Netflix’s success formula in innovation, from production to play

Netflix Labs 2018 unveiled the inner mechanics of the streaming giant’s global operations

April 02, 2018 03:55 pm | Updated April 07, 2018 04:40 pm IST

$11 billion. No small feat in terms of revenue, and Netflix Inc surpassed this number in 2017, as revealed at their annual Labs Day event, held earlier this month in Los Angeles and Los Gatos, which showcases the company’s infrastructure.

According to CEO Reed Hastings, its expected that members will collectively gear in $15 billion towards subscriptions, which will churn out quality content, adding, “We’re proud to have been one of the first, to be one of the leaders, and we’re driving this content creation both on the technological level and also at the creative level, and trying to tell stories that haven’t been told before. And you see this in some of the new content that we’re developing around the world.”

Greg Peters, Chief Product Officer, was one of the few people who helped transform Netflix from a DVD company to a full-fledged streaming giant. He adds that this year, Netflix will spend over $8 billion dollars towards expanding its ever-growing library, and an increasing percentage of that spend will be on original content. “Just two years ago, we actually completed the global rollout of our streaming service.”


According to the company, in just one day, they launched in 130 countries, adding to the countries already served, bringing the total up to 190 countries, which made Netflix almost globally accessible, except in China, North Korea, Syria, and Crimea due to geopolitical differences.

Picture perfect

Jimmy Fusil, Manager of Production Technologies, oversees a team of sound engineers and colour scientists, who cohesively ensure every bit of content, by Netflix and otherwise, meets the audio-visual standards of Netflix, often seeing how production and consumer technology together optimise viewing content. “The challenge is always that production is evolving very quickly both on the production technology side and also on the consumer side,” he explains, “and the biggest improvements or sea changes that we’re seeing are really when both the production and technology and the consumer technology connect.”

Discussing production challenges and the evolving HDR (High Dynamic Range) technology, Fusil says, “It is about the alignment of the workflow from the capture in HDR to then exploit the display technology at the end. How do we connect the two? That’s where processes of colour science, colour management, colour correction all had to be investigated and developed, and we do this, we don’t develop those tools on our own.”


Seated in the dimly-lit imaging labs is Chris Clark, Manager of Production Imaging, whose work is centred around the careful treatment that is colour grading, camera optimisation and display management. The room features a heavy-duty camera the production team of Jessica Jones favours, a Red Weapon that delivers upto 8K resolution, as well as a Panavision DXL2 which boasts a RED MONSTRO 8K V V sensor with 16-plus stops of dynamic range, with improvements in image quality and shadow detail, a native ISO setting of 1600, and ProRes 4K up to 60fps.


Clark indicates that using a dynamic range chart showcases the ideal range of 20 tones, with which Netflix tends to shoot. Then when it comes to measuring the colour ranges, they make use of a Sony X300, an industry standard 4K and HDR-enabled reference monitor. “We can measure everything with this spectroradiometer, which allows us to repeatedly measure displays,” Clark points out, “And knowing that relationship of how the camera is recording colour and the display is displaying colour allows us to build a lookup table or LUT.”

Fusil adds that the company coordinates with manufacturers of professional equipment to make sure that there are professional monitors available for critical viewing in a typical colour correction room. Additionally, to make sure that the tools make and monitor at a very technical level, the HDR video signals exist for colourists to do their work in an informed way. He concludes, “So this all brings realism to these really fantastic stories, which I think is the great tension and the great heightened reality that The Defenders and all the Marvel shows basically inhabit. So that to get, again, from capture all the way to distribution, there’s this whole process in the middle, and part of it is training. Part of it is support and working through the particular need of each production.”

Crisp surround sound

And what’s image without wall-shaking sound? Favouring Dolby Atmos, Scott Kramer, Manager of Sound Technologies, is thankful for its immersive three-dimensional trajectory. “Previously in traditional 5.1 and 2.0, the sound content is tied to specific speakers,” he says. “If you want to move something from one speaker to another, you have to move it with voltages and it’s a little bit cumbersome. This way, we’re freeing the sound from those constraints and allowing the sound to be rendered to a large room or a small room, and have that experience be the same, from the theatre to the home.”


The final sound mixing is done over a typical console, where faders for backgrounds, music, footsteps and dialogue are all measuredly active, whether the subscriber is listening on mobile or a full-fledged home theatre system. “We use the best codecs, the best compression algorithms, the maximum quality, regardless of internet connection,” Kramer states. “We’re building every single aspect of the audio pipeline at the same time; it’s kind of an all-fronts effort. My role as primarily a research engineer is to find production technologies that are coming out, and test them in this room and see if they have application for our company.,” says Kramer.

Delivery is key

When all that data is pulled together into a concise episode or film, the testing process for seamless viewing is predictably rigorous. The Los Gatos HQ houses several anechoic chambers, in which various smartphones actively stream content under assigned bandwidths from various countries. It’s a remarkable service to oversee just where lags occur, but isn’t so dependent, given networks around the world do undergo random and spontaneous breaks. According to the company, it helps drive further innovation in order to prep for breaks in service.

So when tests are given the proverbial green ticks, that’s where the Content Delivery folks step in. Ken Florance, who considers his job to be ‘inventing Internet TV’, explains that one of the primary constituents of their streaming infrastructure is the control system, which pretty much overlords everything from the moment you play something; it has knowledge of Internet routing systems and which network should be associated with which pieces of infrastructure in which region.

One of Netflix’s secrets to success is their custom Open Connect Network, a proactive, directed caching solution, that is much more efficient than the standard demand-driven CDN solution, reducing the overall demand on upstream network capacity by several orders of magnitude. Basically, as the company grew to be a significant portion of overall traffic on consumer Internet Service Provider (ISP) networks, it became priority to be able to work with those ISPs in a direct and collaborative way. The building blocks of Open Connect are a suite of purpose-built server appliances, called Open Connect Appliances (OCAs). These appliances store and serve video content, with the sole responsibility of delivering playable bits to consumer and client devices as fast as possible.


In the event of particular launches on certain dates, Netflix takes care of all of that while you’re asleep. Creepy? “Networks are dimensioned for peak capacity,” Florance explains. “If you were building this network, you would have to have a network at least big enough to survive this peak of traffic.We want to be careful about when we’re moving content to the servers, because we don’t want to add load to peoples’ networks — we fill caches while you sleep. Most of what’s happening on the Internet is driven by consumers, and consumers are most active during primetime hours.And so, what we wanna do is position content onto these servers sometime off of peak, not during primetime hours, so that the content is there when people want to watch it.”

As for the pre-existing content, Florance explains that the company is constantly calculating the popularity of content and making sure the most popular content is out there on the servers that are inside ISP networks. For big new releases that will rake in huge viewing numbers, they’re prepositioning that content to servers as well. So, a big title such as Jessica Jones is copied to practically every server on the network.

So next time you press play, you now know there’s a whole anatomy of intricate technicalities that goes into any streaming service’s functionality — from start to finish.

The Indian market

Now what streaming service event can go without a special mention for the burgeoning Indian market, where binge-watching has very much become an habitual practice?


“The very unique thing about India is their cable market, developed as a pure ad-supported market, not any subscriptions,” comments Reed Hastings, “In every country in the world, cable is more expensive and the subscription service is part of what fuels the content eco-system. And India’s content world has been held back because of only ad-supported television across, so even HBO in India is a pure ad-supported network, no subscription fees — a very unique aspect. Netflix is more like the DVD or the movie theatres. It’s an incredible opportunity, because India’s cable infrastructure has been so fixed on this advertising-based model, that we can offer a complement to that... We just had a recent movie Love Per Square Foot that we debuted in India. The incredible thing is how successful it’s been around the world. And Love Per Square Foot is a classic Bollywood story, and it’s just had a really impressive global audience.”

The writer was in Los Angeles at the invitation of Netflix Inc.

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