Netflix inc::Streaming away from dvds

-David

Wesley

By Group 2:Apoorv Parmar

Chirag Gaba
Kushaang Deswal
Pulkit Kapoor
Shreya Mahajan
Siddharth Sharma

COMPANY OVERVIEW
Founded in 1997
Offered DVD home delivery via snail
mail.
Due to complaints about high fees
and slow delivery , in 1999 the no
late fees policy was launches
During dotcom boom , subscription
model put in place
2001 announced intention to create
a VOD business.

$1 billion business and almost

$64 million in cash flow.
VOD, pay-per-view, and
streaming are gaining popularity
Limitations in computer to
connectivity and in access to
content, but evolving quickly
with technology
Substantial Investments in
Video-on-demand(VOD): 2006,
$10 million, 2007 $40 million

 In 2010, Netflix began offering its streaming services to residents

in Canada and in 2011, initiated services in 43 countries
worldwide.The mail services only continued in North America as it
did originally.
In 2011,Netflix
announced that there would not be a subscription
plan that offered both the option for streaming and DVDs- by mail
service. Instead, the services would be offered in two separate
packages.
There was a negative response from the current customers and
Hastings decided to only continue the streaming services offered
through the name Netflix Inc. and all mail services would be
accessed through the website Qwikster.com.
This caused an uproar from customers and the stock price of the
company dropped considerable in a short time.
This idea was abandoned for more negativities and a continued
drop in stock price.

DEFINING THE ISSUE

1.The main problem Netflix is facing is retaining
their consumer base and profit margins.
2.Stock prices of Netflix have plummeted.
3.After separating DVD and streaming business,
Netflix is facing a decline in both customer and
stakeholder confidence.
4.Netflixs content was becoming redundant and
facing serious threat from competitors hence,
there was a major issue of reestablishing itself as
the dominant internet streaming ,DVD mailing
company and to recover from the wrong decision
that the company took.
5. Regain trust of stakeholders and customers and
also reaffirm stability of company to them.

DECISION PROBLEM IDENTIFICATION

What would be the best VOD AND

STREAMING model and marketing
strategy for Netflix that would help the
company retain its position as a leader in
the home video market?????

GENERATING ALTERNATIVES
Alternative 1
Focus on original content and exclusive
partnership.
Differentiate the product offerings and drive viewership
through exclusivity.
Alternative 2
Add premium videos Via Pay-Per-view Add-On.
Offer services at the same monthly price; offer premium
viewing options that can be purchased on a pay per view
basis.
Alternative 3
Discontinue the DVD mailing service & expand to
International Markets
Expand to Potential International Markets and gradually
liquidate DVD mailing infrastructure.
Alternative 4
Diversification
Offering music streaming services with movie streaming

SELECTING DECISION CRITERIA

Regaining
customer
and
stakeholders trust .
Maintaining the leaders position in
the market .
Increasing customer base .
Differentiating
ourselves
from
competitors.

SELECTING
ALTERNATIVES
SELECTING
ALTERNATIVES
Focusing on original content and exclusive
partnership, discontinuing the DVD mailing
service & expanding to International
Markets and diversification would be the
best suited alternative in this case .

EVALUATING ALTERNATIVES
1.Focusing on original content and exclusive partnershipDifferentiating the product offerings and driving viewership
THROUGH EXCLUSIVITY. IT WOULD INCLUDE PARTENERSHIP WITH DISTRIBUTORS FOR
GETTING ACCESS
TO LATEST CONTENT AND MAINTAINING GOOD QUALITY.

2.Discontinuing the DVD mailing service & expanding to International Markets

Expand to Potential International Markets IN ORDER TO INCREASE CUSTOMER BASE and
gradually liquidating DVD mailing SERVICES WOULD HELP IN KEEPING PACE WITH THE
FUTURE MARKET AND CAPTURING IT IN THE FUTURE.
3. Diversification
THE IDEA WOULD BE TO INTRODUCE MUSIC STREAMING PAIRED WITH THE MOVIE
STREAMING SERVICES ALREADY OFFERED. MUSIC AND MOVIES GO HAND IN HAND AND
IT WOULD BE A RELATIVELY EASY AND COST EFFECTIVE WAY TO ATTRACT AND KEEP
CUSTOMERS.

IMPLEMENTATION PLAN
Immediate Actions1.Market Research on DVD by Mail consumption.
2.Research on media habits on emerging markets.
Mid Range Actions1.turn entire focus onto online streaming services IN A FEW YEARS.
a)Establish Contract with Big 8.
2.Selection of 2-3 countries to offer online streaming pilot programs. Focus on performance analysis.
Long Run1.Revisit Performance Analytics.
2.Continue Expansion in more and more international markets.
a)$1 billion funding needed in long term debt.
b)Implement U.S strategies , once established properly.

THANK YOU