Netflix's last red envelope

On 29 September 2023, Netflix posted (or mailed) their last red envelope, waving goodbye to their days of physically delivering films (or movies) to consumers. While some may see this as a sad day, essentially marking the end of DVD rentals and thus further relegating DVD technology to the history books, it is yet a further glimpse as to how Netflix has achieved such great success as a company.

From their first rental in 1988 (Beetlejuice, Tim Burton) to producing blockbuster films and TV series in-house that can be streamed directly to you, Netflix has become one of the world’s most recognizable brands, and a household name for any movie night. An impressive feat given the company’s relatively short history.

Underpinning this success is the company’s flexibility to move with the times, understanding the latest technology and consumer trends, and adapting and innovating to suit. Further, Netflix's success is also driven by their appreciation of providing the best user experience for the consumer, with the company being at the forefront of innovation in their sector.

Upon closer inspection we can see how Netflix's success is not simply down to chance, and we can see how their strengths of adaptability and innovation have been expertly commercialized to gain an advantage over the competition, and grow Netflix to what we know today.  With a global intellectual property portfolio consisting of thousands of patent, trade mark, design and copyrights, Netflix is a shining example of how understanding what IP you have, and how best to leverage it, can accelerate a business towards great success.   

Within the Netflix patent portfolio, we see a key example of a company keen to innovate, and adaptable to change. One of their first patents (US7024381 B1) protects a computer implemented process for renting items to customers, how customers may make choices based on a selection criteria, and how a subscription may be limited to a maximum number of rentals over a specified period of time. A couple of other notable patents early in the Netflix portfolio include its current rental processing system (US7848968 B1), the envelopes themselves (US7401727 B2) and its rental management system (US7546252 B1).  

Moving to their patent portfolio in 2023, we see how Netflix is adapting and innovating with the times, with pending patent applications for technologies such as automated video cropping, adaptive streaming for digital content distribution, new digital content distribution systems and methods, and ways of automatically matching recorded speech to script dialogue.

Netflix's patent strategy has also shown how they also maintain user experience as a driver in their innovation, with the well-publicized ‘skip’ feature, described in international patent application WO2019018164, a feature gratefully received every time a series has been binge-watched.

Netflix also possesses a strong portfolio of trademarks and registered designs. For example, Netflix has trade marked its logo and the word “NETFLIX” in Europe, with several other figurative trademarks, such as “Netflix 3D” and Netflix Super HD”, also being obtained. The corresponding trade mark registrations can also be found in the US, and other jurisdictions in which they operate.

More recently, Netflix has also protected their distinctive title sound with a sound mark (comprising a musical composition featuring two sixteenth note timpani strikes on D2 and D3, simultaneously with which are played three dotted half notes on D2, D4, and D5, for those interested).

Netflix owns several registered designs which mainly protect various parts of their proprietary Graphical User Interface (GUI). For instance, USD892851 protects “display screen or portion thereof with animated graphical user interface”, which you will definitely have seen if you use Netflix on your mobile device. A number of design registrations can now also be seen protecting various aspects of the GUI on mobile devices and Netflix.com, for Netflix's latest venture into gaming.

Netflix have also understood the value of licensing IP from third parties to grow their business and capture the interest of a growing number of consumers. For example, Netflix have expertly used both global licensing rights to provide blockbusters from third party studios to a worldwide audience; while also obtaining more regional licensing rights to provide localized content in different regions.

Therefore, from a quick dip into the Netflix IP portfolio, it becomes apparent how they have cemented their key values of adaptability and innovation with a strong IP strategy, building Netflix into what we know today. Netflix has been able to build a formidable IP portfolio because it started early, invested in and acquired IP globally, in line with its key strengths and drivers.

Netflix is a shining example of how maximizing the value of your IP through strategic management can be the difference between your business going to infinity (and/or beyond), or saying “hasta la vista baby” before you’ve even started.    

Finally, as it seemed a waste to not include these from my research:

The last DVD rented from Netflix was 2010’s True Grit, by the Cohen brothers.

The most rented DVD from Netflix was 2009’s The Blind Side by John Lee Hancock.

The actual name of the iconic red envelope is a Mailer (included because of personal interest…)