Who’s Presenting?

Jaimin Dharamveer Arpit Virendra

Arani Suryansh Ankit

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Company Profile

Netflix is one of the world's leading entertainment services with over 247 million paid
memberships in over 190 countries enjoying TV series, films and games across a wide
variety of genres and languages. Members can play, pause and resume watching as much
as they want, anytime, anywhere, and can change their plans at any time.

Opening price: $ 124.96 on January 3, 2017.

Stock Price: ATH $ 331.44 on March 5, 2018.

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Company Profile

• Netflix Branding
• Subscriber Growth
• New Content Acquisition
• Marketing and Advertising
• Netflix’s Title Selection Software and Efforts to Enhance Its Interface with Users

Play My List
 About Subtitle 2 Subtitle 3

Company Profile

• Netflix Branding
• Subscriber Growth
• New Content Acquisition
• Marketing and Advertising
• Netflix’s Title Selection Software and Efforts to
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Netflix Expansion

September 2010 Canada

September 2011 42 countries in Central America, South
America, and the Caribbean
January 2012 United Kingdom, Ireland
October 2012 Denmark, Sweden, Norway, Finland
September 2013 Netherlands
September 2014 Austria, Belgium, France, Germany,
Luxembourg, Switzerland
March 2015 Australia, New Zealand
September 2015 Japan
October 2015 Spain, Portugal, Italy
January 2016 Rest of the world—some 130 countries (but
excluding the
People’s Republic of China, North Korea,
Syria, and Crimea)
AVAILABILITY
 Barriers in International Market

• Wo r l d ’ s m o s t m a s s i v e m a r k e t f o r e n t e r t a i n m e n t .
• Government censors.
• Protect aspiring local providers.
• Licencing arrangement with iQiyi (pronounced Q wee) with some
60 million subscribers.
• Building awareness of the Netflix brand and Netflix content.
• U.S. government had instituted restrictions precluding all U.S.-
based companies from having operations in North Korea,
Syria, and Crimea
Fast Changing
Entertainment Industry
1. Increasingly pervasive consumer access to high-
speed Internet connections.
2. The variety of devices and downloadable apps
that consumers could use to access both
broadcast and streamed entertainment programs.
3. The mounting intensity with which well-known,
resource-rich companies were competing for
viewers of entertainment programs.
About Competitors Subtitle 3

Major Competitors

1 2 3
 About Competitors Subtitle 3

• Amazon Prime member for a fee of $119 per year

or $11.99 per month
• 100 million Amazon Prime members globally.
• Prime membership program ,unlimited two-day

1
shipping to customers.
• Debuting NFL Thursday Night Football on
Prime Video
• Amazon Prime member included discounted prices
on Kindle eBooks
• Amazon made Prime Video more attractive to
Prime members by: adding Prime Originals to its
About Competitors Subtitle 3

• Hulu had 20 million subscribers as of May 2018,

up from 12 million in May 2017.
• The subscription fee for Hulu was $8 per month
for regular streaming and $12 per month for

2
commercial-free streaming.
• Hulu also offered plans that included 50 or more
live TV and cable channels.
• The Hulu library of offerings included all over
15,000 back season episodes of 380+ TV shows,
over 425 movies.
• Hulu was a joint venture co-owned by Walt Disney
(30 percent), Fox (30 percent), Comcast (30
About Competitors Subtitle 3

• Anytime monthly subscription price of

$14.99 (as of 2018).

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• HBO’s library that included Valley, Game of
Thrones, True Detective, Big Little
Lies, Sharp Objects)
• HBO NOW and HBO GO
• HBO was a division of Time Warner, which had
agreed to merge with AT&T, pending
government approval.
 About Competitor Model

NETFLIX’S
BUSINESS MODEL
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 NETFLIX’S
BUSINESS MODEL
• Domestic Streaming
Segment
• International Streaming
Segment
• Domestic DVD Segment
 NETFLIX’S
BUSINESS MODEL
• Domestic Streaming
Segment
• International Streaming
Segment
• Domestic DVD Segment
 slideative

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Netflix’s
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Strategy
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My List Rate Share

 My List Rate Share

Strategy Strategy

E1 : Growing the number of

domestic and international
streaming subscribers.

E2 : Enhancing the appeal of its library of

streaming content, with an increasing
emphasis on exclusive original movies and
TV series produced in-house.

E3 : Spending aggressively on
marketing and advertising.
 My List Rate Share

Strategy Strategy

E4 : Expanding the number of

titles that members could
download for offline viewing.

E5 : Continuously enhancing its

user interface
 PASTEL Analysis

Political
• In the US, telecom giants like AT&T are insisting on stricter usage regulations. If stricter usage regulations are imposed, then internet prices
would rise, which would threaten the business model of Netflix.

• Tax structures in countries differ, which directly impacts the Company's cost structure. For example, in the EU, Netflix is taxed the same
way as traditional media.

• Netflix also faces resistance from certain governments. For example, China does not allow streaming of foreign content, which is why
Netflix sells licenses to local companies. This limits the revenue-generating potential of the company.

• U.S government also restricts U.S. based companies from setting up operations in certain countries, like Syria.
 PASTEL Analysis

Economic
• Netflix has around 117 million memberships which makes it a global leader in internet streaming

• The Company’s pricing structure is competitive compared to traditional television services

• Issue of exchange rates affects Netflix the most, as countries with weak currency deem Netflix as a luxury
 PASTEL Analysis

Social
• Netflix has shifted the demand from tv sets to smartphones as most people watch movies on phones now

• Entertainment is fitting more in the busy lives of the consumer

Technological
• 4k technology, if implemented, will give Netflix a competitive advantage

• Investment in Hermes technology for fast translation

• 5G technology in smartphones allow faster streaming

 PASTEL Analysis

Environmental
• Carbon footprint due to access to data server

• Netflix accounts for around one-third of internet traffic in North America and is being pressurized to shift to renewables

• Rated D by an independent agency

Legal
• Blocking workarounds imposed which would restrict users from accessing content from other countries

• Confusing contracts with customers

 Porters 5 Forces
Threat of New Entrants- Moderate
• Low Initial investment
• High content creation cost
• Inabllity to stream Initially due to long term licenses.
• Minimal difference between competitors

Competitive Rivalry- High

• Local competitors in regional languages- Free
• Hotstar, Amazon, Apple, YouTube

Bargaining Power of Buyers-High

• No brand loyalty
• Primarily younger audience
• Low switching costs
• Most local players offering Free
 Porters 5 Forces
Bargaining Power of Suppliers- High
• Dependent on Content developers

Threat of Substitutes- High

• Theatres, gaming, cable, YouTube
 Issues Recommendation

1 3 8 10 13 15 17
Problems in International
Expansion Diversification

2 4 9 11 14 16 18

19 21 23 25 27 29 4
Growing Debt
and Create Alliances
Expenditures
20 22 24 26 28 30 5

6 8 10 12 21 23 25
Heavy Reliance on
third-party Pairing up with
Content providers Cable TV
7 9 11 13 22 24 26
1 3 8 10 13 15 17
Problems in International
Expansion Diversification

2 4 9 11 14 16 18

19 21 23 25 27 29 4
Growing Debt
and Create Alliances
Expenditures
20 22 24 26 28 30 5

6 8 10 12 21 23 25
Heavy Reliance on
third-party Pairing up with
Content providers Cable TV
7 9 11 13 22 24 26