The Netflix business model

Posted on October 26, 2015 by ATB Chartered Accountants

Even though there are no employees in Australia, Netflix, a video streaming company with market capitalisation of approximately $58 billion AUD, has changed the way Australian businesses operate. Adopting an innovative business model, Netflix has become one of the most influential business models in the technology industry to date, both in Australia and globally.

Netflix has a self-defined workplace culture of “creativity and self-discipline, freedom and responsibility”. Employees of Netflix receive benefits such as unlimited paid parental leave and vacation time, on top of high salaries. They stipulate that they “don’t focus on rules, processes or procedures”, but instead “seek excellence” in all business activities. The company embody values of judgement, communication, curiosity, innovation, and passion in all employees, even allowing them flexibility in work hours as long as they are able to show excellent results. Netflix holds a belief of “adequate performance gets a generous severance package”. They strive for excellence in all aspects of their operations and employees are expected to live up to this. This belief creates a very competitive work environment with employees striving for the best in order to keep their jobs, and this is something that all businesses wish to achieve in the sense that their employees are consistently performing to the best of their ability.

In the Australian workplace, people tend to value job security and stability over a high performance work culture. The Australian workforce as a whole treat their place of employment as a ‘family’ sort of environment where they have a long term position that is relatively unthreatened, however, in the modern age we live in with greater emphasis on increasing profits in business, this model is outdated. In this respect, it is understandable that Netflix has a seemingly one of a kind business culture. Those businesses in Australia who do adopt this sort of workplace culture have experienced large profits and market share as they are better able to position themselves as market leaders and professionals.

Flexibility needs to be the focus in modern businesses. In the long run, it will greatly increase efficiency in the workplace, benefiting all businesses. While it may not be suitable for every business to adopt the Netflix business model, there are a number of key ideas that should be considered in every workplace in order to grow and succeed in the present economy.

Source: http://www.afr.com/technology/the-netflix-effect-why-your-work-is-not-a-family-20151021-gkfeq1