Mohita Singh

NETFLIX – Case Study

Business Analyst Experience Programe
Introduction

Netflix is a subscription-based video on-demand over-the-top (OTT) streaming service. It was

founded in 1997 by American entrepreneurs Reed Hastings and Marc Randolph. It was
initially a DVD-by-mail movie rental service.
In 1999 Netflix began offering an online subscription service through the Internet.
Subscribers chose movie and television titles from Netflix’s Web site; the shows were then
mailed to customers in the form of DVDs, along with prepaid return envelopes, from one of
more than 100 distribution centres.
In 2007 Netflix began offering subscribers the option to stream some of its movies and
television shows directly to their homes through the Internet. For most subscription plans,
the streaming service was unlimited. Netflix subsequently partnered with manufacturers of
various consumer electronics products, including video game consoles and Blu-ray Disc
players, in order to enable its videos to be streamed over an Internet connection to those
devices.
In 2010 Netflix introduced a streaming-only plan that offered unlimited streaming service
but no DVDs. Netflix then expanded beyond the United States by offering the streaming-only
plan in Canada in 2010, in Latin America and the Caribbean in 2011, and in the United
Kingdom, Ireland, and Scandinavia in 2012. By 2016 its streaming service was available in
more than 190 countries and territories.

Type of site OTT streaming platform

Available in 45 languages
Headquarters Los Gatos, California, U.S.
Area served Worldwide (except China, Crimea, North Korea, Russia, and Syria)
Industry  Entertainment
Products  Streaming media
 Video on demand
 Digital distribution
Services  Film production
 Film distribution
 Television production
 Television distribution
Users 260.28 million (as of January 23, 2024)

Business Strategy
Here are some key aspects of Netflix's business strategy:
1. Original Content Production: Netflix has increasingly focused on creating its own
original content, including TV shows, movies, documentaries, and stand-up specials.
By producing original content, Netflix aims to differentiate itself from competitors,
attract and retain subscribers, and control costs by reducing reliance on licensing
content from other studios.
2. Data-Driven Decision Making: Netflix heavily relies on data analytics to inform its
content creation, acquisition, and recommendation algorithms. It collects vast
amounts of data on viewer preferences, viewing habits, and engagement metrics to
personalize recommendations and optimize its content library.
3. Global Expansion: Netflix has aggressively pursued international expansion to tap
into new markets and fuel subscriber growth. By offering a diverse range of content
in multiple languages and regions, Netflix aims to cater to a global audience while
also investing in local content production to appeal to specific regional tastes.
4. Subscription-Based Model: Netflix operates on a subscription-based model, offering
tiered pricing plans with different features and streaming quality options. This model
provides a steady revenue stream and allows Netflix to invest in content production
and technology infrastructure.
5. Technology and Innovation: Netflix invests heavily in technology and innovation to
enhance the user experience and stay ahead of competitors. This includes
developing streaming technology to deliver high-quality video content across various
devices, improving content recommendation algorithms, and exploring emerging
technologies like virtual reality and interactive storytelling.
6. Partnerships and Licensing: While Netflix prioritizes original content, it also licenses
popular TV shows and movies from other studios to supplement its library.
Additionally, Netflix occasionally partners with other content providers or production
companies for co-productions or distribution deals to enhance its content offerings.
7. Flexible Release Strategies: Netflix has experimented with flexible release strategies
for its original content, including releasing entire seasons of TV shows at once (the
"binge-watching" model) and staggered releases with episodes dropping weekly.
These strategies aim to cater to different viewing preferences and generate buzz and
anticipation for new releases.

Strategies to increase Revenue

Netflix can employ several strategies to increase its revenue further:
1. Price Adjustments: Netflix could consider adjusting its pricing strategy, potentially by
introducing new tiers with additional features or adjusting prices based on regional
economic factors. However, any price changes must be carefully balanced to avoid
significant subscriber backlash.
2. Expansion of Original Content: Investing further in original content production can
attract and retain subscribers, especially if the content appeals to diverse global
audiences. This could involve producing more high-budget shows and movies, as well
as expanding into new genres and formats.
3. Partnerships and Licensing Deals: While Netflix focuses on original content, it can
still benefit from strategic partnerships and licensing deals to supplement its library
with popular content from other studios. These deals should be structured to ensure
that the content acquired aligns with Netflix's brand and audience preferences.
4. Advertising: Netflix can introduce a free ad-supported tier with some limited content
and fewer features into the platform. This way they can attract more customers and
earn from advertising as well.
5. Merchandising and Licensing: Netflix can explore opportunities to monetize its
popular intellectual properties through merchandise sales, licensing agreements for
spin-off products, or partnerships with retailers. This could include selling branded
merchandise related to popular shows and movies or licensing characters and
storylines for use in other media.
6. International Expansion: Continuously expanding into new international markets can
drive subscriber growth and revenue. Netflix can tailor its content offerings and
marketing strategies to appeal to specific regional preferences and cultures, helping
to attract a broader audience globally.
7. Technology Innovation: Investing in technology innovation can improve the user
experience and increase engagement, ultimately leading to higher subscriber
retention and revenue. This could involve developing new features, improving
streaming quality, or expanding compatibility with emerging devices and platforms.
8. Diversification of Revenue Streams: Netflix can explore diversifying its revenue
streams beyond subscription fees. This could include offering premium features or
add-on services for an additional fee, such as exclusive access to certain content,
early access to new releases, or enhanced streaming options.
>> Should Netflix continue to operate in the Indian market alone, or work
with a local player in India to accelerate its growth in the Indian market?

Netflix operates independently in the Indian market. This allows Netflix to maintain full
control over its operations, content strategy, and brand image. This approach enables Netflix
to tailor its offerings directly to the Indian audience without the need to compromise or
negotiate with a local partner. Without any partnership and competitive market strategy,
Netflix has hained a good customer base in India.
However, operating alone has its own set of challenges such as navigating local regulations,
competition from established local players, and understanding the unique preferences and
cultural nuances of the Indian audience.
To reach more local audience Netflix would need to invest significant resources in localizing
its content, marketing efforts, and customer support to effectively compete in the Indian
market.
Although Netflix is completely capable of operating alone in the Indian market, it can
definitely enter into a limited time partnership with local players to gain more consumers in
less time. It can also acquire local streaming services and invest more into licensing of
regional contents to reach a larger and diverse set of audience.