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Transcript: Netflix Reed Hastings was born on October 8th, 1960 and is an entrepereneur & education philanthropist. Hastings lives in the San Francisco Bay Area, is married, and has two children He is the CEO of Netflix, and on the boards of Microsoft, Facebook, and numerous non-profit organizations. Hastings was born in Boston, Massachusetts & he graduated from high school in 1978 from the Buckingham Browne & Nichols school in Cambridge, Massachussetts. Hastings entered Marine Corps officer training through their Platoon Leader Class and spent the summer of 1981 in Officer Candidate School at Quantico, Virginia, Hasting's first job was at Adaptive Technology, where he invented a tool for debugging software. He left Adaptive Technology in 1991 to found his first company, Pure Software, which produced products to troubleshoot software. It started its subscription-based digital distribution service in 1999 and by 2009 it was offering a collection of 100,000 titles on DVD and had surpassed 10 million subscribers. In 1998 Hastings and Marc Randolph co-founded Netflix, offering flat rate rental-by-mail to customers in the US. Hastings majored in mathematics at Bowdoin College in Brunswick, Maine, and won its mathematics department's Smyth Prize in 1981, and its Hammond Prize in 1983.Hastings received his bachelor's degree from the college in 1983. In October 2006, Netflix announced that it would award a $1 million prize to whoever could devise a system that was 10 percent more accurate than the company’s current system for recommending movies that customers would like Netflix launched a service in 2007 to stream movies and television to a users' computers In July 2011, Reed Hastings and Netflix announced that subscription prices were increasing, some by as much as 60%, a move which led to reported customer backlash, cancellations, less than projected subscriber growth, and a decline in stock price The End By Jamal Fidow


Transcript: Amazon Prime- $79/year Hulu Plus- Sitcoms $7.99/month Google- Size and software Itunes- Size and accessibility Redbox- Easy, Simple, Fast, Low cost Vudu- Purchase individually 1 History of Netflix Who is their competition Competitive advantage Strengths Why change The reconstructed Netflix Issues with the implementation NETFLIX 6 Agenda 3 Netflix was founded in 1997, in California by Mark Randolph and Reed Hastings. Inspiration for the founding of a company: A Blockbuster late fee. Official website first launched in April 1998. A year later they introduced the monthly subscription concept. Their IPO was in May of 2002, which raised over $82 million. In 2005 there were over 35,000 film titles and they shipped over 1 million DVD’s every day. MGNT 2390 Strategic Change Questions? Competition 12/2/12 5 8 Netflix: Competitive Advantage Porter’s Five Forces model: Threat of New Competition - Barriers to Entry First to enter online market Difficult for firms to enter the market and offer the same value for a cheaper or equal price Largest database of video options Pricing Changes 60% Increase Netflix and Qwikster Separate System Name Change Questionable Timing 7 Company History Implementation Issues 4 Creating strong relationships with large studios for a discounted price Monthly subscription No Contract - Month to Month Darren Pugh Qwikster Focuses on the DVD by mail Netflix Focuses on the online streaming Price restructure Netflix: Strengths 2 Netflix Reconstructed Company had dominant market share in entertainment media specifically the rental market Restructured in 3rd quarter of 2011 Separated DVD-by-mail and online streaming Strong negative reaction from consumers What led to restructuring? Rapid changes in technology Faster Speed Mobile Devices Internet capabilities from TV [E.g. On Demand] Lower costs to consumers Switch to online streaming from competitors Felt that physical media is being phased out Did not want to be left behind


Transcript: What is it? is a provider of on-demand Internet streaming media (movies & TV) provides flat rate DVD-by-mail services (US only) Where is it? Headquarters in Los Gatos, California, US Serving: North America South America United Kingdom & Ireland When is it? Established in 1997 It starts its subscription-based digital distribution service in 1999 February 25, 2007, announces the billionth DVD delivery In April 2011, announces 23.6 million subscribers In 2011, total digital revenue reaches $1.5 billion Netflix launches in the UK and Ireland on January 9, 2012 Defending the July price increase as necessary, Hastings went on to say that the company has vastly expanded its library of available content. In addition to adding movie titles from Paramount, Sony, Universal, Fox, Warner Bros., Lionsgate, MGM and Miramax, Hastings also noted that in “the last couple of weeks alone, we’ve added over 3,500 TV episodes from ABC, NBC, FOX, CBS, USA, E!, Nickelodeon, Disney Channel, ABC Family, Discovery Channel, TLC, SyFy, A&E, History, and PBS.” Read more: "As a rule of thumb, if you can get it on DVD or 4od, it's on Netflix - so for example Breaking Bad seasons 1 and 2 are there, but not Season 3, which hasn't been released in the UK yet. Netflix operates in what it calls the "post-DVD window", which means some studios don't let it stream their films until long after their DVD release. If you compare Netflix with the current UK DVD chart, you'll see what that means: there's no Bridesmaids, no King's Speech, no Drive, Due Date or Inbetweeners Movie. In some cases films don't turn up on Netflix at all, because distributors think Netflix's subscriptions are too cheap. While the choice of programmes and films is very wide, there are noticeable omissions such as Disney, whose most popular films and TV shows - The Lion King, Phineas and Ferb and so on - are absent. " Questions? Chief Product Officer, leading the product team, which designs, builds and optimizes the Netflix experience. Before to Netflix, Neil worked in various engineering and product roles at Pure Software where he first met Reed. Doctorate in Computer Science from the University of Aberdeen Netflix, Inc. trades under the NFLX symbol on the Nasdaq stock exchange. +1 (408) 540-3700 Undergraduate in Mathematics Masters in Computer Science Worked for Adaptive Technology for one year before starting his first business Pure Software 100 Winchester Circle, Los Gatos, CA 95032 In September Netflix announced it would seperate it's DVD rental service under a new name "Quickster". This plan was killed in October after countless complaints What devices do you need? Netflix, Inc. "I think there's a huge category of people who will watch movies on laptops," says Hastings."And remember, it's not the laptop of today. Think of the laptop in five years. People will continue to want to watch movies on TV. No doubt about it. But laptop screens are improving. And young people are living on laptops." Reed Hastings House of Cards Orange is the New Black Arrested Development (upcoming season) Productions Employees Examples of what you will/won't find: Fun Fact: Hasting's was a door to door vacuum cleaner salesman out of highschool "It closed down part of John St. in downtown Toronto and attracted a crowd to the launch event, but neglected to say that many of those in the crowd were actors paid to be there. An information sheet handed out to the paid extras said: “Extras are to look really excited, particularly if asked by media to do any interviews about the prospect of Netflix in Canada.” After word of the ruse spread on Twitter, Netflix apologized and said the extras should not have been talking to reporters. A spokesman for Netflix said the handout for extras was required to obtain a film permit for the launch. The instruction sheet referred to Wednesday’s event as a “corporate documentary.”" Sources David Hyman has served as Netflix General Counsel since 2002. He also serves as the Company’s Secretary. "Horrible costumer service" Distribution Neil Hunt Quickster Controversy -900 at corporate headquarters. -Relatively new office in Toronto (2011) -unrealised number of employees. Competition PS3 XBOX 360 Wii Computer 700+ devices support netflix Youtube iTunes Rogers On-Demand established cable & satellite companies Pirate sites For example, the first three seasons of Mad Men are available, but none of the episodes from the fourth. Glee isn’t available at all. As well, the first five seasons of Trailer Park Boys are available, but the final two seasons are not. Patty McCord, Chief Talent Officer David Hyman, General Counsel Patty and her team maintain the unique corporate

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