Netflix has an online ordering model and hence it devotes a significant amount of resources to develop the best suggestion and referral algorithms. This ensures that customers can find their favorite movies without much effort. Further, it also invests heavily in streamlining its delivery process and has successfully managed to automate a significant part of its postage and packaging process. These costs are included in technology and development expense heading and these investments ensure high levels customer satisfaction. Contributing here are not only compelling viewing experiences, but convenient payment and delivery processes as well. Since resources poured into technology and development (in addition to content) somewhat govern the user churn rate, it seems worthwhile to look at Netflix’s contribution profits from the perspective of technology and development expenses.

from Forbes – Tech http://ift.tt/2aYQNBp
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