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Transcript of Netflix Marketing
Esmond Wei 1997 2007 2013 In 1997, Netflix is founded by Reed Hastings and Mark Rendall.
Netflix became the first DVD rental company to charge a flat fee with no late fee and no return date. In 2007, Netflix introduced an online streaming system for movies and TV shows. Netflix charged a monthly flat fee for customers to use this streaming system. In 2013, Netflix faces problems about its future as its competitors are closing the gap and Netflix records a decline in profits during the third quarter of 2012 What does Netflix Do? Netflix is: A provider of television and movie content through its online streaming service as well as its DVD-by-mail service. It offers a separate flat-fee for each service and offers unlimited content for each service. Timeline Of Netflix stuff happened Competitors Who does Netflix Target? Based off demographics... Ages 18-59 Working class, middle class, upper middle class, lower upper class Based off behavior aspects... Subscribers who do not maximize their
usage such as... working parents. Based off geographical aspects... - Places where the internet does not scare people.
- Places that mail is easily deliverable to. What does Netflix want to do?? Wants to revolutionize how people view TV shows and movies How?
1. Gain more subscribers and expand internationally
2. Create convenient and affordable home entertainment Product Place Price Promotion 1. Available on any device that can access the internet.
2. No late fees and no due dates
3. Unlimited streaming
4. Offers Blu-ray and limited HD streaming.
5. Different levels plans for different types of users.
6. Original Programming -Anywhere with an internet connection
as long as it is in the USA, Canada, Latin America, UK, Ireland, Sweden, Denmark, Norway, & Finland
- Can play on 6 "Netflix-ready" platforms simultaneously.
-DVD service available anywhere in North America as long as you have a mailbox.
- Netflix giftcards at Best Buy -Seasonal/Holiday promotions: holiady envelopes, temporary upgrades
-Print ads in Parenting and Entertainment magazine
-30 Day Free Trial
-Focus on appearing family oriented
- Commercials Value Proposition -Easy to use interface
- Widest range of streaming content available
-Affordable flat rate
-Offers unlimited availability of content via streaming service
(and DVD to some extent) Netflix's Value Chain Buyer Willingness-to-Pay Cost Supplier Firm's Value Buyers Gain:
Unlimited streaming services
No late fees or due dates on DVDs
Wide variety of TV shows & movies
Simple to use
Flat fee Suppliers Gain:
Publicity Netflix Gains:
Large subscribers that allow leverage over networks.
Well-known name in the TV & movie rental market
Top-of-mind How is Netflix's Current Marketing Strategy doing? Price Pros:
-Fixed & simple
-Easy to budget in
-Appeals as a steal!!!
-Given costs, price of service is too low.
-Not enough profit to drive a desirable level of company growth.
-Demand for Netflix is relatively price elastic.
-Increase in price leads to bad PR Place Pros: Cons: International content is limited.
Expansion costs are high and pay-off
is uncertain. Product Pros: Offers many more instant titles than competitors and is constantly enhancing content
-Beginning to produce original content (Arrested Development, House of Cards, etc).
Cons: Licensing costs are extremely high
-DVD service is becoming outdated
-Cannot upload recent content Promotion Pros: One month trial lures customers in
-Offers promotions seasonally to increase
-Netflix is a well-known brand. It is in the consideration set for many consumers.
-Hasn't differentiated product/service enough from competitors
-Lacks creative promotion
-No defining brand icon, slogan, or representation other than the color red Netflix's Current Problems 1. Netflix is the current market leader in online video-subscription service. However, it's competitors (specifically Hulu, Amazon, & iTunes) are starting to close the gap.
2. Netflix's licensing fees are costing them alot more money than they want it to be.
3. In October 2012, Netflix reported an 88% fall in third quarter profits. Based off this, do you think Netflix is going to survive? Or is it... But still, Netflix needs to grow to survive and we're going to show you how... Recommendation
Price DO NOT CHANGE CURRENT SERVICE PRICE Recommendation #2
International Expansion Expand: Make streaming service available
-Increase Current Streaming libraries in foreign countries
- Add more country specific content to appeal to international content AUSTRALIA!!!!! Recommendation #3
Create pay-per-view movies and TV shows in "Netflix Instant" -This will offer newer content not otherwise available to stream.
-Simultaneously becomes the place for all viewing needs. This will allow Netflix to go head-to-head with Amazon video, Hulu, & iTunes
- Should be a separate website but users can pay with their original Netflix account.
-Should offer current TV shows on Netflix streaming & DVD and should offer current movies "Netflix Instant" Recommendation
#4 Make video games available
as part of DVD service.
Don't create a separate site for this. Recommendation
#5 General Recommendation on Product Innovation 1. Work w/ TV manufacturers to put built-in Netflix feature on TVs.
2. Spanish and Mandarin subtitles available in content
3. Tighten quality control, delivery time, & availability
4. Upgrade search feature Recommendation #6 Increase Personal and Social Features 1. Allow personalization online
(e.g Facebook connect)
2. Create online groups on Netflix according to directors, sub-genres, writers, & actors
3. Implement a technology that allows Netflix to recommend groups to users
4. Groups update users on new streaming offerings and related events Recommendation #7
Focus on Certain Target
Segments 1. Continue focusing on the family segment
(Busy parents, single parents, young mothers)
2. Increase focus on College students
3. Indirectly target the elderly by targeting their kids (more on that later) Recommendation #8
Advertisements 1. Ads on the envelopes
2. Campaigns targeting people above 59 for the DVD service
3. Continue promoting Netflix and its family friendly service
4. Campaigns towards college students For the above 59 Don't advertise directly to them. Advertise to their kids. Have slogans like "Your elderly parents have nothing to do? Netflix will keep them busy" For the college students Launch ads saying how Netflix is better than actually owning a TV and paying for cable.
Maybe have slogans like:
"Broke? Tired of stealing cable? Broken TV? Get Netflix"
or "Need to find a way to procrastinate? Try Netflix 30 days free. For the family Continue to convince families that a great way for families to spend time is to watch movies together and Netflix is great for families. In Conclusion, For the times, they are a changing and so must Netflix.
As technology progresses, soon every TV will have Netflix installed onto it; older people will no longer be technologically challenged; people will be even more interested in instant gratification; the economy will eventually get better; and the internet will be even more widely available.
Netflix must adapt to the new environment if it wants to continue to dominate its competitors.
2012 was a close call for Netflix; 2013 won't be any easier. Questions?