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Netflix target audience , what are the key principles of netflix marketing, marketing strategy of netflix, digital marketing strategy of netflix, 5 key takeaways from netflix marketing approach, conclusion , a case study on netflix marketing strategy.

A Case Study on Netflix Marketing Strategy

Netflix was founded in 1997, offering online movie rentals with less than 1000 titles. Soon, it switched to the subscriber-based model, and in 2000 Netflix introduced a personalized movie recommendation system. By 2005 Netflix had over 4.2 million subscribers and started work on a video recommendation algorithm. And finally, in 2007, Netflix began its streaming services and original content creation. By 2016 Netflix had over 50 million subscribers; the story continues today as it is a worldwide presence in the video-on-demand industry. 

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Netflix marketing strategy is undoubtedly a guide for digital marketers worldwide. It is a learning experience to know how this digital media streaming company outperformed all others in the market. 

Netflix's target market is young, tech-savvy users and anyone with digital connectivity. The audience of Netflix is from diverse age groups and demographics. 

However, most of the audience are teenagers, college-goers, entrepreneurs, working professionals, etc. Netflix aggressively works on content expansion and personalization to expand the user base. They separate the kids' and adults' audiences based on their maturity levels. 

Netflix is a fantastic example of an integrating marketing strategy . It is integrated, agile, and customer-driven to make the maximum impact. Netflix follows a customer-centric model to deliver a seamless experience. The platform follows integrated marketing for effective targeting and makes the best use of content marketing for data analytics. 

  • Customer-centricity: Netflix focuses on creating a solid connection with its customers by engaging them personally and personalizing their viewing experience. They also use clever marketing tactics to get people to watch their shows.
  • Integrated viewing experience: Multi-device and up-to-date no matter where you view it from, makes the experience combined.
  • Innovation: Modern marketers must use data analytics to create experiences that delight consumers. Netflix uses customer data analytics to get content recommendations because it knows which movies its customers like to watch. For example, if a Netflix user likes Rocky, it will also offer them sports documentaries. As you manage your business, you, too, need to use data analytics for effective marketing and website optimization.  

Netflix uses data-driven and customer-centric marketing strategies that work in the digital age. Netflix's success relies on constant analysis and optimization, so you can use these tools for marketing your business online.

Netflix's marketing strategy is a surefire example of innovation and modern-day technology growth. The platform has been eager to bring the changes per market need or user demand. The evolution of the marketing tactics from time to time is one of the core reasons behind its success. 

Netflix proves that a brand can connect with customers easily through regular analysis and optimization. Simply put, Netflix's advertising strategy is full of agility, data-collection, user-centricity, personalization, and dedication. Major and minor brands can follow such a strategy and boost brand exposure and market value. 

Let's walk through 5 effective strategies of Netflix's advertising strategy that led them to the most disruptive business model. 

1. Use Personalized Content

Netflix is an excellent example of how personalized content can improve user satisfaction. Netflix knows what TV shows and movies its users like to watch. It uses this information to create customized recommendations for them. This allows them to find the content they enjoy without searching through many lists. It also ensures that users are always getting the latest and greatest content. This level of personalization is critical for online users because it enhances their experience and makes them more likely to return to a site in the future. 

2. Ensure Multi-mode Experience

Starting with a DVD service, Netflix's journey has been successful because of its multi-device strategy. You can open Netflix on TV, computer, smartphone, and tablet with seamless content continuity being watched. The company shows zero restriction in meeting the customers wherever required. Netflix follows both online and offline promotion strategies to boost user engagement. Be it any medium; their marketing strategy remains aligned wherever it can work. 

3. Blend Technology With Marketing Tactic

You wouldn't find two Netflix accounts with the same interface or suggestions. The recommendation shows order is as per user activity and ever-changing. They change the artwork frequently to add a sense of newness. Netflix puts modern-day technology to good use. The platform keeps on having new features to gain maximum engagement. Machine learning is a proven technology trend to transform marketing research to the next level. The blend of ML into advertising is what helps Netflix Marketing Strategy. 

4. Target Emails Like Any Other Marketing Channel

It is wrong to say or consider that email marketing is dead. Netflix is one solid example of a company making the most out of email marketing. They are one step ahead and pairing the email campaigns with machine learning systems. It helps gather more user data and preferences—further, the data segments into multiple user groups for precise and effective customer targeting. So, email marketing can introduce Netflix to new users and show relevant recommendations to the old users. One essential tip from Netflix email marketing is to be creative and take risks. Those old boring emails wouldn't help get such an impact as Netflix today. 

5. Create a Buzz With Better Interactions

Netflix has used the best content marketing strategy in the last decade. The company thinks of an out-of-the-box way to grab quick attention from users. They are bringing standalone products and unmatched experiences. On top of everything, the platform has a seamless communication channel to boost momentary awareness and recognition. The platform allows the audience to be involved in the story and make decisions. This unpredictable move is a proven game-changer for revolutionizing future television. The incomparable buzz in the platform keeps the user stuck to binge-watching. The users feel high engagement in the hopes of finding a happy ending. 

Hence, Netflix happens to be a unique example and inspiration for many fellow companies. They have done a commendable job in content, branding, business model, and product. Netflix marketing strategy has a lot to offer to market enthusiasts and students.

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Netflix Product Strategy: A 2020 Case Study

case study of netflix

Gibson Biddle

Previous VP of Product at Netflix.

Table of Contents

Netflix was the world’s largest streaming service in 2020 with over 193 million subscribers and climbing. Software as a service (SaaS) companies took notice and wanted in on the secret sauce to Netflix’s product strategy.  

What was their secret to onboarding new users and customer success?

I’m going to share a few models to help you define your product strategy. Each of these models will be brought to life with a mock 2020 articulation of Netflix's product strategy .

But First: How Netflix Started

Netflix’s product vision began with a simple goal – to get big on DVD. When Netflix started out, they were a DVD rental company, and customers had DVDs delivered to them via postal services. Then, the company’s vision evolved to become a leader in the streaming market. Going digital enabled Netflix to expand worldwide. Having achieved all of the above, Netflix is currently placing a strong focus on original content.

What is a Product Strategy?

Product strategy is a key part of product-led growth (PLG) . It’s a plan that helps your company establish a specific product vision and how teams work together to successfully achieve it. 

Before we begin to explore Netflix’s product strategy, it’s important to understand why product strategy is so important and necessary. 

Firstly, a strategic product plan helps us to communicate an inspired vision of the future . It’s one thing to have an idea in your head, but you need the right strategies in place to help communicate that vision to others.

Secondly, combining innovation and invention is no easy task. Inventing new solutions and features can be chaotic, and it’s almost impossible to be innovative without any chaos. However, products change, and company decisions cannot happen at random. There must be discipline, and a product development strategy is effective at blending these two forces.

A product development strategy is about forming hypotheses to what I call the DHM model . In other words, you need it to delight customers and do so in a margin-enhancing way. 

Finally, you need a product strategy to help facilitate prioritization . We must prioritize some things over others, and having a strategy in place can help you to do that while also communicating a plan.

As product leaders, we can do anything, but we can’t do everything . 

3 Product Strategy Frameworks 

A product strategy framework is a guiding light for every department in your SaaS company. I want to briefly introduce three models for product strategy because I’ll be sharing (in later sections) how to put each to use in the context of Netflix’s 2020 product strategy. 

Here are three models (or frameworks ) to define your product strategy:

  • Get Big, Lead, Expand (GLEe) model is a product strategy model that helps provide a longterm vision. It’s about growing the company to get big in its first 5 to 10 years and then expanding into different chapters of growth later. 
  • Grow, Expand, Monetize (GEM) model helps different departments like marketing, finance, and Product teams to align with each other. How do you prioritize growth, expansion, and monetization?
  • Delight, Hard to Copy, Monetize (DHM) model is about delighting your users in hard-to-copy ways.  

three models to define your product strategy

The purpose of these models includes: 

  • Encourage people to think long-term
  • Build cross-functional alignment
  • Help people to form hypotheses to compete long-term 

Netflix’s Product Strategy Framework: DHM

If you’re a product leader, like Netflix in 2020, your main job is to delight customers in hard-to-copy margin-enhancing ways.

So, how did Netflix’s product leaders achieve this?

Netflix uses a DHM framework.

The company offers customers a very convenient service with a wide selection of movies and TV shows they can stream instantly anytime, anywhere. Customers can navigate Netflix’s selection very easily, and they get a lot of value for their money. Plus, Netflix offers customers a range of high-quality and entertaining original content.

How Netflix’s Product Strategy Increases Profits

A key part of Netflix’s product strategy is to increase profits so they can reinvest in making an even better product in the future. I refer to this as margin-enhancing and Netflix effectively increases profits in various ways.

Let’s take a closer look at the last point in the graphic above [– right-size original content investment. 

examples of margin-enhancing

Since Netflix wants to offer a wide range of movies and TV shows to suit all types of tastes and preferences, the company likes to invest in original content. However, they want to pay the right amount for this content. 

To do this as accurately as possible, Netflix predicts how many people will watch a certain TV show or movie and then line up the cost of investment with their prediction.

For example, Netflix predicted that 100 million people would watch their original series Stranger Things . Therefore, they were willing to invest $500 million in that series. The series Bojack Horseman was predicted to gain 20 million viewers, so the right-size investment in that show was estimated to be $100 million.

What Made Netflix’s 2020 Product Strategy Hard to Copy

In 2020, Netflix wasn’t the world’s biggest streaming service for nothing. It was very hard for other companies and streaming services to copy what Netflix did, and that made it difficult for competitors to compete.

Netflix is a trusted brand. You can trust Netflix to keep your personal details private. Their brand promise is “movie enjoyment made easy,” and they achieve this by providing viewers with personalized service and the freedom to watch on almost any device with an internet connection.

Here’s why Netflix is hard to copy:

  • Unique technology
  • Network effect 
  • Economies of scale

breakdown of the reasons why Netflix is hard to copy

The brand promise of Netflix is movie enjoyment made easy. The company is a movie subscription service that delivers fast, easy entertainment in a friendly, straightforward way. 

Netflix Product Team’s Priorities

The product team at Netflix prioritizes monthly retention as the company’s high-level engagement metric. The team prioritizes other metrics too, including growth and monetization.

GEM priority

When the COVID pandemic hit in 2020, movie theaters were closed, and more people had free time at home. The company’s product team focused on key high-level product strategies (see below):

Strategy, Metric and Tactics

Here’s an example of the Netflix 2020 rolling roadmap, which shows how Netflix is implementing each strategy every quarter:

2020 Rolling Roadmap

Netflix Case Studies

Now, let's look at some ways Netflix was able to win their users' attention by offering additional products.

Case Study 1: Netflix Party

Netflix Party (now Teleparty ) is a Chrome extension app that has become increasingly popular since COVID-19. It allows users to watch the same movie at the same time. They can even chat with each other while watching a movie or TV show. 

case study of netflix

In an isolated time, such as a lockdown during the pandemic, many people enjoyed using this Chrome extension to watch movies with friends and family long-distance.

But is this an idea that Netflix should execute itself?

In the past, Netflix has tried a few variations of social experiments, including Friends in 2009, Xbox Party Mode in 2010, and Tell a Friend in 2018. All three were killed off because not enough people used the features.

However, Netflix Party has proven to be quite a success. In 2020, the app grew from 500 thousand to one million in just 60 days and acquired 10 million downloads. This data shows a substantial proof of concept, making it a possible worthwhile investment for Netflix. But the question remains – will this delight in hard-to-copy, margin-enhancing ways?

Well, this extension is hard to copy, and it would take competitors years to mimic something of this scale. It has the potential to enhance profits via word-of-mouth and increase retention. 

Case Study 2: Auto-Cancel Inactive Members

Should Netflix auto-cancel inactive members ?

In 2020, one-half percent of Netflix members hadn’t used the service in the last 12 months. However, those members were still paying for the service despite rarely using it.

Some might argue that a better alternative would be to send those members an email notification alerting them to the fact they’ve been inactive for so long. The email could say something like, “Would you like to cancel?” Then, the user could decide whether they wanted to continue paying for the monthly subscription or cancel their membership.

If members say no, then their service would continue as normal. If they say yes, then their membership would be canceled. However, what happens to the members who don’t respond? Should their membership be auto-canceled?

In 2020, if Netflix were to auto-cancel all of the inactive members, the company would lose $100 million. Clearly, introducing the auto-cancel option was not a great way to enhance profits, as the company would be losing millions of dollars each year. But what about the delight and hard-to-copy side of their product strategy?

Offering the auto-cancel feature for inactive users may delight customers since Netflix automatically stops payments. The user could always rejoin if they choose to do so.

Auto canceling inactive Netflix users, in my opinion, would be a worthwhile strategy for Netflix to implement and here’s why:

Learnings from Auto-cancel

I think that product teams and product leaders can learn a lot from Netflix’s winning 2020 product strategy, which can help you make more strategic day-to-day decisions and implement product strategies that will help you reach your vision and goals.

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Netflix Five Forces Analysis & Recommendations (Porter’s Model)

Netflix Five Forces analysis, Porter, competition, buyers, customers, suppliers, substitution, new entry, streaming business case study

Netflix’s external environment is examined in this Five Forces analysis of competitive forces and external factors based on Michael Porter’s model. The company provides streaming services and movies, series, and games. Online business operations facilitate Netflix’s international market reach but also position the company against multinational competitors in the industry. This Five Forces analysis of Netflix accounts for the multinational operating environment and the factors of the five forces, namely, competitive rivalry, customers’ power, suppliers’ power, threat of substitution, and threat of new entry. Netflix’s long-term success depends on its competitive advantages and strategies for overcoming competitive pressures illustrated in this Five Forces analysis.

This Five Forces analysis indicates that competitive advantages and effective competitive strategies ensure the achievement of business goals that realize Netflix’s mission statement and vision statement despite competitive challenges in the industry. The achievement of the company’s goals and performance targets are subject to the five forces, but carefully designed strategies can successfully promote Netflix’s business growth despite competition in the entertainment and content streaming industry.

Summary: Porter’s Five Forces Analysis of Netflix

The external factors linked to competitors, customers, suppliers, substitutes, and new entrants create a challenging competitive environment for entertainment content streaming services. This Five Forces analysis of Netflix illustrates the following intensities of the five forces:

  • Competitive rivalry: Moderate
  • Buyer power: Moderate
  • Supplier power: Weak
  • Substitution threat: Moderate
  • New entry threat: Weak

Recommendations. This Five Forces analysis establishes the significance of competition and variables linked to subscribers in influencing Netflix’s competitiveness and strategic positioning. Although the industry has aggressive competitors, production capabilities and original content are competitive advantages that limit the impact of competition. The core competencies and competitive advantages detailed in the SWOT analysis of Netflix can provide support for strategic efforts to mitigate the effects of competitors, buyers, and suppliers assessed in this Five Forces analysis. For example, the company’s original movies and series help reduce its dependence on content suppliers or producers. It is recommended that Netflix further develop its content production capabilities to improve competitive advantages based on original content that attracts target customers. These competitive advantages mitigate the influence of media and entertainment competitors and limit the impact of customer/buyer power and the threat of substitutes.

Another recommendation is for Netflix’s diversification and product development strategies, which reduce the effects of the competitive challenges detailed in this Five Forces analysis. Netflix’s generic competitive strategy and intensive growth strategies include objectives for new products and business operations in addition to movies and series production and streaming. The company already offers games as part of its product development and diversification strategies. However, with the competition and buyer power in this Five Forces analysis case, it is recommended that Netflix continue developing more games to improve its position as a provider of gaming content that strengthens the popularity of its movies and series used as basis for such games.

Competition/Competitive Rivalry: Moderate

This component of Porter’s Five Forces analysis assesses the degree of competition and competitors’ impact on Netflix. The following external factors lead to the moderate force of competition on Netflix:

  • Low differentiation of streaming services
  • High differentiation of content producers
  • Subscribers’ moderate switching costs

Most streaming services are similar in function and types of content available. In this Five Forces analysis of Netflix, such a competitive condition strengthens rivalry by making it easier for viewers to transfer between streaming services. However, high differentiation of content producers reduces competitive pressure by discouraging viewers from transferring to other service providers that may not have the same content. For example, some Netflix originals are not available from streaming and content-producing competitors, like Disney , Sony , NBCUniversal, as well as YouTube ( Google (Alphabet) ), Apple TV Plus, Amazon Prime Video, Facebook (Meta) , and Microsoft Movies & TV (Films & TV). Netflix subscribers also experience moderate costs when switching to other streamers, such as additional membership or subscription fees and lack of access to some original content. As a result, many customers keep accounts with multiple streaming services. The strategic factors in this Five Forces analysis illustrate that competition is significant but limited because of original content that functions as a competitive advantage of Netflix.

Bargaining Power of Netflix’s Customers: Moderate

Customers’ influence on prices, profits, market share, and business performance is assessed in this component of the Five Forces analysis. The following external factors reinforce the moderate bargaining power of Netflix’s customers:

  • Small size of individual subscribers
  • Subscribers’ moderate price sensitivity

A subscriber’s payment is small and has insignificant individual impact on Netflix. In Porter’s Five Forces analysis model, this small size limits or reduces individual customers’ effect on the online company. Also, subscribers’ switching costs limit buyer power over Netflix. For example, switching may come with additional expenses and loss of access to the company’s original movies and series, which are a competitive advantage that discourages subscription cancellations. However, Netflix is subject to the price sensitivity of subscribers. The Five Forces analysis model considers this external factor as a contributor to customers’ bargaining power, as streaming competitors can use affordability as a competitive advantage. The external factor of price sensitivity is included in decisions for Netflix’s marketing mix (4Ps) , particularly strategies for pricing the streaming service. Overall, these factors enable moderate customer power in this Five Forces analysis case.

Bargaining Power of Suppliers: Weak

This component of Porter’s Five Forces analysis refers to suppliers’ influence on the cost of supply or inputs and, thus, Netflix’s business costs, performance, and competitiveness. The following external factors lead to the limited and weak bargaining power of suppliers over Netflix:

  • Large number of content producers
  • High switching costs for content producers/suppliers

Netflix’s most significant suppliers are content producers, such as local and multinational media and entertainment companies. Considering the uniqueness of each movie, series, or game, these suppliers have a high degree of differentiation. In this Five Forces analysis of Netflix, high differentiation is an external factor that increases the bargaining power of suppliers by making their content desirable and not easily replaced. However, the large number of content producers reduces their individual bargaining power. Furthermore, suppliers experience high switching costs in this Five Forces analysis case. For example, because of Netflix’s international market reach, many suppliers are unlikely to pull out of Netflix, although popular multinational entertainment producers can do so more easily. Netflix’s operations management ensures that the streaming service optimizes business performance while managing strategic concerns involving content producers and their weak bargaining power established in this Five Forces analysis.

Substitutes/Substitution Threat to Netflix: Moderate

The impact of substitution and the competitiveness of substitute products are assessed in this component of Porter’s Five Forces analysis model. The following external factors are responsible for the moderate threat of substitution affecting Netflix:

  • Moderate costs of switching to substitutes
  • Moderate availability of substitutes
  • Subscribers’ moderate propensity to substitute

Substitutes for Netflix satisfy customers’ entertainment needs. In this Five Forces analysis case, substitutes include live shows and performances, free TV channels, and content on discs, tapes, and other media. Although these substitutes offer entertainment, customers are only moderately likely to switch to them because of various costs, like additional spending and inconvenience, in contrast to the affordability and convenience of accessing online content from Netflix. Also, many substitutes have limited availability with inflexible schedules or locations. This external factor limits the substitution threat in this Five Forces analysis case. Moreover, many customers are satisfied with Netflix’s online content and streaming services and are only moderately likely to use substitutes, such as during moments of boredom or when seeking different activities. Overall, this component of the Five Forces analysis of Netflix establishes the moderate threat of substitution.

Threat of New Entrants/New Entry: Weak

This component of Porter’s Five Forces analysis assesses the likelihood of new competitors and their impact on Netflix’s prices, profits, and business performance. The following external factors lead to new entrants’ weak threat to Netflix:

  • Moderate cost of doing business
  • High supply chain costs
  • High cost of reaching critical mass for network effect

Netflix’s operations in the entertainment and content streaming industry involve moderate costs for developing and maintaining IT infrastructure. Also, developing original content is costly, while getting support and content from various media companies requires time and accompanying processing, business, and legal costs. These strategic factors reduce the threat of new entry in this Five Forces analysis of Netflix. Moreover, new entrants need to spend considerable time and capital before reaching critical mass, which is the point where they already have enough content and subscribers to easily attract more subscribers and content producers. This component of the Five Forces analysis establishes that new entrants pose a weak threat to Netflix.

  • Davis, S. (2023). What is Netflix imperialism? Interrogating the monopoly aspirations of the ‘World’s largest television network’. Information, Communication & Society, 26 (6), 1143-1158.
  • Gómez, R., & Munoz Larroa, A. (2023). Netflix in Mexico: An example of the tech giant’s transnational business strategies. Television & New Media, 24 (1), 88-105.
  • Netflix, Inc. – Form 10-K .
  • Netflix, Inc. – Long-Term View .
  • Netflix, Inc. – Top Investor Questions .
  • Sforcina, K. (2023). Digitalizing Sustainability: The Five Forces of Digital Transformation . Taylor & Francis.
  • U.S. Department of Commerce – International Trade Administration – Media and Entertainment Industry .
  • Wayne, M. L., & Uribe Sandoval, A. C. (2023). Netflix original series, global audiences and discourses of streaming success. Critical Studies in Television, 18 (1), 81-100.
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How Netflix Reinvented HR

  • Patty McCord

case study of netflix

When Netflix executives wrote a PowerPoint deck about the organization’s talent management strategies, the document went viral—it’s been viewed more than 5 million times on the web. Now one of those executives, the company’s longtime chief talent officer, goes beyond the bullet points to paint a detailed picture of how Netflix attracts, retains, and manages stellar employees. The firm draws on five key tenets:

Hire, reward, and tolerate only fully formed adults. Ask workers to rely on logic and common sense instead of formal policies, whether the issue is communication, time off, or expenses.

Tell the truth about performance. Scrap formal reviews in favor of informal conversations. Offer generous severance rather than holding on to workers whose skills no longer fit your needs.

Managers must build great teams. This is their most important task. Don’t rate them on whether they are good mentors or fill out paperwork on time.

Leaders own the job of creating the company culture. You’ve got to actually model and encourage the behavior you talk up.

Talent managers should think like businesspeople and innovators first, and like HR people last. Forget throwing parties and handing out T‑shirts; make sure every employee understands what the company needs most and exactly what’s meant by “high performance.”

Trust people, not policies. Reward candor. And throw away the standard playbook.

Sheryl Sandberg has called it one of the most important documents ever to come out of Silicon Valley. It’s been viewed more than 5 million times on the web. But when Reed Hastings and I (along with some colleagues) wrote a PowerPoint deck explaining how we shaped the culture and motivated performance at Netflix, where Hastings is CEO and I was chief talent officer from 1998 to 2012, we had no idea it would go viral. We realized that some of the talent management ideas we’d pioneered, such as the concept that workers should be allowed to take whatever vacation time they feel is appropriate, had been seen as a little crazy (at least until other companies started adopting them). But we were surprised that an unadorned set of 127 slides—no music, no animation—would become so influential.

  • PM Patty McCord was the chief talent officer at Netflix from 1998 to 2012 and now advises start-ups and entrepreneurs. She is the author of Powerful: Building a Culture of Freedom and Responsibility (Silicon Guild, 2018).

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How Netflix Became A Master of DevOps? An Exclusive Case Study

Find out how Netflix excelled at DevOps without even thinking about it and became a gold standard in the DevOps world.

case study of netflix

Table of Contents

  • Netflix's move to the cloud

Netflix’s Chaos Monkey and the Simian Army

Netflix’s container journey, netflix’s “operate what you build” culture, lessons we can learn from netflix’s devops strategy, how simform can help.

Even though Netflix is an entertainment company, it has left many top tech companies behind in terms of tech innovation. With its single video-streaming application, Netflix has significantly influenced the technology world with its world-class engineering efforts, culture, and product development over the years.

One such practice that Netflix is a fantastic example of is DevOps. Their DevOps culture has enabled them to innovate faster, leading to many business benefits. It also helped them achieve near-perfect uptime, push new features faster to the users, and increase their subscribers and streaming hours.

With nearly 214 million subscribers worldwide and streaming in over 190 countries , Netflix is globally the most used streaming service today. And much of this success is owed to its ability to adopt newer technologies and its DevOps culture that allows them to innovate quickly to meet consumer demands and enhance user experiences. But Netflix doesn’t think DevOps.

So how did they become the poster child of DevOps? In this case study, you’ll learn about how Netflix organically developed a DevOps culture with out-of-the-box ideas and how it benefited them.

Simform is a leading DevOps consulting and implementation company , helping businesses build innovative products that meet dynamic user demands efficiently. To grow your business with DevOps, contact us today!

Netflix’s move to the cloud

It all began with the worst outage in Netflix’s history when they faced a major database corruption in 2008 and couldn’t ship DVDs to their members for three days. At the time, Netflix had roughly 8.4 million customers and one-third of them were affected by the outage. It prompted Netflix to move to the cloud and give their infrastructure a complete makeover. Netflix chose AWS as its cloud partner and took nearly seven years to complete its cloud migration.

Netflix didn’t just forklift the systems and dump them into AWS. Instead, it chose to rewrite the entire application in the cloud to become truly cloud-native, which fundamentally changed the way the company operated. In the words of Yury Izrailevsky, Vice President, Cloud and Platform Engineering at Netflix:

“We realized that we had to move away from vertically scaled single points of failure, like relational databases in our datacenter, towards highly reliable, horizontally scalable, distributed systems in the cloud.”

As a significant part of their transformation, Netflix converted its monolithic, data center-based Java application into cloud-based Java microservices architecture. It brought about the following changes:

  • Denormalized data model using NoSQL databases
  • Enabled teams at Netflix to be loosely coupled
  • Allowed teams to build and push changes at the speed that they were comfortable with
  • Centralized release coordination
  • Multi-week hardware provisioning cycles led to continuous delivery
  • Engineering teams made independent decisions using self-service tools

As a result, it helped Netflix accelerate innovation and stumble upon the DevOps culture. Netflix also gained eight times as many subscribers as it had in 2008. And Netflix’s monthly streaming hours also grew a thousand times from Dec 2007 to Dec 2015.

netflix streaming hours graph

After completing their cloud migration to AWS by 2016, Netflix had:

netflix after cloud migration

And it handled all of the above with 0 Network Ops Centers and some 70 operations engineers, who were all software engineers focusing on writing tools that enabled other software developers to focus on things they were good at.

Migrating to the cloud made Netflix resilient to the kind of outages it faced in 2008. But they wanted to be prepared for any unseen errors that could cause them equivalent or worse damage in the future.

Engineers at Netflix perceived that the best way to avoid failure was to fail constantly. And so they set out to make their cloud infrastructure more safe, secure, and available the DevOps way – by automating failure and continuous testing.

Chaos Monkey

Netflix created Chaos Monkey, a tool to constantly test its ability to survive unexpected outages without impacting the consumers. Chaos Monkey is a script that runs continuously in all Netflix environments, randomly killing production instances and services in the architecture. It helped developers:

  • Identify weaknesses in the system
  • Build automatic recovery mechanisms to deal with the weaknesses
  • Test their code in unexpected failure conditions
  • Build fault-tolerant systems on day to day basis

The Simian Army

After their success with Chaos Monkey, Netflix engineers wanted to test their resilience to all sorts of inevitable failures, detect abnormal conditions. So, they built the Simian Army , a virtual army of tools discussed below.

the simian army netflix

  • Latency Monkey

It creates false delays in the RESTful client-server communication layers, simulating service degradation and checking if the upstream services respond correctly. Moreover, creating very large delays can simulate an entire service downtime without physically bringing it down and testing the ability to survive. The tool was particularly useful to test new services by simulating the failure of dependencies without affecting the rest of the system.

  • Conformity Monkey

It looks for instances that do not adhere to the best practices and shuts them down, giving the service owner a chance to re-launch them properly.

  • Doctor Monkey

It detects unhealthy instances by tapping into health checks running on each instance and also monitors other external health signs (such as CPU load). The unhealthy instances are removed from service and terminated after service owners identify the root cause of the problem.

  • Janitor Monkey

It ensures the cloud environment runs without clutter and waste. It also searches for unused resources and discards them.

  • Security Monkey

An extension of Conformity Monkey, it identifies security violations or vulnerabilities (e.g., improperly configured AWS security groups) and eliminates the offending instances. It also ensures the SSL (Secure Sockets Layer) and DRM (Digital Rights Management) certificates were valid and not due for renewal.

  • 10-18 Monkey

Short for Localization-Internationalization, it identifies configuration and runtime issues in instances serving users in multiple geographic locations with different languages and character sets.

  • Chaos Gorilla

Like Chaos Monkey, the Gorilla simulates an outage of a whole Amazon availability zone to verify if the services automatically re-balance to the functional availability zones without manual intervention or any visible impact on users.

Today, Netflix still uses Chaos Engineering and has a dedicated team for chaos experiments called the Resilience Engineering team (earlier called the Chaos team).

In a way, Simian Army incorporated DevOps principles of automation, quality assurance, and business needs prioritization. As a result, it helped Netflix develop the ability to deal with unexpected failures and minimize their impact on users. 

On 21st April 2011 , AWS experienced a large outage in the US East region, but Netflix’s streaming ran without any interruption. And on 24th December 2012 , AWS faced problems in Elastic Load Balancer(ELB) services, but Netflix didn’t experience an immediate blackout. Netflix’s website was up throughout the outage, supporting most of their services and streaming, although with higher latency on some devices.

Netflix had a cloud-native, microservices-driven VM architecture that was amazingly resilient, CI/CD enabled, and elastically scalable. It was more reliable, with no SPoFs (single points of failure) and small manageable software components. So why did they adopt container technology? The major factors that prompted Netflix’s investment in containers are:

  • Container images used in local development are very similar to those run in production. This end-to-end packaging allows developers to build and test applications easily in production-like environments, reducing development overhead.
  • Container images help build application-specific images easily.
  • Containers are lightweight, allowing building and deploying them faster than VM infrastructure.
  • Containers only have what a single application needs, are smaller and densely packed, which reduces overall infrastructure cost and footprint.
  • Containers improve developer productivity, allowing them to develop, deploy, and innovate faster.

Moreover, Netflix teams had already started using containers and seen tangible benefits. But they faced some challenges such as migrating to containers without refactoring, ensuring seamless connectivity between VMs and containers, and more. As a result, Netflix designed a container management platform called Titus to meet its unique requirements.

Titus provided a scalable and reliable container execution solution to Netflix and seamlessly integrated with AWS. In addition, it enabled easy deployment of containerized batches and service applications.

netflix titus

Titus served as a standard deployment unit and a generic batch job scheduling system. It helped Netflix expand support to growing batch use cases. 

  • Batch users could also put together sophisticated infrastructure quickly and pack larger instances across many workloads efficiently. Batch users could immediately schedule locally developed code for scaled execution on Titus.
  • Beyond batch, service users benefited from Titus with simpler resource management and local test environments consistent with production deployment.
  • Developers could also push new versions of applications faster than before.

Overall, Titus deployments were done in one or two minutes which took tens of minutes earlier. As a result, both batch and service users could experiment locally, test quickly and deploy with greater confidence than before.

“The theme that underlies all these improvements is developer innovation velocity.” 

-Netflix tech blog

This velocity enabled Netflix to deliver fast features to the customers, making containers extremely important for their business.

Netflix invests and experiments significantly in improving development and operations for the engineering teams. But before Netflix adopted the “Operate what you build” model, it had siloed teams. The Ops teams focused on deploy, operate and support parts of the software life cycle. And Developers handed off the code to the ops team for deployment and operation. So each stage in the SDLC was owned by a different person and looked like this:

specialized roles at netflix

The specialized roles created efficiencies within each segment but created inefficiencies across the entire SDLC. The issues that they faced were:

  • Individual silos that slowed down end-to-end progress
  • Added communication overhead, bottlenecks and hampered effectiveness of feedback loops
  • Knowledge transfers between developers and ops/SREs were lossy
  • Higher time-to-detect and time-to-resolve for deployment problems
  • Longer gaps between code complete and deployment, with releases taking weeks

Operate what you build

To deal with the above challenges and drawing inspiration from DevOps principles, Netflix encouraged shared ownership of the full SDLC and broke down silos. The teams developing a system were responsible for operating and supporting it. Each team owned its own deployment issues, performance bugs, alerting gaps, capacity planning, partner support, and so on.

operate what you build at netflix

Moreover, they also introduced centralized tooling to simplify and automate dealing with common development problems of the teams. When additional tooling needs arise, the central team assesses if the needs are common across multiple development teams and built tools. In case of too team-specific problems, the development team decides if their need is important enough to solve on their own.

centralized tooling at netflix

Full Cycle Developers

Combining the above ideas, Netflix built an even better model where dev teams are equipped with amazing productivity tools and are responsible for the entire SDLC, as shown below.

full cycle developers at netflix

Netflix provided ongoing training and support in different forms (e.g., dev boot camps) to help new developers build up these skills. Easy-to-use tools for deployment pipelines also helped the developers, e.g., Spinnaker. It is a Continuous Delivery platform for releasing software changes with high velocity and confidence.

However, such models require a significant shift in the mindsets of teams/developers. To apply this model outside Netflix, you can start with evaluating what you need, count costs, and be mindful of bringing in the least amount of complexities necessary. And then attempt a mindset shift.

Netflix practices are unique to their work environment and needs and might not suit all organizations. But here are a few lessons to learn from their DevOps strategy and apply:

  • Don’t build systems that say no to your developers

Netflix has no push schedules, push windows, or crucibles that developers must go through to push their code into production. Instead, every engineer at Netflix has full access to the production environment. And there are neither strict policies nor procedures that prevent them from accessing the production environment.

  • Focus on giving freedom and responsibility to the engineers

Netflix aims to hire intelligent people and provide them with the freedom to solve problems in their own way that they see as best. So it doesn’t have to create artificial constraints and guardrails to predict what their developers need to do. But instead, hire people who can develop a balance of freedom and responsibility.

  • Don’t think about uptime at all costs

Netflix servers their millions of users with a near-perfect uptime. But it didn’t think about uptime when they started chaos testing their environment to deal with unexpected failure.

  • Prize the velocity of innovation

Netflix wants its engineers to do fun, exciting things and develop new features to delight its customers with reduced time-to-market.

  • Eliminate a lot of processes and procedures

They limit an organization from moving fast. So instead, Netflix focuses on hiring people they can trust and have independent decision-making capabilities.

  • Practice context over control

Netflix doesn’t control and contain too much. What they do focus on is context. Managers at Netflix ensure that their teams have a quality and constant flow of context of the business, rather than controlling them.

  • Don’t do a lot of required standards, but focus on enablement

Teams at Netflix can work with their choice of programming languages, libraries, frameworks, or IDEs as they see best. In addition, they don’t have to go through any research or approval processes to rewrite a portion of the system.

  • Don’t do silos, walls, and fences

Netflix teams know where they fit in the ecosystem, their workings with other teams, dependents, and dependencies. There are no operational fences over which developers can throw the code for production.

  • Adopt “you build it, you run it” culture

Netflix focuses on making ownership easy. So it has the “operate what you build” culture but with the enablement idea that we learned about earlier.

  • Focus on data

Netflix is a data-driven, decision-driven company. It doesn’t do guesses or fall victim to gut instincts and traditional thinking. It invests in algorithms and systems that combs enormous amounts of data quickly and notify when there’s an issue.

  • Always put customer satisfaction first

The end goal of DevOps is to make customer-driven and focus on enhancing the user experience with every release.

  • Don’t do DevOps, but focus on the culture

At Netflix, DevOps emerged as the wonderful result of their healthy culture, thinking and practices.

how-to-choose-a-devops-consulting-and-implementation-company-sidebar

Get in Touch

Netflix has been a gold standard in the DevOps world for years, but copy-pasting their culture might not work for every organization. DevOps is a mindset that requires molding your processes and organizational structure to continuously improve the software quality and increase your business value. DevOps can be approached through many practices such as automation, continuous integration, delivery, deployment, continuous testing, monitoring, and more.

At Simform, our engineering teams will help you streamline the delivery and deployment pipelines with the right DevOps toolchain and skills. Our DevOps managed services will help accelerate the product life cycle, innovate faster and achieve maximum business efficiency by delivering high-quality software with reduced time-to-market.

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Hiren Dhaduk

Hiren is CTO at Simform with an extensive experience in helping enterprises and startups streamline their business performance through data-driven innovation.

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What Happened to Ashley Madison? The True Story of the Dating Site's Infamous 2015 Hack — and How It Bounced Back

In 2015, the identities of the 37 million users of infidelity website Ashley Madison were hacked and revealed online

case study of netflix

Courtesy of Netflix

The infamous 2015 hack of the dating website Ashley Madison led to multiple headline-making scandals — and now, a new Netflix documentary is revisiting the data leak and its aftermath.

Ashley Madison rose to fame in the early 2000s as the first — and only — dating website for married people seeking affairs. The website drew criticism for its promiscuous premise, but the naysayers had little to no effect on Ashley Madison’s success. By 2015, the infidelity site had nearly 40 million users worldwide and was projected to earn $150 million in revenues, Ashley Madison's then-CEO Noel Biderman told Business Insider at the time.

“The vision was to be the largest and only website for married people who wanted to have an affair,” an employee said in the trailer for Netflix’s docuseries Ashley Madison: Sex, Lies & Scandal , which began streaming on May 15.

Ashley Madison was well on its way to realizing that vision when it all came crashing down in July 2015. Internet hackers stole the customer data for all 37 million of Ashley Madison’s users — and posted it online in August 2015. The data leak and its fallout led to the resignation of Ashley Madison’s CEO and the public humiliation of its users.

Adding to the drama was the fact that multiple high-profile figures were named in the Ashley Madison hacking scandal, including Josh Duggar , Hunter Biden (although he denies that he had an account), former Real Housewives of New York City husband Josh Taekman and Snooki ’s husband Jionni Lavalle (Snooki has fiercely denied Lavalle had used the site). But Netflix’s three-part docuseries takes a closer look at the everyday people who signed up for the cheating website — and how the data leak affected their relationships and their lives.

“Rather than berating people who joined Ashley Madison we were much more interested in exploring why they were drawn to the site — what were they looking for? What was going on in their relationships? And crucially — what was their partner’s side of the story?” Toby Paton, the series director, wrote in a statement, per Variety .

But what is the true story of Ashley Madison and its 2015 hack? Here’s everything to know about the infamous dating website’s rise, fall and rebirth.

What is Ashley Madison?

Ashley Madison is an online dating service that was originally targeted towards people looking to have an affair — either with married individuals or singles.

The site was founded in 2001 by Toronto native Noel Biderman, a former attorney, sports agent and “self-described happily married father of two,” according to a 2009 profile in the Los Angeles Times . Biderman is also behind the website’s name — a combination of the two most popular baby names for girls in 2001 — and its infamous slogan: “Life is short. Have an affair.”

The premise of Ashley Madison was quick to ruffle feathers, with critics claiming it was promoting promiscuity and profiting off of marital strife.

“This is a business built on the back of broken hearts, ruined marriages and damaged families,” Trish McDermott, a dating-industry consultant who helped found Match.com and Engage.com, told TIME in 2009. “It’s in the business of rebranding infidelity.”

But Biderman was a staunch defender of Ashley Madison, even claiming that the company “preserves more marriages than we break up,” according to the Los Angeles Times .

“Infidelity has been around a lot longer than Ashley Madison,” Biderman told the outlet. “Given that affairs are going to happen no matter what, maybe we should see Ashley Madison as a safe alternative.”

Though the company's morals could be debated, its success could not: By 2015, the site boasted nearly 40 million users and was projected to top $150 million in revenue, Business Insider reported. Ashley Madison was even considering a $200 million IPO on the London stock exchange in the spring of 2015, according to Fortune .

What happened to Ashley Madison during the data breach?

Steve Meddle/Shutterstock

In July 2015, a group of anonymous internet sleuths called The Impact Team hacked Ashley Madison’s website — stealing user account data for its 37 million users and threatening to post it online.

The data stolen included users’ login details, email addresses, payment transaction history and passwords. The Impact Team threatened to release all customer records (including sexual fantasies, credit card information and real names and addresses) online unless Avid Life Media — Ashley Madison’s parent company — shut down all of its websites, per Business Insider.

At the time of the initial breach, The Impact Team revealed their motivation for the cyber attack. According to the hackers, Ashley Madison charged users $19 for a full delete of their profile (reportedly earning the company $1.7 million in profit in 2014) — but didn’t actually follow through with the requests.

“You promised secrecy but didn’t deliver,” the hackers stated, according to Business Insider. “We've got the complete set of profiles in our DB dumps, and we'll release them soon if Ashley Madison stays online ... A significant percentage of the population is about to have a very bad day, including many rich and powerful people.”

That “very bad day” came in August 2015, when the hackers made good on their threat and released the customer data for all 37 million of Ashley Madison’s users.

“This event is not an act of hacktivism, it is an act of criminality,” Avid Life Media said in a statement following the data release, per Wired . “It is an illegal action against the individual members of AshleyMadison.com, as well as any freethinking people who choose to engage in fully lawful online activities ... We will not sit idly by and allow these thieves to force their personal ideology on citizens around the world.”

Following the data breach, a $576 million class action lawsuit accusing the company of negligence, invasion of privacy and emotional distress was filed in California. Ashley Madison's parent company settled for $11.2 million in 2017.

Who was exposed in the 2015 hack of Ashley Madison?

D Dipasupil/Getty ; Johnny Nunez/WireImage

Several high-profile figures were exposed when hackers posted the customer data for all of Ashley Madison’s 37 million users.

Josh Duggar , Real Housewives of New York City husband Josh Taekman , YouTube’s Sam Rader , Snooki’s husband Jionni LaValle and Hunter Biden were all named in the Ashley Madison leak. However, Ashley Madison does not verify users’ emails — so an account could be set up with someone’s name and email without their knowledge.

At the time, Snooki denied that her husband had an Ashley Madison account, writing on Instagram that it “couldn’t be any further from the truth.” Biden also vehemently denied having an account on the infidelity website, saying the email linked was one that he no longer used after being hacked.

“I am certain that the account in question is not mine,” Hunter said in a statement at the time. “This account was clearly set up by someone else without my knowledge and I first learned about the account in question from the media.”

Duggar, Taekman and Rader, however, all issued apologies for their involvement with the website.

Rader, from the YouTube channel Sam and Nia, admitted to making an Ashley Madison account two years prior. He also stated that his wife had forgiven him for the “mistake.”

Taekman, the husband of former RHONY star Kristen Taekman, provided a statement to PEOPLE, apologizing to his wife and children for “any embarrassment or pain” he may have caused.

“ I signed up for the site foolishly and ignorantly with a group of friends and I deeply apologize for any embarrassment or pain I have brought to my wife and family,” Taekman said. “We both look forward to moving past this and getting on with our lives.”

Duggar , at the time, was already under fire for allegedly molesting five underage girls (including two of his sisters) as a teenager. After news broke of his Ashley Madison account, he admitted to being unfaithful to his wife Anna and issued an apology on his family’s website.

“While espousing faith and family values, I have been unfaithful to my wife,” the statement read. “I am so ashamed of the double life that I have been living and am grieved for the hurt, pain and disgrace my sin has caused my wife and family, and most of all Jesus and all those who profess faith in Him.”

In addition to exposing high-profile users, the Ashley Madison leak may have been linked to at least two suicides, Toronto police claimed in August 2015. A month later, a New Orleans pastor also committed suicide after allegedly having his name exposed in the data breach.

What happened to Ashley Madison CEO Noel Biderman?

Jane Mingay/Shutterstock

In addition to the identities of Ashley Madison’s 37 million users being revealed, Biderman himself was also exposed in the 2015 hacking scandal.

Though Biderman had repeatedly told the media he had never been unfaithful to his wife Amanda, hackers leaked hundreds of the CEO’s emails that claimed otherwise. The emails suggested that Biderman had had multiple affairs, including one with a Toronto-based escort that lasted several years, Buzzfeed reported.

In the wake of the hacking, Biderman stepped down from his role as CEO of Avid Life Media, Ashley Madison’s parent company. Avid Life Media stated at the time that his resignation was “in the best interest of the company.”

Does Ashley Madison still exist?

Chris So/Toronto Star/Getty

Though the 2015 hacking threatened Ashley Madison’s existence, the website has continued to thrive in the near-decade since.

In 2016, Avid Life Media rebranded as Ruby Corp. and hired Rob Segal and James Millership as its CEO and president, respectively. The pair worked on revamping the beleaguered Ashley Madison site — which involved gaining back their clients’ trust and winning over new customers.

Segal and Millership increased the site’s cybersecurity — hiring Deloitte, instituting annual audits and removing all of the fake female bots from the website, Business Insider reported. The duo also ditched Ashley Madison’s infamous tagline “Life is short. Have an affair,” and instead replaced it with “Find your moment,” according to a Ruby Corp. press release .

“It was a limiting label that's out-dated and doesn't speak to the wide variety of connections people find on Ashley Madison,” Segal said in the press release. “While remaining true to our roots, Ashley Madison needs to evolve, grow and attune to modern sexuality in 2016.”

The rebrand attempted to shake Ashley Madison’s reputation as a website for those seeking affairs — but the company appears to have returned to its adulterous roots. Its website currently features the original logo (a woman wearing a wedding ring doing the “hush” symbol) and motto of “Life is Short. Have an affair.”

It is also as popular as ever: According to the site, it boasts 80 million users (more than double the amount at the time of the 2015 hacking).

If you or someone you know is considering suicide, please contact the 988 Suicide and Crisis Lifeline by dialing 988, text "STRENGTH" to the Crisis Text Line at 741741 or go to 988lifeline.org .

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