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Netflix

International Marketing
by

Ying WANG

on 22 March 2013

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Transcript of Netflix

Contents Company Background Marketing Mix PESTLE Analysis SWOT Analysis Competitor Analysis Porter's Generic Strategies Theory Netflix Company Background Netflix is the World’s leading Internet Television Network with more than 33 million members in 40 different countries with 900 employees at its corporate headquarters. 1997 2007 In 2007 Netflix introduces streaming that allows members to instantly follow television shows and movies on their personal computers. 2005 In 2010 Netflix is available on the Apple iPad, iPhone and iPod touch, the Nintendo Wii, and other Internet connected devices. 2010 •In 2013 Netflix reported to have 33 million members. •Netflix has got “most satisfied web site” for five times. 2013 •In 1997, Reed Hastings and Marc Randolph co-found Netflix to offer online movie rentals. At the end of 2005 Netflix has 4.2 million members, 3.6 million more than 2002. USP Cheap Fast High Quality Streaming Large quantity of movies Latest TV Shows No commitment PS3, Wii, Xbox, PC, MAC, Mobile and more Marketing Mix Product Internet video streaming : TV Shows, Movies

On December 4, 2012, Netflix and The Walt Disney Company announced an exclusive multi-year U.S. subscription television service agreement with Netflix for first run of Walt Disney Studios animated and live-action movies. Place 40 countries: North and South America, the Caribbean, Canada, United Kingdom, Ireland, Sweden, Denmark, Norway, Finland …

Online: PC, Handheld devices( TabletMobile, Xbox, WII, PS3)

Offline: TV, Set-Top Box, Blu-ray Disc players, Video game consoles Product DVD and Blu-ray Discs rental (DVDs-by-mail service) Price streaming-only subscription for $7.99 per month
mix streaming and mailed DVDs under plans starting at $9.99 per month Promotion Social networks Facebook Twitter, APP

Prize
Netflix Prize ($1 million)
Netflix Cloud Prize($100,000)

Cooperate (Warner Brothers , Disney)

Share account Advertizing #1 Advertizing #2 PESTLE Analysis P E S T L E POLITICAL Political stability (Elections)
Government policies
Taxation levels
Trade Barriers (barriers to entry)
Market Regulation
Lobbies that influence
Bureaucracy ECONOMIC Unemployment rate, inflation rate
Purchasing Power Parity (PPP)
Currency strength and exchange rates
Amount of tax
Market competition
Disposable income per capita (distribution of wealth between the population) Cost of labor SOCIAL-CULTURAL Population structure (demographics)
Lifestyle and taboos
Education level Consumer attitude and buying behavior
Freedom and influence of the media
Advertising TECHNOLOGICAL Access to technological means (internet, fiber optics)
Faster internet connections up to 100mb/s
Existing technologies in the country
Evolving technologies
Government spending in the industry
Cost of energy
Increased use of Smartphones and Tablets (higher streaming speed, larger screens) LEGAL Existing laws on: employment law, advertising law, competition law, consumer and IP laws too.
Intellectual Property Rights (preventing theft of copyright)
Change in demand and supply
Tax levels in the country
Future legislation (EU Community) ENVIRONEMNTAL Sustainability

Awareness

Implications (carbon footprint) SWOT Analysis Strength's Netflix has the clearest brand identity ("Watch TV shows & movies anytime, anywhere") and greatest brand awareness among its competitors in its current operating states.

Netflix is extremely personalized due to their advanced algorithms which analyzes what you watch and suggested likes films/shows.

high value at $7.99 per month for the largest streaming library in the world.

Exclusive Content:  Of Netflix's top ten TV shows, six are only on Netflix.

Netflix's DVD subscription service is extremely profitable, margins around 50%.

Unlike competitors, Netflix's allows members to go all the way back to the pilot of the first season for TV shows. Weakness Netflix is not as widely known in Switzerland
Switzerland has not banned pirated web sites like “Channel 1” which offers some similar content for free.
Netflix's streaming subscription contribution margins are much lower than the contribution margins of its declining DVD subscriptions segment
Marketing the service is time, money and effort consuming Opportunities International expansion: Netflix's international subscriptions are growing fast--up nearly 200% in current international countries.

Netflix is currently in full production of four original TV series to debut exclusively on Netflix in 2013.

The larger use of credit cards in countries makes buying Netflix easier.

Internet TV clearly seems to be the future of television, and Netflix is leading the change. Threats "With big markets comes competition" - There is a clear transition from linear TV to Internet TV and competitors want in on the profits.

Contracts with Disney, Sony, and Universal all come up for renewal within the next five years--losing any of these big contracts could have a negative affect on Netflix's value proposition.

Hulu, Amazon, and HBO are all investing in their own original productions.
Government regulations, legislation, and barriers to entry Advertising #3 Watch TV shows & Movies
Any time, Anywhere
for One low monthly price No. 1: Amazon.com Amazon.com has taken several steps to set itself up as a direct competitor of Netflix. Pros

In addition to instant video streaming, an Amazon Prime account comes with other services such as free two-day shipping on millions of items and a free Kindle book to borrow each month.

The website allows anyone, regardless of whether or not they have an Amazon Prime membership or a cable subscription, to stream a TV show or video for a fee.

Amazon records every purchase made by an account holder; thus, if someone loses an e-book or digital album, they can prove they've bought it and download it again, free of cost.

The company's September deal with Epix will go a long way toward helping Amazon bulk up its catalog of titles, which is currently much smaller than Netflix's.

Like any relatively new initiative (or any initiative, for that matter), there are also drawbacks to Amazon Prime. Cons
Even with the new Epix deal, the service offers a significantly fewer number of titles than its predecessor.
Amazon does not provide a DVD mail-order service such as the one that made Netflix famous.
For those without an Amazon Prime account, renting a movie costs at least $2.99—only $5 less than a monthly Netflix subscription. No. 2: HBO Go HBO Go is a smaller service than both Netflix and Amazon.com, but it is challenging Netflix in new territory—literally Pros
The service has announced plans to expand its service to Sweden, Finland, Denmark and Norway as a new service: HBO Nordic. Although the company has delayed its launch in the area, it will still be one of the first Netflix competitors to take on the giant in the international market.

HBO Go's Nordic service is available as an over-the-top (OTT) video-on-demand (VOD) service, meaning subscribers can purchase HBO's online content without a cable subscription.

The service streams in HD, so consumers are less likely to encounter grainy video quality or interruptions due to slow buffering. Cons
HBO had originally planned to launch its Nordic service before Netflix, which began streaming in Scandinavia on Oct. 15. On Oct. 26, however, HBO announced it would "slightly" delay its launch date without giving further details. This could turn potential customers off, especially since Netflix is already available in the area.
For those who want to enjoy HBO Go on its newest platform, the Xbox 360, there is an extra requirement: an Xbox 360 Live Gold subscription. While this may only affect a small subset of subscribers, those few may rate the service negatively—and pass the word on. No. 3: Vudu This online video streaming newcomer recently inked a deal with Walmart that allows subscribers to stream instantly on Walmart.com Pros
A Vudu subscription is free, and subscribers pay only for the content they watch— unlike with Amazon Prime and Netflix, there is no monthly fee.
Like HBO Go, Vudu streams many of its movies in its proprietary HDX. The service also employs Dolby Digital Plus 7.1 surround sound for many of its titles.
In a direct comparison to Netflix, Vudu boasts that it offers many titles the same day they're out on DVD, whereas Netflix only releases them 28 days later.
Walmart allows Vudu users to bring their DVDs to a store and transfer them to the cloud. This allows consumers to watch their content on a variety of devices from any location. Cons
Since the Vudu/Walmart deal is relatively new, the two companies will likely confront some glitches or difficulties getting subscribers.
Though there are no subscription fees, not all Vudu movies are cheap. New titles such as The Amazing Spiderman cost $5.99 to rent in HDX. This price almost negates the advantage of a no subscription fee.
Subscribers can only watch movies in HD on TV sets; for desktop and iOS, the only option is standard definition video (SD). For those who want to use Vudu to stream on-the-go, this is a significant disadvantage. Others Competitors YouTube Movies Alongside a billion user videos and now many TV channels, YouTube rents films. Expect to pay £3.49 for new releases and £2.49 for older movies. Very nicely, it often contains DVD-style extras for films that you can watch whether or not you rent the film. iTunes Store The iTunes Store also includes films, which can typically be rented from 99p to £3.49 or bought at various prices from under £5. Some films, such as Avatar (£13.99 to buy), come with iTunes Extras, similar to the old DVD extras. LoveFilm You can still get DVDs from LoveFilm but now you've also got on-demand streaming. At the low end, you get up to two hours of streaming (as well as up to three discs in the post) for £5.99. But unlimited streaming of films and TV costs £9.99 per month. Works with internet TVs and PS3. Slogan Watch TV shows & movies
any time, anywhere
for one low monthly price. Porter’s Generic Strategies Pricing Strategy: Penetration Poster's generic strategies:
Cost leadership
Differentiation Recommendations and Conclusion Implementation of Netflix in the hospitality industry: TV, Mobile devices
Advertising on the internet: streaming websites
Advertising in universities and schools
30 days trial
Special discounts Do you have any questions? We are here to answer them.

Thank You for your Attention Warner Bros ,The MGM Channel , Hollywood Storm ,Hollywood Festival , DreamWorks, Open Road Films, The Weinstein Company, Kino International, CBS Television Distribution, Universal Studios and Twentieth Century Fox. Recommendations for The Future
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