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The Netherlands

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by

Allyson Korleski

on 19 April 2010

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Transcript of The Netherlands

Allyson Korleski
Ben Huseman
Chris Glover
Aaron Degoey
Kevin Brim
Jeff Star Introducing Netflix into the Netherlands Allyson Korleski
Ben Huseman
Chris Glover
Aaron Degoey
Jeff Starr
Kevin Brim The Netherlands-
Demographics Population
16,499,084
61st most populated country in the world
68% age range of 15-64
Majority are 30-55
35% of Netflix customers in the U.S. are in this age range
Economy 16th largest economy in world
GDP per capita is $52,321
United States only has GDP per capita of $46,442
Purchasing Power Parity (PPP)
World Bank has Netherlands at 7th while U.S. is at 4th
Significant disposable income to spend on an optional service like Netflix
Amsterdam located in Netherlands
5th largest tourist city in the world
4.2 million visitors yearly
U.S. hotels offer movie streaming as a source of revenue
Amsterdam could entice Americans the same way
Political Environment Parliamentary Democracy
Makes the Netherlands an attractive place to invest
6th best country to invest and operate in according to Heritage Foundation
Average days required to open a business is 35
The Netherlands is only 10 days
Open Market System
15th of 157
Business is easy to start up in the Netherlands
Government
Safe and reliable for entrance
Foreign companies are treated nearly the same as local companies
No national or regional barriers that are not specific to local companies as well
Foreign investment is encouraged
More Specific to Netflix
The Netherlands have a quick reaction to technology
First country to establish an e-commerce code of conduct
Developed quickly to attract high-tech investment
Policy on intellectual property law is rated as very good
Netflix would not be able to enter a market with low IP laws
Most studios would be unwilling to have their movies distributed under little protection
Easy access and strict laws would provide Netflix with a safe and quick move to the Netherlands
Stable Economy
High infrastructure
Possible Problems
If legal entity can’t be established in the Netherlands
Netflix could operate under a Dutch Brand
Merge or purchase a Dutch company with similar business
Joint venture with a Dutch party
Culture Factors United States and the Netherlands very similar
High quality of living and education
82% of Dutch use computer at home and/or work
72% use internet
Only 76% of people in U.S. use computer at home and/or work
70% use internet
Most computer literate in the world
6th highest broadband speed in the world
Eight places higher than the United States
6th cheapest broadband
Vital because Netflix would only operate through the internet
Language is Dutch
58% have a decent understanding of English
US already has a presence in the Netherlands box office
9 of last 10 top movies were from the U.S.
Subtitles and dubbing make it possible
Problem
Piracy- 1998, 57% of the Dutch did not view piracy as a crime
Number has significantly dropped but Netflix would not be able to compete against piracy
Industry Outlook Potential Market Population: 16.7 million with avg. growth of .436%
Movie and Entertainment Industry is on a slow decline
Target: to anyone able to run a computer
Establish NETFLIX as a name brand.
There isn’t an actual online streaming service offered in the Netherlands
Establish the NETFLIX name early in hopes of having the advantage of company size, brand familiarity, and hopefully brand loyalty
Ideally, when people think online video streaming, they think NETFLIX
Typical NETFLIX User Profile
Male – Mid 30’s – Income: $60,000+
Demographics First look profile of a NETFLIX user in the U.S.
Male – Mid 30’s – Income: $60,000+
As NETFLIX becomes more mainstream, the typical user is emerging
55% Male, 45% Female, 75% income of $30,000+, 66% Childless, 50% college grads
(Childless couples, Singles)
High disposable income than a typical consumer
Hard to tell if this will hold true in another country
Should market to both low income and high income customers
Low income – Market the aspects of Price, and No Late Fees
High Income – Market the aspects of convenience and choice of selection
Breaking up the target markets allows us to market to each customer specifically and penetrate the market better
Competition Competitors
Blockbuster, Inc., Keeno, MovieMile, and DVDperpost.
Blockbuster largest international competitor but only 60% of market cap
Keeno
Largest competitor to the Netherlands market
Only available to people of the Netherlands
Privately owned couldn’t be properly compared to Netflix
Most of Netflix’s competition in the Netherlands is small private owned companies.
Channels of Distribution Two channels of distribution
Internet and mail
Decided to only use Internet as only Channel
Use bandwidth as competitive advantage
Gray market
Small Chance, limited to people with high technical skills and a pre-existing Netflix account
Spoof an I.P. Address
Remote Desktop
Locked up Channel
Copyrighted content, local Competitors
Entry Strategy Acquisition
Increased responsiveness
Optional future expansion
Copyright licensing
Continue from US headquarters
Less risk
Lower cost
Target Market US User Profile
Higher income
No children
Flexibility
Netherlands Demographics
€45,000
Young adult
No children
Position Affordable Luxury
Inexpensive but trendy
Future of multimedia
Product US
Online Streaming

Large Selection Mail-Out Movies
Larger selection
Blurays and DVD’s
Netherlands
Price US US Plans
$4.99
1 movie at a time
2 movies in a month
$16.99
3 movies at a time
Unlimited movies in a month
Up to 8 movies at a time
$6 per bracket increase
Price Netherlands Keeno / Movie Mile
€1.99
Netflix
€2.99 ($4.00)
Promotion and Distribution channels Promotion
Entertainment
Television
Online Advertising
Distribution
Internet
Computers
Gaming Systems
Internet TV’s
Blu-ray Players
Sales/ Market Share Projections Advertising Budget Projections United States
$.34 per person
$55 Million

Netherlands
$3 Million
Timeline / Market Share Conclusion Small potential market

Expensive
Negative revenues as far as 2020

Simple Commodity

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Questions?
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