Does A More Connected Network Equal More Success?
The article entitled “How Robust Is Your Innovation Network: Comparing the Networks of Netflix and Hulu” discusses the role of innovation and patent networks under the two streaming giants. Netflix moved its attention to streaming in 2007, when Hulu started. In terms of the Innovation Networks that both companies formed by 2013, they consist of nodes, which are inventors, and edges, which show collaboration between two inventors. In many cases, there were co-investors who worked together on forming inventions. By today’s perspective, Netflix is booming both service-wise and customer-wise in comparison to Hulu.
However, their comparative Innovation Networks would suggest otherwise. Take Hulu’s Innovation Network for example: every node is connected to another node via edge(s). Whereas, Netflix’s Innovation Network has several inventors that do not connect in any way with other inventors. The prevalence of clustering is much stronger in Hulu’s Network than it is Netflix’s Network. This would suggest a generally weak edge between nodes in Netflix’s Network.
The article goes into an even more intriguing analysis of these networks. It extracts about 10-20% of the inventors who lead innovation and highlights them as the “backbone”. The article suggests, “Invention is a social phenomenon where trust is paramount”. And again, the results follow Hulu’s clustered network and Netflix’s distanced network: Hulu’s “backbone” spans the entire network while Network’s “backbone” spans just 62%. The article also looks at the most notable inventors in each network and determines that Netflix would suffer more greatly than Hulu if these significant inventors were removed from the network. Also, Netflix’s network would divide from five components to eight while Hulu’s network is still completely connected.
Because inventors are often bought away from companies, Netflix has much more to lose than Hulu if just these few important inventors leave. Yet, the company still has prevalence over Hulu. The article suggests that the cause for this may in fact be in Netflix’s marketing methods, as opposed to its patenting. So, as connected as these companies’ Innovation Networks may be, the larger intelligence of the overall organization may be the determining factor in success. Relating networks back to general networks, increased collaboration or friendship may not actually ensure success. Rather, it may have more to do with aggressive strategy.
Article Referenced: http://innovationbp.com/2015/08/21/how-robust-is-your-innovation-network-comparing-the-networks-of-netflix-and-hulu/