Running Head: Netflix Products: STRENGTHS AND WEAKNESSES

Netflix Products: Strengths and Weaknesses

Kateryna Zyrianova

ID: 336974885

California University of Business and Technology

BA 301: Introduction to Writing/APA

Cristopher Viner

July 22, 2019

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NETFLIX PRODUCTS: STRENGTHS AND WEAKNESSES

Abstract

Netflix is a streaming video service that offers consumers a wide variety of entertainment

content based on the subscription model. Netflix has a long history in the marketplace and

demonstrates that a successful company should adapt and be able to change its product and

services based on the wants and needs of its consumers. This paper will examine the strengths

and weaknesses of products that Netflix offers; and how the selection of the products by the

company is based on analysis of consumer behavior on their platform.

Keywords: consumer behavior, marketing, products

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NETFLIX PRODUCTS: STRENGTHS AND WEAKNESSES

The Research and Design Process Before Netflix Launch a New Product

Netflix uses its data, collected from the viewers, to predict how well a new product would

be received. They analyze viewers activity on the site such as: watched titles, average time spent

on the website, how long does it take a viewer to pick a new title, how does the viewer choose a

new title (main page, searching specific title or genre, checking recommendations). In addition,

they take a look at the consumer’s identity (gender, age, ethnicity, location) to match with their

recorded activity on the site and predict possible preferences.

Strengths and Weaknesses of Product Introduced by Netflix

The Key Strengths of the Netflix Products

The strengths of the product that Netflix offers, which includes all the content available

on the platform as well as the future projects, since a user invests in an upcoming content as well

by paying the subscription, are availability of funds, knowledge of consumer’s preferences,

personalized suggestion system. A subscription system offers a company more flexibility in the

market, since the amount of funding is more predictable. This way the company is able to

provide or adjust products and services based on user’s choice with less financial risk. The data

of consumer’s behavior on the platform helps a company to improve its service, predict success

rate of a new product, and to market it to the target consumer. Personalized suggestion system

helps to market new titles in a shorter time with a higher success rate, as well as to increase a

customer’s watch time on the platform that translates in higher customer retention rate.

A Marketing Strength. Netflix has an advantage in marketing since it mines user’s data

from its own resources. While a lot of companies spend significant amount of money to analyze,

segment and target consumers and outsource data from third-party companies, like Facebook,

Google, etc. Netflix does spend money on marketing, but to promote new content and increase
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NETFLIX PRODUCTS: STRENGTHS AND WEAKNESSES

the number of its consumers. Lynch (2018) in his article for ADWEEKLY points out that “In its

Q2 letter to shareholders Monday, the streaming service revealed that it has already spent $1

billion on marketing in the first six months of this year (almost doubling its year-over-year

marketing spend), putting it on track to top $2 billion in marketing spend for 2018” (Lynch,

2018). Since all the content they obtain stays on the platform for a long time, the company does

not focus on reaching high number of views in a short period of time. This is an advantage as

traditional media has only a short time span initially; it either airs weekly or is shown in the

movie theaters for a month or so. Thus, Netflix has the time leverage and can spend more time to

create better campaigns by targeting the right consumers, as well as analyze its previous

marketing strategies and improve.

The Key Weaknesses of the Netflix Products

The weaknesses of the product are shorter consumer cycle for a product and a decision to

produce a new product is made by a smaller number of people. The traditional media has a

longer consumer cycle. As an example, a show on a Network airs weekly, so one season would

take two to three months of screen time. All this time the Network advertises the show heavily

and tries to bring more viewers for each episode. On the other hand, Netflix releases all the

episodes of a season at once, and consumers can binge watch the show in a week or two. This

way viewers move on to a next show in a shorter period of time. When a movie or a show is

developed for the traditional media there is a lot of negotiation and analysis happening between

multiple companies; there is more control on the appropriateness of its content. Netflix makes

decision for the new title within a smaller group of people, so there might be oversights in

approving some of the content or marketing it to the wrong age group. One of the Netflix’s show

Thirteen Reasons Why was heavily criticized by media outlets for romanticizing suicide and
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NETFLIX PRODUCTS: STRENGTHS AND WEAKNESSES

targeting teen auditory. The show was based on the book and depicted a confession of a high

school student who committed suicide because of bullying and sexual harassment. The

comments of the media were that the girl’s story was delivered to direct and made her seem like

a hero, which can provoke some teenagers to follow her example. At the same time as conveyed

by Dr. Elana Premack Sandler (2017 ) observation: “A lot of people want to be supportive of 13

Reasons Why because it could open up further needed conversation between adults and teens

about suicide” (Sandler, 2017).

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NETFLIX PRODUCTS: STRENGTHS AND WEAKNESSES

References

Lynch, J. (2018, July 17). Netflix Is Spending More on Marketing This Year Than Some

of Its Rivals Are on Content. Retrieved from ADWEEK:

https://www.adweek.com/creativity/netflix-is-spending-more-on-marketing-this-year-than-some-

of-its-rivals-are-on-content/

Sandler, E. P. (2017, April 24). 13 Reasons Why "13 Reasons Why" Isn’t Getting It

Right. Retrieved from Psychology Today:

https://www.psychologytoday.com/us/blog/promoting-hope-preventing-suicide/201704/13-

reasons-why-13-reasons-why-isn-t-getting-it-right