How Netflix Wants to Take on Its Competition in 2019 and Beyond

A look behind the curtain at the technology that makes the streaming service tick

Reed Hastings
Janko Roettgers / Variety

“They’re going to do some great shows. I’m going to be envious.”

Netflix CEO Reed Hastings practiced humility when he was asked about new competitors like Disney’s and Apple’s upcoming streaming services this week. “These are amazing, large, well-funded companies with very significant efforts,” he said. “But you do your best job when you have great competitors.”

Hastings made the remarks during a Q&A session with reporters from around the world that was part of the company’s Lab Days, an annual effort to give media a peek behind the scenes and show off some of the technology and people powering the streaming service.

And while it wasn’t explicitly framed as such, this year’s iteration of the event could in many ways be seen as a blueprint for Netflix’s future, a collection of technologies and initiatives meant to ensure that the service will succeed even in the face of powerful competitors like Apple and Disney.

Read more on five of those efforts below.

Doubling down on international growth

During the two days at Netflix’s Los Angeles offices, one number came up over and over again: Only 5% of the world’s population are native English speakers. “Historically, we’ve seen the large majority of international content be produced right here in Hollywood in English,” said Netflix chief product officer Greg Peters. “And it’s in that disconnect that we see a tremendous opportunity, because we believe that great stories should be able to come from anywhere on the planet.”

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Janko Roettgers / Variety

Netflix’s strategy to reach the other 95% of the world is to produce local content, and then find global audiences for that content. Peters named “La Casa de Papel,” “Sex Education,” “Dark,” and “The Rain” as some of the service’s international success stories. “All these shows are popular in their own country, but they’re also traveling and finding audiences around the world,” he said. “Audiences that would’ve most likely never experienced these kind of shows before.”

Key to those efforts is Netflix’s focus on dubbing. “We want to provide entertainment to everybody around the world, no matter what you speak, where you live, where you’re from, what you eat,” said the company’s international dubbing director Debra Chinn. Her team has been rolling out dubbed versions of Netflix’s content in up to 27 languages, including English — a particular challenge, since native English-language speakers typically aren’t used to dubbed content. “We are taking this new initiative very seriously,” Chinn said.

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Janko Roettgers / Variety

The art of dubbing, as demonstrated by Netflix to journalists this week.

Going short, and out-of-order

Netflix may be best known for binge-watching, with its app conveniently starting the next episode as soon as you have finished one. However, Netflix VP of product Todd Yellin suggested this week that the company may mix things up a bit in the future. “How about anthologies? How about something like ‘Chef’s Table’?” he asked. “You don’t have to watch it in the order that we tell you to.”

Yellin also quoted the company’s latest animated sci-fi anthology “Love, Death & Robots” as a perfect example of a show that can be watched in any particular order — which is exactly what the company is experimenting with through a special episode picker right on your TV home page. “Some members will get a special row, and that row will have all the different, let’s call them animated shorts for grownups, from ‘Love, Death & Robots,’” he said.

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Janko Roettgers / Variety

Some Netflix members get to see a special episode picker for the service’s new show “Love, Death & Robots.”

The show is also notable for being an experiment in brevity. “Some of them are five minutes long. Some of them are 17 minutes long,” Yellin said. “Why should we be constrained by the amount of time? With internet TV, the schedule is yours.”

But while Jeffrey Katzenberg and others are rediscovering short-form as a mobile-driven video format, Yellin was quick to emphasize that the length of a show was purely a creative decision for Netflix. “It’s really about flexibility in storytelling. Some stories are best told in six minutes and some stories are best told in 10 hours,” he said in an interview with Variety. The flip side of this line of thinking is that Netflix may do more short-form content over time if the right project comes along. Said Yellin: “We’re experimenting with short-form, and we’ll see if it works.”

Making shows and movies look and sound their best

Six-hundred unique devices access Netflix every month, according to Peters. And in February, out of those 600 million, 125 million were HDR-capable. “That’s an amazing adoption rate of a new video format that we are enabling by working both with the creative community and with our device partners,” Peters said.

In addition to embracing HDR for its own productions, the streaming service is also increasingly using Dolby Atmos to enable a theater-like in-home audio experience. “The sound of a movie is another character, is another performer in the show,” said “Lost in Space” showrunner and executive producer Zack Estrin, who argued that this was also true for shows without big soundscapes, like comedies. “If you feel the laughter around you as opposed to just on that wall, it feels like you are in the audience,” Estrin said.

But while Netflix has benefited from new audio and display technologies, it also has to deal with some of the downsides. This includes default settings for TVs that are optimized for brightness, and not necessarily accuracy. “Most TVs tend to over-brighten the color,” said Netflix post tools integration manager Richard Smith. “Bright shiny objects, bright shiny objects — that’s not what we want,” added Estrin.

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Courtesy of Netflix / ADAM ROSE

Sony’s latest TV set, compared to a studio reference monitor made by the company.

As a remedy for overly bright screens, Netflix has been working with select display makers on a dedicated setting to restore accuracy. This “Netflix Calibrated Mode” was first added to select Sony TVs last year. This year, the company is going to team up with other TV makers to add it to their devices as well, but company representatives weren’t ready to share the names of those TV makers just yet.

Infusing the production process with 21st-century technology

As Netflix continues its shift toward original content, the company is also exploring ways to make content production more efficient. Netflix has a dedicated team that has been building apps and services for the production process, including a contacts manager, a distribution tool that helps to update an entire crew with the latest version of call sheets and other important documents, and an app called Move that helps track the schedule of a production.

Netflix is gradually introducing these tools to the production process, said studio technology director Amie Tornincasa. “We start small, with seeds.” The best approach was not to replace all of the technology that a production is using with a whole new set of tools, but integrate with their workflow and improve things from there. In 2017, Netflix tested some of its new tools with 10 different productions. In 2018, 40 productions made use of at least some of the apps and services developed by Tornincasa’s team.

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Janko Roettgers / Variety

Netflix’s new script markup tool.

This year, Netflix wants to start testing a new tool that helps production teams mark up a script, and enable them to move away from pen, paper, and highlighter. “We want to take the script and turn it into an interactive breakdown tool,” said content engineering product director Chris Goss.

Helping Netflix users find new gems

Netflix frequently tests new iterations of its TV and mobile interfaces, and Hastings made it clear this week that his company’s work on perfecting that experience is far from done. “It’s a little bit too much like the classified ads and not enough like a magazine,” he said about Netflix’s current interface.

Yellin also readily admitted that the company can do better, for instance when it comes to showing the right content to the right person in the right way. “As we’ve moved increasingly to original content, it’s content that they’ve never heard of before,” Yellin told Variety. “So we have to get them excited.”

Netflix has for some time personalized images to present the same show in different ways to different audiences. Now, it is also testing personalizing text descriptions and even tags, said Yellin: “Different tags work for different people,” he said.

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Janko Roettgers / Variety

Netflix also relies on tagging to personalize the curation of its shows.

Even the videos shown as part of Netflix’s interface are increasingly being personalized. For instance, Netflix cuts different trailers of its originals and shows them to different audiences, said Yellin. And later this year, it will test videos fine-tuned to tell the story of a kids show’s character in its own voice to younger viewers.

“They’re shorter, they’re in the character’s voice and they’re focused on the character,” explained Netflix TV product innovation director Cameron Johnson. “They’re not telling you the full arc of the story, they’re just saying: This is who this character is.”

Netflix has also been running tests to adapt the size of cover art in its interface based on personalization. However, Yellin added that the company has been carefully weighing the amount of content shown to each viewer as they browse Netflix’s catalog — even if the optimal result may not look like a glossy magazine. “Newspapers existed for a couple of centuries by running classified ads, and it was really important to them,” he joked in response to Hastings’ comments. “I’ll choose to take what our CEO says as a compliment.”