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Netflix

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on 12 December 2013

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Transcript of Netflix

3 Segments
o Domestic DVD rentals
o Domestic streaming
o International Streaming

Total of more than 40 million subscribers
o 12 million DVD – 2,000 movies a day
o 29.93 million US
o 9.19 million abroad

Promotion
History
Past Marketing Strategy
Current Marketing Strategy
Marketing Mix
Price
Product
Placement
Target Market
Segmentation
Company Analysis
Strengths
• Original Content
• Fast Streaming
• Large target Market
• Increasing Stocks
• Strong Brand Awareness
• Industry Leader
• Expanding International Market
• TV Too
• Steady Increase in customers
Weaknesses
• Debt to increase original content and to market internationally
• Credit risks that could impact new loans
• Physical media delivery service is suffering
• Stock is very volatile
• Lack of recent movie titles in "Instant watch"
• Qwikster
Opportunities
• Marketing expenses are decreasing

• Increasing market of internet users

• Expanding into Latin American regions and Europe

• Differentiation -> flat rate system

• Original Content

• cord cutting
Threats

Competitors like HBO have 114 million members
USPS might eliminate one day deliveries
More and more competitors in the streaming industry
Amazon Prime service
Primary Research
Competition
Our Level of Focus
We decided to focus on Netflix as a
brand,
recognized in American households
Past Advertising
"Mission Statement"
Competitive Landscape
Company Differentiation
- Streaming videos and television shows

- Mail in DVDs
Mailing: U.S.

Streaming: U.S.
Canada
2011: Mexico
Carribean
Central/South America
2012: UK
Ireland
Norway
Finland
Denmark
Sweden
2013: Netherlands

Streaming only:
a) unlimited (watch on up to 2 devices at a time) -
$7.99
b) unlimited (watch on up to 4 devices at a time) -
$11.99
DVD only:
a) 1 DVD at a time -
$7.99
(blu-ray = $9.99)
b) 2 DVDs at a time -
$11.99
(blu-ray = $14.99)
c) 3 DVDs at a time -
$15.99
(blu-ray = $19.99)
d) Limited (2/month) =
$4.99
(blu-ray = $5.99)
"We promise our customers
stellar service
, our suppliers a valuable
partner
, our investors the prospects of sustained
profitable growth
, and our employees the allure of
huge impact
. "

- Reed Hastings, CEO
Company Values
Judgment
Productivity
Creativity
Intelligence
Honesty
Industry
Agenda
• Industry Profile
• History of Netflix
• Company Profile
• Competition
• Past VS. Current Marketing Strategy
• Critical Evaluation
- SWOT
- future plans
• Recommendations
Future Plans
Video Rental and
Internet Video Streaming
Brand Identity
• focused mainly in the United States - not nearly as much business in the global market

• emphasis on DVD mailing program

• family watching movies at home together


Company Profile
Questions?

Martine McCarthy, Nik Venuto, Kelsey Pilchman, Angie Isaza Loaiza
By:
Video Rental Services
Known for the physical borrowing of movies or television shows
Can be done through kiosks, mail, online or physical stores
Redbox has roughly 48.7% of marketshare, Netflix 25%
On the decline due to technology advances

Internet Video Streaming/ Internet Subscription Service on Demand
• Known for its quick and easy access
• It’s key consumer are computer users
• Becoming readily available via mobile Smartphone and tablet apps
• Companies that make it up: Netflix, Hulu, Hulu Plus, Amazon Prime
• Growing exponentially

Exponential Growth

•Males and females between the ages of 17-60

•Household income levels of $30,000 and up

•Foreign and international films draw in
different racial/ethnic groups

•Internet Users

•Insight on customers
•Follows what they watch
• Ratings
•Recommendations to customers
•Divide them into customer segments

1998 - Started by Reed Hastings
• 1999 - Discontinued selling DVD’s
• 2002 - 600,000 member subscription
• 2005 - 4.2 million members
• 2007 - Introduces streaming
• 2008 - Partners with consumer electronics
• 2010 - Netflix available on Internet connected devices
• 2010 - Netflix launches abroad
• 2011 - Qwikster fails
• 2012 - 30 million users globally
• 2012 - Primetime Emmy Engineering award
• Feb 2013 - Launches House Of Cards
• Oct 2013 - Over 40 million members globally

Net Income
• to find out what customers liked about Netflix and what could be improved upon

• 280 responses!

• Most common recommendations:
- Instant Watch section of Netflix


Financials
Revenue
Company Profile, Cont.
• Start of subscription services

• Invests in original content

• Seeks exclusive deals (Disney)

• Captures 32.7% of total online traffic

• Emphasis on customer service


Gender
Age
Instant Watch
• Expand original programming

• "Redefinition and rebroadening of what Netflix is to its customers". - Reed Hastings, CEO

• Shift from distributor to a programmer

• "Reinforce what you would lose if you're not on Netflix". - Reed Hastings, CEO

• Global expansion

• Continue to push away from mail order
- strong emotional benefit

- family activity
Company Profile
Communication
Selflessness
Reliability
Passion
Tries to position itself as an online streaming company that offers rentals
TV Movies


Recommendations
In the long-run move to 100% streaming
For now get as much cash from DVD business but do not put any more resources into the business.
Limit accounting sharing
Don't lose emotional benefit/brand image
Netflix Profile
Full transcript