NETFLIX

http://www.youtube.com/watch?v=Txw7yefrzB8 - COMPAIA
http://www.youtube.com/watch?v=dBOP5qdX1j0 - SERIES
http://www.youtube.com/watch?v=p58AdadF7pE - SERVICIO


Market: Online video market

COMPANY OVERVIEW
Founder: Reed Hastings
Netflix was founded in 1997 after Hastings, a successful entrepreneur, found a
rented copy of Apollo 13 in his closet and had to pay a $40 late fee on it. Hastings
began to consider alternative ways to provide a home movie service that would
better satisfy customers. The business that emerged was an online subscription-
based DVD rental service that used the U.S. Postal Service to deliver DVDs to its
subscribers.
Its original website was launched in early 1998, most available movies for rent in
video stores used the VHS cassette format. In contrast, Netflix concentrated efforts
on early-technology adopters who had recently purchased DVD players.
By 2000, Hastings had settled on a business model and launched Netflix. The
company charged users a monthly subscription price for an unlimited number of
rentals, with no late fees. Pricing was tiered based on how many DVDs a user had
at any given time (i.e. having one DVD at a time cost less than having two DVDs at
the same time). To use the Netflix service, users paid a monthly subscription fee
via credit card, created a profile, set up a queue of movies they wanted to watch,
and were mailed the DVDs via the U.S. Postal Service.
Since its 1997 founding, Netflix had built a reputation for innovation and a $3.2
billion business by offering film rentals on DVD discs through the mail.
In 2007, Netflix expanded into streaming media, the instantaneous delivery of
media to computers, set-top boxes, and mobile devices via broadband Internet
connection.
By 2011, the company was pursuing streaming as its core business. At the same
time, Netflix was engaged in international expansion. In 2010, Netflix debuted
streaming service (but no DVDs) in Canada, and in 2011 streaming video became
available in 43 countries in Latin America and the Caribbean. In 2012, Netflix
began streaming operations in the U.K. and Ireland, further distancing itself from
the rental DVD business that had made it famous.


FACTOR OF SUCCESS
Prior to the entrance of Netflix, the industry had been dominated by Blockbuster
and other chains of video rental stores. These stores carried a limited selection of
videos with a heavy emphasis on new releases. They typically charged $3 to $4
per rental and imposed late fees if the video was not returned within a specified
time period. Netflixs monthly subscription, no late-fee, DVD-by-mail model
upended the industry and eventually drove Blockbuster and many independent
video rental stores into bankruptcy.
After the addition of streaming services in 2007 and the international expansions of
2010 and 2011, Netflix began operating in three business segments: domestic
streaming, international streaming, and (domestic) DVDs by mail.

INNOVATION CAPABILITY
- LEADERSHIP & ORGANIZATION -Common vision and innovation
-They love movies
Each year a few hundred of them flock to the Sundance Film Festival to watch
films obsessively (and subsequently talk about them all year long). In their theater
in Los Gatos, California, they show films screenings at work, and best of all,
employees get a free 8-out Netflix account to gorge themselves on movies to
satisfy their cravings.
- CULTURE & VALUES collaborative, culture, incentives
-Freedom and responsibility culture
Hastings said Netflix success by focusing on what employees get done, not on how
many days they worked. The CEO does make sure to be a good role model and
takes vacations, where he can do some creative thinking.
Netflix is known for having an employee-oriented culture, including unlimited
vacation time for salaried workers and allowing employees to take any amount of
their paychecks in stock options. Keeping vacation unlimited, said Hastings,
requires mature, responsible employees who care about high-quality work.
Managers are encourage to let staff go if they're not doing the job, and to value
efficiency over attendance--rewards shouldn't necessarily go to those who arrive
early and work late, if other staff achieve the same in a standard day. Top staff
should be paid well so they don't leave. Staff are encouraged to say what they
think, "even if it's controversial."

- PEOPLE & SKILLS discipline approach, capabilities
Netflix employed more than 2,000 people worldwide in 2011, most of whom worked
at its various U.S. DVD distribution facilities.
Teamwork is highly valued in the Netflix culture, with team members even
contributing to peer employee reviews. Their philosophy is the responsibility of
management at every level, to assemble a team that will generate huge success.
To accomplish this, they seek to fill every position in the company with
exceptional performers.

- PROCESS AND TOOLS -
The company acquired streaming content through licensing agreements with movie
studios, TV networks, and other distribution companies. Separate distribution deals
were negotiated to make content available on a range of Internet-connected
devices such as PCs, smartphones, tablets, video game systems (e.g., Microsofts
Xbox, Nintendos Wii, and Sonys Playstation), set-top boxes that were either
provided by cable TV providers or bought by consumers (e.g., Apple TV or Roku),
and Internet-enabled TVs, DVD players and Blu-ray players.

MARKETS/CHANNELS
- Netflix depended on the U.S. Postal Service to deliver DVDs to its
subscribers. DVDs are small and light, enabling inexpensive delivery
and easy receipt by nearly every potential U.S. customer.
- They created a Web portal rather than simply a subscription service.
-
BUSINESS MODEL
Based in 1) value, (2) convenience, and (3) selection. Hastings referred to
value customers as eBay customers, those to whom Internet shopping was
an opportunity to target a great deal. Convenience and selection, in contrast,
attracted the Amazon customers, those who used online shopping as an
alternative to traveling to retail outlets and choosing among limited in-stock
offerings.