Increasing competition for streaming services, lifting of the pandemic restrictions, subscription sharing, and even leaving the Russian market were all included as culprits. Some pointed to deeper issues within Netflix claiming they had left their more disruptive model on creating content and become too much like Hollywood. A big part of their early success was their algorithm aligning the content they licensed or created with their viewers. This created a customized experience and a unique value. That value fostered loyalty, which led to ever more subscribers. I'm not jumping on any particular bandwagon of causality leading to their substantial loss of subscribers. Like most phenomena, I suspect it's the combination of many variables. What caught my attention on this event was the same "shift or shrink" perspective I've been emphasizing for most industries today.


What happens over time as disruptors change the value assumptions of consumers in any market is that those very disruptions become "new norms." Subscribers got what they wanted (driven by an algorithm) when they wanted it and others took notice. AOL, Comcast, Facebook, MSN, Myspace, and Yahoo joined forces to create Hulu. HBO and major networks began to shift their models of content provision as they watched Netflix thrive. The content wars scaled again as Disney, Amazon, Apple TV, Comcast's Peacock expanded licensing and production. Hollywood itself began to take more gambles on smaller productions and shifted their strategies as the competition for viewership continued to morph to "membership." And there it is...a new assumption. Today, it's less about a singular event of going to a movie (which still thrives in a hit-and-miss model). Today it's about membership. And membership, is about loyalty.


The lesson of late as we continue to watch the fortunes of Netflix is one of loyalty. People are loyal to culture, not strategy. Culture is driven by the assumptions, values, and celebrations of a given group. These are the very tenets of Organizational Culture Harmonics (see anaveno.com). In Fields' (2013) survey of how we measure work in organizational research, he tells us that the person-organization fit assumes that "...attitudes, behaviors, and other individual-level outcomes result not from the person or environment separately, but rather from the relationship between the two." We cannot separate Netflix from the characteristics of its members. They will only remain loyal as long as their values align with those values of Netflix as an organization. Whatever organization you are a part of, whatever role, your alignment with its culture is paramount.


We look to our entertainment as sources of escape as well as alignment with our values. Artificial intelligence embedded in social media and throughout our lives today looks across millions of data points to align our interests and preferences as reflections of those values. This is not a journey of self-indulgence. This is a journey of culture, as we exist across a "harmonic range" of alignment with our world and others. That "harmonic alignment" is the basis of Organizational Culture Harmonics, a system that can show you your quantitative position in your personal life (mydailyharmonics.com) as well as your position relative to your organizational culture (cultureharmonics.com). Using psychometrics (quantitative measurement practices in psychology, education and the social sciences), we can better understand complex phenomena such as organizational culture, loyalty, and membership. Whatever the future of Netflix is, it cannot be separated from the preferences of its members. The future of your organization is no different. If you are not quantifying and "mapping" the preferences of your members whatever your business or industry, you may well find yourself in a similar situation.


Nothing is more noble, nothing more venerable, than loyalty.” —Marcus Tullius Cicero


If you'd like to learn more about "Organizational Culture Harmonics" and culture mapping, visit anaveno.com or contact Dr. Stephen Dunnivant sdunnivant@gmail.com


REFERENCE

Fields, D. L. (2013). Taking the measure of work: A guide to validated scales for organizational research and diagnosis. IAP Publ.






3 views0 comments