Netflix

ASDD ASSIGNMENT

Samuel Jonathan | CSE C | 02/12/2021

Niranjan K | CSE C | 02/12/2021
 Index
 Introduction

 About

 Uses

 Company Benefits

 Client Benefits

 Interface/UI

 Software Requirements

 Future Development Plans

 Conclusion

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Introduction
Netflix, Inc. is an American subscription streaming service and production company.
Launched on August 29, 1997, it offers a library of films and television series through
distribution deals as well as its own productions, known as Netflix Originals.

Netflix has over 214 million subscribers worldwide, including 74 million in the United
States and Canada

Netflix can be accessed via internet browser on computers, or via application software
installed on smart TVs, set-top boxes connected to televisions, tablet computers,
smartphones, digital media players,

Blu-ray Disc players, video game consoles, and virtual reality headsets on the list of
Netflix-compatible devices. It is available in 4K resolution.

Marc Randolph and Reed Hastings founded Netflix in Scotts Valley, California.

What is Netflix about?

GETTING STARTED WITH NETFLIX

 Signing in

Once you've opened the Netflix app or Netflix website, you can select Sign In to
access your account and begin watching TV shows and movies. You can sign in on
any Netflix-compatible device, or on multiple compatible devices. If you don't have
the Netflix app, you can download the Netflix app from your platform specific app
store.

 Creating profiles

You can create profiles for members in your household, allowing them to have
their own personalized Netflix experience. Your account can have up to five
individual profiles, and you can set a maturity rating level on each one. Each
profile will have its own recommendations based on that profile's ratings and
tastes.

 Finding TV shows and movies

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 You can search for titles you’re interested in or browse suggestions provided by
Netflix. Once you start viewing and rating titles, Netflix will show
recommendations. You can also enable subtitles, captions, or alternate audio on
many titles, or browse titles with your preferred subtitle or audio language.

 Managing your account

You can update your account information at any time, and change your email,
phone number, or membership plan by selecting the Account option within the
Netflix menu. With Profile & Parental Controls, you can also adjust content
controls, such as playback preferences, language, and subtitles.

 Streaming on different devices

If you have more than one Netflix-compatible device, you can switch devices at
any time. Your membership plan determines the number of screens you can watch
at the same time, but it does not restrict the number of devices you can associate
with your account. If you want to watch on a new or different device, sign in to
Netflix on that device. You can visit devices.netflix.com for more information
about compatible devices, or set up a new device.

Uses
Although most users are subscribed to Netflix's Standard plan, Netflix actually offers five
different subscription tiers, each with their own price and features.

Anyone who remembers the early days when Netflix was a DVD-by-mail rental service
(with no late fees!) will be tickled to know the streaming giant is still offering that.
Alongside the streaming plans are two DVD & Blu-ray plans, which let you rent shows and
movies on physical discs.

If you're interested in switching up your plan, you can change your subscription at any
time. And if you ever need to change your payment method, you can do that, too.

You can watch Netflix through any internet-connected device that offers the Netflix app,
including smart TVs, game consoles, streaming media players, set-top boxes,
smartphones, and tablets. You can also watch Netflix on your computer using an internet
browser. You can review the system requirements for web browser compatibility and
check our internet speed recommendations to achieve the best performance.

One thing that everyone associates with Netflix is binge-watching. And one way that
Netflix makes binge-watching easy is with the Continue Watching list.

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Whenever you watch a show or movie, but then turn it off without finishing, it's added to
your Continue Watching list. This list makes it easy to start again when you eventually
return - just click the title you want, and it'll resume exactly where you left off.

But the Continue Watching list doesn't have to be totally automated. If there's a show or
two on your Continue Watching list that you know you're never going to return to, you
can delete items from it at any time.

How does Netflix benefit?

Apart from being able to support content creators with rich innovative fully funded
projects, Netflix’s first operating model was to let customers rent a video by selecting it
online, then shipping it directly to their address by post. And in 1998, Netflix started
renting out DVDs.

In the US, the company offers a flat monthly fee for DVD rental services. A subscriber
creates a list to rent movies. Films are distributed exclusively through the US Postal
Service from regional repositories. Subscribers can keep rented discs as long as they want,
but there is a limit to the number of discs each subscriber can have simultaneously. To
rent a new disc, the enrollee must return the previous disc through a replying envelope.
When received, Netflix sends the next available disc in the subscriber’s rental list.

From renting DVDs to a subscription model

A year later, Netflix switched from renting DVDs to online subscriptions and paid
monthly. This move has created a lot of convenience for customers, completely reduced
fees incurred, and streamlined management and operation of the business.

Since launching the monthly subscription model in 1999, Netflix has reached 239,000
subscribers in its first year and quickly hit 1 million subscribers in 2003. Netflix currently
generates about $ 15 billion annually, with 125 million paid members from more than 190
countries.

The exponential growth of Netflix can be attributed to these key trends:

− Technology: available in many platforms, websites, TV app, mobile app.

− Comfort: being able to watch their favorite shows at their most convenience

− Subscription: simple structure and low monthly cost;

− Data-driven: used for creating recommendations fitting personal preferences.

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With these 3 kinds of subscriptions, you can get access to all types of TV shows and
movies worldwide.

In addition, Netflix has 3 business segments:

International streaming: revenues from monthly membership fees for services related to
streaming content to members outside the U.S in 190 countries.

Domestic streaming: revenues from monthly membership fees for services related to
streaming contents to members in the U.S

Domestic DVD: revenues from monthly membership fees for services consisting solely of
DVD-by-mail.

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Netflix’s Total Revenue has increased 78% from $8.8 billion in 2016 to $15.8 billion in 2018
and is expected to grow around 50% to $23.2 billion in just 2 years.

Revenue growth of about $9.2 billion over two years to be driven by contribution of about
$6.5 billion from the (1) International Streaming segment, and about $2.9 billion from the
(2) Domestic streaming segment, partially offset by lower DVD revenues.

(A) Revenue from International Streaming to increase over 50% (about $6.4 billion) in the
next two years

Netflix continues to attract more and more international subscribers, though there is
growth in monthly fees.

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PAGE 7
It seems that there is a comparatively faster rate of growth in subscribers in 2020 and
slower growth in 2021 since the appearance of Apple’s and Disney’s direct-to-consumer
streaming offerings could attend the market.

International Streaming revenue tripled from about $3 billion in 2016 to $10.6 billion in
2019, resulting from an increase in memberships.

It is expected that revenue may grow by 60% in the next two years, to $17.1 billion by 2021,
driven by its original content creation, which definitely adds more subscribers, despite
growing competition.

(B) Revenue from Domestic Streaming to increase about $2.8 billion in the next two years

The company added more than 15 million subscribers between 2016 and 2019. The number
of subscribers is expected to increase sharply in 2020 due to the impact of COVID-19 and
then start to decrease slowly in 2021 due to change in pricing and more of competitors.

Domestic Streaming revenues increased from $5 billion in 2016 to about $9 billion in 2019,
driven by growth in memberships.

Revenue is expected to grow by more than 30% to about $12 billion in 2021, due to
increasing fees/subscribers. For instance, Netflix raised its prices in the U.S. and some
Latin American countries at the beginning of fiscal 2019. The Standard plan (two HD
streams) increased from $10.99 to $12.99 per month; the Premium plan (up to four Ultra
HD streams) increased from $13.99 to $15.99 per month; and the Basic plan (with a single
non-HD stream) increased for the first time, from $7.99 to $8.99 per month.

Domestic Streaming sales may contribute a decline to total revenue from 46% in 2019 to
about 42% in 2021.

IS NETFLIX PROFITABLE?
Netflix has been performing well, with its net profits growing 6x from around $0.3 billion
in 2014 to $1.9 billion in 2019. Besides, it has been burning cash, with free cash flows
dropping from -$0.1 billion in 2014 to -$3.3 billion in 2019.

The difference between these two statistics can be explained by how Netflix accounts for
its content investments, expensing only a portion of its content each year on its income
statement. Netflix’s spending on content is growing fast, increasing from about $9 billion

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in 2017 to $14.5 billion in 2019. The amortization of content has been lower, growing from
about $6 billion to $9 billion over the same period. According to Netflix, about 90% of a
show’s value is expended within four years of its debut.

Benefits to customization
It gives you a reasonably priced source of entertainment, and is a good alternative for
those too busy to watch tv as it airs, or for those who like to binge watch.

Netflix also produces decent original content that you cannot get elsewhere, so the benefit
is that as well.

Basically, for less than the price of a movie ticket per month, you get access to thousands
of hours of movie and TV content.

Before Netflix, consumers went to the movies, rented VHS tapes or DVDs and watched
whatever was on live TV. Now, consumers can stream content instantly to any device,
anywhere.

Netflix has changed how consumers access film and TV. They’re no longer tied to the TV
and forced to sit through commercials. Instead of paying for cable plans, a growing
number of Americans are cutting the cord and only using streaming services. In 2018, the
number of people who cut the cord increased by nearly 33%, to 33 million people. At the
same time, Netflix users are increasing. Consumers prefer the flexibility of being able to
watch what they want when they want to.

One of the main ways that Netflix shows it is listening to its consumers is through content
marketing. Netflix has created sophisticated algorithms to recommend viewing to each
unique customer from a set of 80,000 different viewing categories.

These categories can be as general as “Weird Anime” or as specific as “Dramas Featuring a

Strong Male Lead.” This allows for greater consumer engagement and customization.

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Interface
Netflix UI UX in the early years was much like any other e-commerce platform. People
used to add DVDs to their cart in order to hire them. This process is just like Amazon and
any other e-commerce platform.

Netflix had no separate web app or mobile app. All they had was a website as a source of
both information and transaction.

DVD by mail

Unlike what you are used to in the present times, Netflix used to send their DVDs via mail.
After watching the DVDs, people used to return it without leaving feedback.

This process failed to give an estimated number of what people’s preferences and the ways
they could improve their service.

Live streaming for certain titles

Around 2007, Netflix started their online movie streaming but for a restricted number of
titles.

This can be said to be a transition between offline and online movie streaming facilities
undergone by the company.

No recommendations

Today Netflix tends to provide a large number of movies and series recommendations.
This, however, did not happen at the early times.

Since Netflix UI UX did not have the option to track down user’s preference and provide
similar titles based on their preference data.

Now we know more or less about what was the UI UX of Netflix as a video rental
company.

So, let’s check out what are the improvements made by Netflix UI UX designers that made
it the world’s largest online movie streaming company.

Convenient method of switching to the next episode

People often hate to take a long route and always try to find a shorter way to reach their
destination.

Netflix new UI allows their users to switch to the next episode of a series without going
back to the particular series’ page.

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Netflix UX design has a great feature which allows you to continue your streaming even if
you switch your device in between.

All you need to do is sign in with your Netflix account on the device you want to continue
watching in.

Netflix has made many strategic changes along with implementing tactical psychological
design concepts to boost their game.

Not only they developed their website but they also developed their own app which made
users hooked to them

Netflix High Level System Architecture

We all are familiar with Netflix services. It handles large categories of movies and
television content and users pay the monthly rent to access these contents. Netflix has
180+M subscribers in 200+ countries.

Netflix works on two clouds…AWS and Open Connect. These two clouds work together as
the backbone of Netflix and both are highly responsible for providing the best video to the
subscribers.

The application has mainly 3 components…

 Client: Device (User Interface) which is used to browse and play Netflix videos. TV,
XBOX, laptop or mobile phone, etc.

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  OC (Open connect) or Netflix CDN: CDN is the network of distributed servers in
different geographical locations and Open Connect is Netflix’s own custom global
CDN (Content delivery network). It handles everything which involves video
streaming. It is distributed in different locations and once you hit the play button
the video stream from this component is displayed on your device. So, if you’re
trying to play the video sitting in North America, the video will be served from the
nearest open connect (or server) instead of the original server (faster response
from the nearest server).

 Backend (Database): This part handles everything that doesn’t involve video
streaming (before you hit the play button) such as onboarding new content,
processing videos, distributing them on servers located in different parts of the
world, and managing the network traffic. Most of the processes are take care of by
Amazon Web Services.

Netflix frontend is written in ReactJS for mainly three reasons…startup speed, runtime
performance, and modularity. Let’s discuss the components and working of Netflix.

HOW NETFLIX ONBOARD A MOVIE/VIDEO?

Netflix receives very high-quality videos and content from the production houses so
before serving the videos to the users it does some preprocessing. Netflix supports more
than 2200 devices and each one of them requires different resolutions and formats. To
make the videos viewable on different devices Netflix performs transcoding or encoding
which involves finding errors and converting the original video into different formats and
resolutions.

Netflix also creates file optimization for different network speeds. The quality of a video is
good when you’re watching the video on high network speed. Netflix creates multiple
replicas (approx. 1100-1200) for the same movie with different resolutions. These replicas
require a lot of transcoding and preprocessing. Netflix breaks the original video into
different smaller chunks and using parallel workers in AWS it converts these chunks into

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different formats (like mp4, 3gp, etc.) across different resolutions (like 4k, 1080p, and
more).

After transcoding, once we have multiple copies of the files for the same movie, these files
are transferred to each and every Open Connect server which is placed in different
locations across the world.

When the user loads the Netflix app on his/her device firstly AWS instances come into the
picture and handles some tasks such as login, recommendations, search, user history, the
home page, billing, customer support, etc. After that when the user hits the play button on
a video, Netflix analyzes the network speed or connection stability, and then it figures out
the best Open Connect server near to the user. Depending on the device and screen size,
the right video format is streamed into the user’s device. While watching a video you
might have noticed that the video appears pixelated and snaps back to HD after a while?
this happens because the application keeps checking the best streaming open connect
server and switches between formats (for best viewing experience) when it’s needed.

User data which is saved in AWS such as searches, viewing, location, device, reviews, and
likes, Netflix uses it to build the movie recommendation for users using the Machine
learning model or Hadoop.

Open Connect Advantages:

 Less Expensive
 Better Quality
 More Scalable

Software Requirements Specification

OPERATING ENVIRONMENT

PC or Laptops:

 Windows 7
 Windows 8
 Windows 8.1
 Windows 10
 Mac OS X
 Linux

Smart TV’s, Cellphones, Tablets (Android or IOS) etc.

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External Interface Requirements
USER INTERFACE

1. Using a Smart TV:

 Connect your Smart TV to your home network. In order to stream Netflix from
your Smart TV's app, it will need to be connected to the internet. You can do this
using a wired Ethernet connection, or by connecting your TV to your wireless
network. If your TV is not a smart TV, you can connect a streaming box such as
Roku, Google Chromecast, Firestick, or Apple TV to your TV.

 Wired Connection: A wired connection will provide a much more stable

connection to the internet. To connect your TV to the internet using a wired
connection, connect an Ethernet cable from an open LAN port on your modem or
router, and then to the Ethernet port on your TV.

 Wireless connection: Open the setting menu on your TV and locate the Network
settings. Select your wireless network and then use the remote to enter your
wireless password These menus and settings may be different from one model of
TV to another.

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Open your Smart TV apps. Most Smart TV remotes will have a button that opens the
apps list. This button is often a logo or has the TV's brand name on it. You'll need to use
the remote for your TV, not your cable box or universal remote.

 Samsung: The button looks like a multicolor cube.

 LG: Look for the "My Apps" button.
 Sony: Press the "Internet Apps" or Netflix button.
 Panasonic: Press the "Apps" button.
 Vizio: Press the Vizio logo, the Netflix button, or select "Smart Cast" as the video
source for your TV.

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Select the Netflix app. It's a black icon that says "Netflix" in red letters. Use the arrow
buttons to navigate the apps on your smart TVs user interface. Highlight the Netflix app
icon and press Enter or Ok on your remote.

 If you can't find the Netflix app, you may have to download it from your Smart
TV's app store.
 You may need to update your TV's firmware in order to access streaming apps. The
process for this varies, but generally, you'll download the file on your computer,
copy it to a USB drive, and then load that into the TV. Refer to your TV model's
Support page for detailed instructions.

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Log in with your Netflix account. Use the on-screen keyboard to enter the email
address and password associated with your Netflix account and then select Sign In and
press Enter and Ok.

 You'll need to have a Netflix plan that supports streaming video. Any of the
streaming plans will allow you to use the Smart TV app. If you do not have a
Netflix account, you can sign up for Netflix at the Netflix website.
 If you have more than one profile on your Netflix account, select the profile you
want to use.

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Browse using your remote. Use the arrow buttons on the TV remote to navigate the
menus and videos on Netflix. Highlight a video you want to watch and then press the
"Select" or "Enter" button on your remote to start it.

 If you want to watch a TV series, you can select a specific episode you want to
watch. Use your TV remote to select "Seasons" and then select a season. Then
select an episode from the list and press Enter or Ok on your TV remote.

2. Using a Google Chrome cast:

Download the Netflix app for your Android or iPhone. You can download the app for free
from the Google Play Store or Android App Store. Here's how to get it:

 Open the Google Play Store or App Store.

 Tap the Search tab at the bottom (iPhone and iPad only).
 Type Netflix in the search bar.
 Tap Netflix in the search results.
 Tap Install or Get next to the Netflix app.

Connect the Chromecast to an HDMI port on your TV. The Chromecast is a small dongle. It
has an attached cable that connects to an HDMI port on your TV. The HDMI ports on
your TV are usually numbered. Make a note of which numbered HDMI port you are
connecting to.

 You can use the included extender if the cable isn't long enough.

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Press the power button on your TV. The power button typically has an icon that resembles
a circle with a line through the top.

Select the HDMI source you connected the Chromecast to. Press the Source or Input
button on your TV to select the video source.

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Open the Netflix app on your smartphone or tablet. It has a black icon that says "Netflix"
in red letters.

 If you are not automatically logged in to Netflix, enter the email address and
password associated with your Netflix account and sign in.
 If you have more than one profile on your Netflix account, select the profile you
want to use.

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Select a video to play. When you find a video you want to play, tap the video image.

Future development: Netflix focus

Netflix is a global streaming entertainment service offering movies and TV series
commercial-free, with unlimited viewing on any internet-connected screen for an
affordable, no-commitment monthly fee. Netflix is a focused passion brand, not a do-
everything brand: Starbucks, not 7-Eleven; Southwest, not United; HBO, not Dish.

Netflix don't offer pay-per-view or free ad-supported content. Those are fine business
models that other firms do well. Netflix is about flat-fee unlimited viewing commercial-
free.

Netflix is not a generic "video" company that streams all types of videos such as news,
user-generated, live sports, porn, music video, and gaming. Netflix is a movie and TV
series entertainment network.

Netflix is a relief from the complexity and frustration that embody most MVPD
relationships with their customers. It strives to be extremely straightforward. There is no
better example of this than our no-hassle online cancellation. Members can leave when
they want and come back when they want.

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Netflix is about the freedom of on-demand and the fun of binge viewing. Netflix is about
the flexibility of any screen at any time. Netflix is about a personal experience that finds
for each person the most pleasing titles from around the world.

Conclusion
Netflix started in 1997 as a DVD-rental-by-mail firm, and spent the first five years
struggling to get to a sustainable model that was cash flow positive. We spent most of the
next five years fighting with Blockbuster in the US. We began streaming in the US in 2007,
and internationally in 2010. Our sobering Qwikster DVD misstep was in 2011. Our first
original series debuted in 2013. We became global in 2016, nearly twenty years after
starting Netflix. Over the following decades, streaming entertainment will replace linear
TV, and we hope to keep leading by offering an amazing entertainment experience.

Bibliography
 en.wikipedia.org/wiki/Netflix
 ycharts.com/companies/NFLX/revenues_ttm
 ir.netflix.net/ir-overview/long-term-view/default.aspx
 geeksforgeeks.org/system-design-netflix-a-complete-architecture/

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