NEHA | POOJA | AAKAR | SONALI | ESHANA | BARKHA

Will Netflix be able to sustain its position

as a leader in media industry and retain
it’s customers perception by entering in the
online video market?
 Netflix- Company’s Background & History
• Online subscription based DVD rental service
• Netflix’s flagship subscription plan offered monthly rentals allowing customers to hold up 3 movies at any
time for a monthly fee of $17.99
• Revenue of $1Billion in 2006
• Founded in 1997 by Mark Rudolf and Reed Hastings
• Originally Netflix offered home delivery of DVDs through mail
• Introduced monthly subscription service in 1999
• 9.4 million subscribers as of Q4 2008
• 2009 forecast of 10.6 to 11.3 million subscribers
• Netflix Competitive Advantage
• First-mover advantage in on-line rental
• Patented method of web-based DVD selection
• Customer-centric, monthly subscription-based service
Netflix Services Netflix Service Features
Service Plan Options: • No Due Dates
• Unlimited Plans • No Late Fees
• $8.99 1 DVD at a time • No Cancellation Fees
• $13.99 2 DVDs at a time • Free DVD Shipping – Both Ways
• $16.99 3 DVDs at a time • Blu-ray Substitution, for a Fee
• Less popular plans of 4-8 DVDs at a
time available
• Unlimited online viewing on all
unlimited plans
• 1 Limited Plan
• $4.99 1 DVD at a time (2 per month)
• 2 hours of online viewing
Customer Loyalty
• Consistently maintain 84% - 86% of existing customers quarter over
quarter.
• Voted #1 online retailer 8 consecutive periods by Foresee/FGI
Research
• Achieved Through:
• Ease of Use-order through websites that included a search engine allowing customers to
sort through its selections by title , actor, director and genre
• Fast Delivery (97% in one day)
• Size of Selection (Over 100,000 DVD titles)
Netflix- Subscriber growth
Subscriber growth
7000

6000

5000

4000

3000

2000

1000

0
1999 2000 2001 2002 2003 2004 2005 2006

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