TDT4216 - APPLIED DATA SCIENCE

Individual Assignment

Netflix Inc.

October 15th, 2021

Content

1. Business Initiative .................................................................................................................................. 1

2. Business Stakeholders ........................................................................................................................... 1
3. Business Entities .................................................................................................................................... 2
4. Use Cases .............................................................................................................................................. 3
4.1 Prioritization of use cases on matrix.............................................................................................. 5
5. Data Sources.......................................................................................................................................... 5
6. Develop Scores ...................................................................................................................................... 7
7. Document recommendations and map scores ..................................................................................... 7
8. Bibliography........................................................................................................................................... 8
1. Business Initiative
Netflix Inc. is an American subscription service and entertainment company operating in over 190 countries
whose main service is distributing audiovisual content through an online platform. The company was
created as a DVD rental service in 1997. In 2007, they launched their streaming service and have since
added increasing amounts of content. Nowadays, Netflix participates in the production of artificial works,
from the creation or acquisition of the product to its diffusion.

Netflix remains a growth venture with 208 million paid memberships. In 2020, they added a record 37
million paid memberships respect the prior year, achieving an increase of 31% and $25 billion in revenue.
Despite the loss of subscriptions in the first semester of 2021, Netflix’s revenue is expected to grow by
more than 30% to approximately $12 billion in 2021, due increased rates/subscriptions.

To afford this, Netflix’s business initiative will focus on finding the balance between fares and subscriptions.

2. Business Stakeholders
Customers

Netflix is a customer driven company because their main source of income comes from customer
subscriptions. They need to keep clients satisfied to not have losses. Customers also have the power to
control the reputation of the site and influence the content Netflix produces or acquires based on what
they watch.

Netflix clients are the main source of income of the company.

On the other hand, clients are directly affected by the increase/decrease of the subscription fare.

Employees

 Marketing department

Marketing team is crucial for the company growth. They are responsible for different fields as content
creation and social media in order to promote the brand accurately and obtain new clients. However,
Netflix’s main marketing strategy is based on studying costumer’s activity in the platform. Big Data has
helped Netflix to analyze its customers, the market and in this way to continue growing by improving the
service to its subscribers through content and personalization.

 Software developers

They are in charge of creating the product of our business plan. They design, develop and maintain the
platform with enough performance to handle all the content and users’ activity.

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  Analysts

They are responsible for analyzing the content on the platform as well as the behavior of users. Analyzing
the impact of the content on the audience will help us to know trends and where to address future
investments.

Investors

Netflix is publicly traded and depends on some investors as: Vanguard Group, Capital Research, etc.

Providers

They provide the content to the company. They can be cinematographic houses that sell movies’ rights to
Netflix or productions with agreements with the company for the creation of original works. It’s important
to have a wide catalog of series and movies with the aim of keeping users entertained and satisfied.

Competence

Nowadays, there are other companies that offer similar services to Netflix and this makes harder earning
new clients.

3. Business Entities
Customers

As 99% of the income of the company come from clients’ subscriptions, analyzing users’ behavior it’s a
need for Netflix. Every client must have an account on the platform so, personal information as name,
email, telephone, location, streaming plan… tend to be saved. Also, clients’ activity in the platform it’s
completely recorded. In this way, parameters as frequency of use and content seen will help us to generate
better recommendations and keep clients subscribed to the service.

Employees

Netflix employees are responsible for giving the user an optimal service that can satisfy his experience on
the platform. It would be accurate to know data as the hours an employee work per day, education level,
experience.

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Marketing

Netflix spends a considerable amount of money in marketing for its own productions. From ads in different
social media platforms until big premieres, they tend to focus the attention in their different productions
and attract new clients with that. To measure the impact of marketing, we will need to obtain data as
subscriptions gain after releasing a series/movie and rating.

Platform and content

As a web-application, Netflix can collect data through features distributed across the platform. In this way,
data as web traffic, users’ clicks and other interactions can be recorded. Thus, the company will be able to
study users behavior.

Regional demographics

As a multinational, Netflix operates in many countries with different economic conditions. In this way,
studying these differences will be helpful for stablishing streaming plan prices in order to achieve business
initiative. For this, we would need to know parameters as the countries’ GDP, subscriptions per country
and catalogue extension.

4. Use Cases
1. Increase of new subscriptions
 The company’s revenue can grow if the number of subscriptions to the service increases. In
this way, we’ll be achieving business initiative.
 This use case can be the result of focusing the market in other regions of the world by creating
more content addressed to them.

2. Decrease number of churns

 To achieve business initiative is necessary to avoid having clients that cancel their
subscriptions. For this reason, Netflix needs to offer a more personalized experience and
content in order to satisfy customers.

3. Increase content addition

 To keep users interested and active, it’s convenient posting new content in the platform more
often. In this way, users will continue their subscription and new clients will appear.
 It’s also important to add just quality content that can be relevant for customers.

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4. Increase content marketing
 In order to reach more people, increasing the creation of advertisements to promote Netflix’s
content is a necessary marketing strategy. As a result, the brand will receive new subscriptions
and it will keep inactive users updated (and maybe make them active again).
 Creating extra content social-media oriented (behind the scenes, challenges, interviews…) will
build a stronger fan phenomenon around the film/series being promoted. Thus, the work will
become popular and will attract new potential clients.

5. Increase of streaming plan price

 Increasing streaming plan fares will provide the company of more incomes per subscription
and then will be easier to achieve business initiative.
 Netflix can justify this increase by extending works catalogue or offering new advantages.
 Otherwise, increasing prices can make clients cancel subscriptions, especially if there’s similar
services with lower prices.

6. Decrease competence
 Netflix can decrease competence by offering better service by adding more relevant and
quality content, offering more advantages than other services or decreasing the price of the
plan. With less competence, the company will increase the number of clients.

7. Get sponsors
 Getting a sponsor will allow Netflix not to depend exclusively on users’ subscriptions.
 On the other hand, having a sponsor forces the company to include ads in their platform and
content. This can bother users due they are paying for a subscription.

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4.1 Prioritization of use cases on matrix

Figure 1. Prioritization matrix distributing use cases depending on feasibility and business value.

5. Data Sources
1. Increase of new subscriptions

Data source:

- Customer data: name, surname(s), age, location, email, device used, card number.

- Marketing: which marketing campaigns, advertisement or promotions were used, how successful
they were, reachability of the event.

- Content: how popular is a film/series, engagement.

- Platform: how user-friendly is the platform, how good works the design of the platform with the
users.

- Statistics: how many people uses the platform per day, how fast a content become popular, trends,
how much time a customer spends in the app in a day.

- Subscription plans: which plans are the most popular, how much influence increasing or decreasing
plan’s price on losing or earning subscriptions.

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4. Increase content marketing

Data source:

- Marketing: what type of marketing technique should be used for promoting the work, how big the
campaign should be, range of the capital the brand should invest in it.
- Events: does it need a premiere this film/series? How many events the company should host for
promoting the work.

3. Increase content addition

Data source:

- Content: Is it Netflix original content or another cinematographic film/series? Is this content part
of an already successful saga?
- Finances: range of capital should be spent on the production, benefits of producing this work.
- Release: date of the release, does this content need a premiere?
- Platform: Is it the platform prepared to support the addition of this new content?

Use cases
Data Increase Increase content Increase
subscriptions marketing content
addition
Customer data 4 1 1
Marketing 4 4 0
Content 4 4 4
Platform 2 0 4
Statistics 4 4 4
Subscription plans 3 0 0
Events 0 3 0
Finances 3 3 3
Release 2 4 0
Figure 2. Relevancy of data sources in every case.

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6. Develop Scores
1. User satisfaction: This score allows Netflix to know how happy are users with the platform. In this
way, the company can improve some features of the platform or just preserve them.

2. Market extension: This score will focus on reaching new potential clients.

3. Innovative content: Considering all the competence Netflix has as a streaming subscription service,
it’s necessary to offer content special enough to keep clients subscribed. For this reason, investing
in innovative content can make the platform still being a leader in its market.

4. Personalized marketing: Keeping clients subscribed isn’t possible just by adding quality content and
providing a leading platform. We need to personalized the experience to every one of the users to
make them stay. Big data allows us to do that by studying the activity of every one of our clients.

7. Document recommendations and map scores

Use cases Recommendations Scores

Increase Recommend target new markets Market extension
subscriptions (countries, groups)
Recommend adding new features to User satisfaction
the subscription plan.
Recommend increasing promotion Market extension
of the platform
Increase content Recommend new marketing Market extension
marketing techniques social-media oriented.
Recommend increasing User satisfaction
personalization of Personalized marketing
“Recommendations” section
Increase content Recommend producing innovative Market extension
addition content addressed to different Innovative content
targets. Personalized marketing
Recommend producing content User satisfaction
faster.
Recommend producing more Market extension
content in countries with small User satisfaction
Netflix’s catalogue.
Figure 3. Table with recommendations and scores for business initiative

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8. Bibliography
1. Netflix Inc. Annual Report 2020/Proxy Statement 2021: https://ir.netflix.net/financials/annual-
reports-and-proxies/default.aspx

2. Google. What Are Netflix’s Plans for 2021: https://www.makeuseof.com/netflix-plans-for-2021/

3. Google. A case study on Netflix’s Marketing Strategy:

https://www.themarcomavenue.com/blog/a-case-study-on-netflixs-marketing-strategies-tactics/