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Intrapreneurial Business
Proposal
2020
NETFLIX, INC
HOLLY FAUST
TABLE OF CONTENTS
EXTERNAL & INTERNAL BUSINESS ENVIRONMENT............................................................................ 3
INTRODUCTION..................................................................................................................................................................3
COMPANY INFO.................................................................................................................................................................3
INDUSTRY ANALYSIS............................................................................................................................................................3
PRODUCTS/SERVICES..........................................................................................................................................................4
Basic Plan..................................................................................................................................................................4
Standard Plan...........................................................................................................................................................4
Premium Plan...........................................................................................................................................................4
STRATEGIC SCANNING ............................................................................................................... 5
CUSTOMER ANALYSIS..........................................................................................................................................................5
Cable vs Cord Cutter................................................................................................................................................6
COMPETITION....................................................................................................................................................................6
US Subscription Over-the-Top (OTT)Video Service Viewers, by Provider, 2018 .............................................7
PRICECOMPARISON...........................................................................................................................................................7
Price Comparison Chart ..........................................................................................................................................7
WHAT SETS NETFLIX APART.................................................................................................................................................8
MANAGEMENT ..................................................................................................................................................................9
Reed Hastings ..........................................................................................................................................................9
Jessica Neal ..............................................................................................................................................................9
Rachel Whetsone...................................................................................................................................................10
David Hyman..........................................................................................................................................................10
Greg Peters .............................................................................................................................................................11
Spencer Neumann .................................................................................................................................................11
Ted Sarandos..........................................................................................................................................................12
Jackie Lee-Joe.........................................................................................................................................................12
SOLVING A NEED IN THE MARKET............................................................................................... 13
MISSION STATEMENT.......................................................................................................................................................13
VISION STATEMENT..........................................................................................................................................................13
COMPANY VALUES...........................................................................................................................................................13
CORPORATECULTURE & TRANSPARENCY...........................................................................................................................14
Netflix Inc.’s Organizational Culture...................................................................................................................14
MEDIA TRENDS................................................................................................................................................................15
PUBLIC PERCEPTION.........................................................................................................................................................16
CUSTOMER OPINION........................................................................................................................................................17
Netflix......................................................................................................................................................................17
Hulu .........................................................................................................................................................................18
Amazon Prime ........................................................................................................................................................18
BUSINESS OPPORTUNITY...................................................................................................................................................18
IMPLEMENTING INNOVATION ................................................................................................... 19
BUSINESS OPPORTUNITY RECOMMENDATION....................................................................................................................19
United States DVD Sales Chart for Week Ending November 24, 2019..........................................................21
United States Blu-Ray Sales Chart for Week Ending November 24, 2019 ....................................................21
Implementation Action Plan................................................................................................................................23
IMPLEMENTATION PLAN..................................................................................................................................................24
CONCLUSION...................................................................................................................................................................24
REFERENCES....................................................................................................................................................................25
Netflix, Inc.
Introduction
Netflix is a household name in streaming online digital content. As the creator of the first
online video streaming service, we have been a leader in the industry for over 20 years. We have
over 12 hundred original shows and movies streaming around the world in a wide variety of
genres and languages. With over 167 million paid members in over 190 countries Netflix
continues to be the world’s leading streaming entertainment service. (Netflix, 2020)
External & Internal Business Environment
Company Info
Netflix is a corporation publicly traded on NasdaqGS. Our co-founders Wilmot Reed
Hastings Jr. and Marc Randolph started the company in 1997. Hastings is the current Chairman,
President and CEO. Randolph retired from the company in 2003. We are an internet streaming
service in the communications sector and entertainment industry. As a business to consumer
corporation we look for any opportunities to improve consumer opinion. What better way to do
that than to expand our services?
Industry Analysis
As part of the entertainment industry, the sub industry of streaming is the new norm. Our
position within the streaming industry is mature, as the original internet streaming service for
movies and series. We offer streaming content both domestically and internationally to 190
countries. With emerging technology and internet capabilities there are a lot of streaming apps,
the newest being Disney+. Most streaming apps these days off just their own programming such
as CBS all access. Any network can create a streaming app for their programming, but they need
a licensing agreement to show programming created by another organization. Examples of this
are our company, and Hulu. The internet streaming industry is currently booming. It is in its
golden age. We introduced the service and it is still expanding and is now subdividing, as we
have seen with networks, like CBS and ABC, and companies like Disney who are now offering
their own streaming services.
Products/Services
We offer “TV series, documentaries, and feature films across various genres and
languages.
The company provides members the ability to receive streaming content through a host of
Internet-connected screens, including TVs, digital video players, television set-top boxes, and
mobile devices. It also provides DVDs-by-mail membership services.” (Yahoo! Finance, 2020)
The following section is directly from our website on our streaming plans.
 Our Basic Plan lets you stream TV shows and movies from Netflix on one device at a time in standard definition
(SD). This plan also lets you download titles to one phone or tablet. $8.99
 Our Standard Plan lets you stream TV shows and movies from Netflix on two devices at the same time and in high
definition (HD) when available. This plan also lets you download titles to two phones or tablets.$12.99
 Our Premium Plan lets you stream TV shows and movies from Netflix on four devices at the same time and in high
definition (HD) and ultra high definition (UHD) when available. This plan also lets you download titles to four
phones or tablets.$15.99
*All plans offer unlimited TV shows and movies, on as many devices as you want. High Definition (HD)
and Ultra High Definition (Ultra HD) availability subject to your Internet service and device capabilities.
Not all content available in HD or Ultra HD.
(Netflix, 2020)
The company has approximately 167 million paid members in 190 countries and the
pricing is comparable to our competitors. Our competitors have only some of the products and
services we offer. One thing that our competitors, like Disney, have that we don’t is the extra
ability to profit off the sales of their original content. We have an opportunity to roll out a new
plan for purchasing our Netflix Original content outside of the streaming platform. This would
allow consumers that don’t have internet the ability to own our content on DVD’s. It would also
grant our consumers the ability to purchase a digital copy that they can download directly from
the site.
Strategic Scanning
Customer Analysis
“As of Q3 of 2018, 57% of Netflix subscribers are international. This makes 43% US
subscribers. 24% of Netflix subscribers are between the ages of 18-24, 25% are 25-34, 19% are
35-44, 17% are 45-54 and 14% are 55+.” (Netflix user demographics, 2019) Nearly two-thirds
(59%) of users are heavy users, streaming multiple times a week, and more than half (57%) are
women. (Netflix user demographics, 2019) “Based on a survey of 500 US consumers that use a
streaming service (conducted Oct. 17-26, 2018) 84% use Netflix, 46% use Amazon Prime, and
28% use Hulu.” (Netflix user demographics, 2019) The majority of streaming is done on
Android smart phones and research has shown that more binge watching occurs in colder
climates. (Netflix user demographics, 2019; Netflix user demographics, 2019)
According to Mansoor Iqbal, “it’s clear that streaming is becoming the predominant
method through which people access film and television content.” (2020) Iqbal also quotes a
CNBC survey that “shows that for every two people that rely solely on streaming, three rely
solely on television.” (2020) The percentage of people who chose both eclipsed both other
options.
CNBC Cable vs Cord Cutters
“[Netflix] Users are categorised not by who they are on paper, but by what they like. The
subscriber base is split into 1,300 clusters, three-five of which are assigned to each user,
weighted based on viewing preferences.” (Iqbal, 2020)
Netflix is available on a multitude of devices: Streaming media players, smart tv’s, game
consoles, set-top boxes, blu-ray players, smartphones, tablets, pc’s and laptops. Even with all of
these options televisions are still the most popular way to stream at 70%. (Iqbal, 2020)
Competition
According to Iqbal via eMarketer.com, the four biggest video streaming services in the
U.S., as of July 2018, are YouTube, Netflix, Amazon Prime, and Hulu, with YouTube being the
only one that doesn’t require a paid membership. (2020) “Among all users [not including
YouTubers], 84% use Netflix, 46% use Amazon Prime, and 28% use Hulu.” (Ewing, 2019) As
of January 2020, Disney + has now joined the running as one of Netflix’s newest competitors.
Although, Disney + is not as high of a competitor as Hulu an Amazon Prime, it is certainly a
contender since pulling all of its content from Netflix and causing a large number of Marvel
content to be canceled. Disney’s entrance onto the streaming scene has and will be a huge impact
to Netflix in the coming year.
US Over-the-top (OTT) Video Service Viewers, by Provider, 2018
Price Comparison
Hulu Price Amazon Prime Price
Basic 5.99 Amazon Prime Annual 119.00
Basic no ads 11.99 Amazon Prime Student Annual 59.00
With Live TV 54.99 Amazon Prime Monthly 12.99
With Live TV no ads 60.99 Amazon Prime Student Monthly 6.49
Add on: HBO 14.99 Discounted for EBT and Medicaid
Holders
5.99
Add on: Cinemax 9.99
Add on: Showtime 10.99
Add on: Starz 8.99
Netflix Price Disney + Price
Basic: 1 Screen 8.99 Basic 6.99
Standard: 2 Screens 12.99 Basic Annual 69.99
Premium Ultra HD: 4 Screens 15.99 Bundle Monthly
Includes Disney +, Hulu, and/or
ESPN+
12.99
The pricing of all 4 Streaming services are very comparable within a few dollars of each
other. Hulu starts with the least expensive option but allows for many add-ons that add up
quickly. If a consumer had the live tv with no ads and all of the add-ons it would total $105.95
per month. Hulu is the only service to offer live tv among these four. Amazon Prime ties their
streaming service in with their Amazon purchasing account as well which allows for even more
benefits. Amazon is the only service to provide a discount for students and those on Medicaid or
EBT (Foodstamps). Disney + offers the chance to bundle with your already existing Hulu
account (which they also own) as well as ESPN+. Netflix offers all of our plans based on the
number of screens the consumer may want to view at the same time.
What Sets Netflix Apart
As the first company to allow consumers to stream video content online, we are the
industry leaders. Netflix is streamed more than any other streaming service in the U.S. and the
world. With 84% of streamers having a Netflix account the question isn’t how to become the
number 1 company but how to stay the company to beat. With Disney + entering the scene and
removing its content from our line-up, we must step-up our game and look for new ways to
corner the market. One way we can do this would be to offer the ability for our Netflix Originals
to be purchased either through a DVD/Blu-ray option, or a direct download.
Management
The following is directly from our website: https://media.netflix.com/en/management-
team
ReedHastings FOUNDER AND CEO
Reed Hastings co-founded Netflix in 1997. In 1991, Reed founded Pure Software, which
made tools for software developers. After a 1995 IPO, and several acquisitions, Pure was
acquired by Rational Software in 1997. Reed is an active educational philanthropist and served
on the California State Board of Education from 2000 to 2004. He is currently on the board of
several educational organizations including KIPP and Pahara. Reed is also a board member of
The City Fund. Reed received a BA from Bowdoin College in 1983, and an MSCS in Artificial
Intelligence from Stanford University in 1988. Between Bowdoin and Stanford, Reed served in
the Peace Corps as a high school math teacher in Swaziland. Reed is married with two children.
Jessica Neal CHIEF TALENT OFFICER
Jessica Neal is a Netflix veteran, starting at the company in 2006 when DVD was king
and streaming just a dream, and has been heavily involved in improving the Netflix culture as the
company grew. In 2013 she left to become head of human resources at Coursera, which provides
online access to the world’s best university courses, and, later, Chief People Officer at Scopely, a
leading player in the mobile gaming industry. She returned to Netflix in June of 2017 overseeing
HR for the 2000-person product engineering team responsible for continuously improving the
Netflix consumer experience. Neal also serves on the board of directors of the Association for
Talent Development.
Rachel Whetstone CHIEF COMMUNICATIONS OFFICER
Rachel Whestone was named CCO of Netflix in August2018. She has spent the last 13
years working on communications and policy issues for US technology companies. She joined
Google in 2005 and served as Senior Vice President of Communications & Public Policy from
2011 to 2015. She held the same position at Uber from 2015 till 2017, before joining Facebook
as a Vice President of Communications. Rachel is a graduate of Bristol University and spent the
first half of her career working as a policy advisor for the UK Conservative Party.
David Hyman GENERAL COUNSEL
David Hyman is General Counsel for Netflix, responsible for all legal and public policy
matters for the company. He has served in this capacity since 2002 and also serves as the
company’s Secretary. Prior to Netflix, David was the General Counsel of Webvan, an online
Internet retailer, having previously held the role of senior corporate counsel. He also practiced
law at Morrison & Foerster in San Francisco and Arent Fox in Washington, DC. David earned
his JD and Bachelor’s degrees from the University of Virginia.
Greg Peters CHIEF PRODUCT OFFICER
Greg Peters assumed the role of Chief Product Officer in July 2017 and leads the product team,
which designs, builds and optimizes the Netflix experience. Previously, Greg was International
Development Officer for Netflix, responsible for the global partnerships with consumer
electronics companies, Internet service providers and multi-channel video programming
distributors that enable Netflix to deliver movies and TV shows across a full range of devices
and platforms.
Prior to joining Netflix in 2008, Greg was senior vice president of consumer electronics
products for Macrovision Solutions Corp. (later renamed to Rovi Corporation) and previously
held positions at digital entertainment software provider, Mediabolic Inc., Red Hat Network, the
provider of Linux and Open Source technology, and online vendor Wine.com. Greg holds a
degree in physics and astronomy from Yale University. Greg joined the board of 2U, Inc., a
global leader in education technology, in March of 2018.
Spencer Neumann CHIEF FINANCIAL OFFICER
Spencer Neumann was named CFO of Netflix in January of 2019. Previously, he served
as Activision Blizzard’s CFO from May 2017. Prior to that, Mr. Neumann held a number of
positions of increasing responsibility at The Walt Disney Company, most recently serving as the
CFO and executive vice president of Global Guest Experience of Walt Disney Parks and Resorts,
from 2012 until May 2017. From 2005 to 2012, Mr. Neumann worked at the private equity firms
of Providence Equity Partners and Summit Partners. Prior to that, Mr. Neumann held several
other roles with Disney, which he initially joined in 1992, including executive vice president of
the ABC Television Network from 2001 to 2004 and CFO of the Walt Disney Internet Group
from 1999 to 2001. He is also a member of the national board of directors of Make-A-Wish
America. Mr. Neumann holds a B.A. degree in economics from Harvard University and an
M.B.A. degree from Harvard University.
Ted Sarandos CHIEF CONTENT OFFICER
Ted Sarandos is Chief Content Officer at Netflix, overseeing the teams responsible for the
acquisition and creation of all Netflix content including original series from around the world
such as Stranger Things, Dark (Germany) La Casa De Papel (Spain), and Sacred Games (India)
and original films including such blockbusters as To All the Boys I've Loved Before,
Bright, and Bird Box and the 3-time Academy Award winning film ROMA. Ted has been
responsible for all content operation since 2000, and led the company's transition into original
content production that began in 2013 with the launch of the series House of Cards, Arrested
Development and Orange is the New Black, among numerous others. Today, Netflix is available
in 190 countries and Netflix originals have received numerous awards around the world
including 93 Primetime Emmy wins, 6 Oscars, and 5 BAFTA Film Awards including Best
Picture.
Jackie Lee-Joe CHIEF MARKETING OFFICER
A graduate of the University of Sydney and the University of New South Wales, Jackie joined
Netflix in September 2019. Prior to joining Netflix, Jackie served as CMO of BBC Studios, part
of the British Broadcasting Corporation. Before November 2015, she was Skype's Global
Director for Audience, Entertainment Marketing & Broadcast Media. Jackie has over 20 years of
marketing experience with leading media, technology and telecoms companies including Virgin
Mobile, Carphone Warehouse and Orange.
Solving A Need In The Market
MissionStatement
“Our core strategy is to grow our streaming subscription business domestically and
globally. We are continuously improving the customer experience with a focus on expanding our
streaming content, enhancing our user interface and extending our streaming service to even
more internet-connected devices, while staying within the parameters of our consolidated net
income and operating segment contribution profit targets.” (Comparably, n.d.)
Vision Statement
Becoming the best global entertainment distribution service. Licensing entertainment
content around the world, creating markets that are accessible to film makers and helping content
creators around the world to find a global audience. (Comparably, n.d.)
Company Values
Source: (Comparably, n.d.)
t
Corporate Culture & Transparency
Our corporate culture is one of employee transparency. Executives and management are
expected to notify employees when a fellow employee is let go and why they were fired. This
allows for growth potential for the other employees. Hastings has also implemented
““sunshining”, a practice where people explain their decisions in public.” We also have a policy
in place that allows for the visibility of all employee’s salaries once an executive is above the
director. (Castillo, 2018)
Most people see our culture as unusual, but it’s based on prioritizing people. Prioritizing
People is one of our core philosophies and leads to an organizational culture that contributes to
our employee morale, effectiveness, and overall human resource development. (Anderson, 2019)
Source: (Anderson, 2019)
We, here at Netflix are completely on board with transparency with those outside of the
company. Everything we do in our corporate practice is available for the world to see. We use a
more effective way of running board meetings as well. Instead of large Power Point
presentations with only the knowledge the CEO feels the board members need, we do 20-40 page
memos, days before the meeting and expect our board members to take an active part in the
company and how it’s different departments work. Having this extensive knowledge of how the
company works allowed for the quick and seamless transition from DVD to streaming and when
we began to stream and license our own original content. (Atkins, 2019)
Media trends
Subscription video on demand (SVOD) is currently booming with everyone seeming to
jump on the bandwagon. Newest to the platform are those such as Disney+, Apple TV+, HBO
Max, and NBC Peacock. (McCarthy, 2019) With so many companies offering their original
content on their platform only it will start leaving consumers choosing which SVOD is best.
“44% of connected consumers who pay for an online streaming service have at least two
subscriptions, 18% pay for at least three, and 7% pay for four or more. This suggests that the
market could prove difficult for new subscription-based streaming services, as consumer
attention, and wallets, only stretch so far.” (McCarthy, 2019) McCarthy wrote about Sushmita
Jain from Kantar, who asked “this increased competition may seem healthy, but will we see
subscription fatigue leading to industry consolidation?” (2019) “According to Kantar, the
services with the highest quality original content and understanding of their audiences will come
out on top.” (McCarthy, 2019)
Public Perception
According to Daniel Friedman, an associate at the Reputation Institute, Netflix is rated
the #1 Corporate Reputation in the United States. (n.d.) We have made some dynamic decisions
that the public is more than just noticing. When the #MeToo movement brought to light the
morally questionable actions of Kevin Spacey, we had a decision to make. We could stick with
Mr. Spacey and finish the final season of House of Cards or we could follow our own moral
compass and take a stand for what was right. We followed our hearts not our bottom line and let
Mr. Spacey go and stopped all production on the set and the public noticed. We showed the
world that money was not more important than people’s lives. (Friedman, n.d.)
Following our own policy of transparency, we also let go of former CCO Johnathan
Friedland when we found out he had used inappropriate language in private meetings. Morally
questionable behavior cannot and will not be acceptable here at Netflix. As pointed out by
Friedman, “confronting issues decisively and openly engenders a level of trust with the public
that can’t be beat.” (n.d.)
“Fortunately for Netflix, its rise to the top of the reputational ladder reflects its
unique emotional connection with the public. Try as competitors might, Netflix has credit in
the public’s emotional bank to weather nearly any competitive storm and to differentiate itself
from rivals.
By continuing to push new boundaries and go where no mere entertainment company has
gone before, Netflix is well-positioned to continue its reign atop the reputational rankings and to
thrive based on its strong values and innovative product portfolio.” (Friedman, n.d.)
Customer Opinion
Netflix
The majority of complaints on the Better Business Bureau are about being double billed
due to having multiple accounts or having accounts that were upgrading without the customer
being aware. It seems that most of the complaints were from people that were unaware of the
process of how to fix this issue. Every one of the complaints I read through included someone
being hacked. We always send a welcome email to the associated email account when an account
is created. We, also, send email confirmations anytime a change is made to an account. In
addition to these notifications, if a customer calls in about a breach or hacking of their account,
we will immediately help fix the issue, whether it is an email change, password reset, or change
in the credit card being used. We also reply to the majority of the complaints through the BBB as
a curtesy to provide better customer service even for the customers that have left our service.
The majority of positive reviews revolve around the content available for streaming.
Unfortunately, there doesn’t seem to be much more in the way of positive feedback beyond the
content itself. Customers tend relay their opinions about the content directly on the Facebook
post associate with the program they seem to be interested in. This does help narrow down the
opinions on the programming itself.
On Blu-ray.com, there is a long thread about Netflix not releasing any of the Netflix
Originals in physical form. There are very few exceptions such as House of Cards and Stranger
Things. It is unclear as to why the majority of original content continues to stay streamable only,
but it doesn’t seem to be a move being considered anytime in the near future. According to
Adam Chitwood, “Netflix now threatens to deny cinephiles and collectors the chance to own a
physical copy of their favorite filmmakers’ latest feature. If Netflix wants to be the home for true
film fans, the way it positioned itself as the destination for TV obsessives (though less-so as of
late as Netflix has opted to let licenses for library titles expire in favor of pushing their own
original TV content), it should do it right.” (2018)
Hulu
Hulu customers main complaint according to the Better Business Bureau is that their no
ads package is not actually no ads, but no ads on certain programming. There is also a large
amount of complaints about their customer service number not. Being available and being very
difficult to track down. Also, there are only 5 responses to the 61 complaints listed at the BBB
website and the last response was done on 4/24/2017.
Amazon Prime
According to Consumer Affairs, the majority of reviews for Amazon Prime are positive.
Most of the consumers are happy with the price and content being provided. As with all of the
above services there are complaints about refund issues on overcharged services, and bad
customer service reps. Although, for the most part the reviews are positive there does seem to be
a lot of complaints about streaming speeds and the need to pay extra for certain movies and
shows beyond the monthly service fee. Most of the reviews included statements about using
Amazon Prime in conjunction with Netflix and Hulu and pulling away from traditional television
services.
Business Opportunity
“Reputation Institute’s data shows that Netflix’s score for Products and Services outpaces
an average of US industry competitors by 10.4 points and Netflix’s revenue increased to an all-
time high of $4.19 billion USD.
By unveiling innovative and successful products, Netflix was able to disrupt the
entertainment industry and position itself as the inclusive, progressive, and beloved content-
creator of the future.” (Friedman, n.d.)
As a producer of “innovative and successful products” we should not be afraid of the
tried and true of our competitors as well. With Disney + entering the field of streaming service
providers we need to position company with yet something else no one else has. Other providers
such as Amazon Prime also has original content that is only available through their monthly
service, but we could get ahead of the game and start releasing our own original content before
our competition, yet again being a leader in the industry.
As Adam Chitwood stated, “If they’re worried about hindering the entire idea of a
“Netflix original movie” as a subscriber-exclusive, put a one-year window on it. Hold the Blu-
ray for 12 months, then release it. I’ll wait.” (2018) Our consumers are willing to wait for the
chance to own the original content. That still leaves consumers only 2 options to watch the
content; either watch it through the membership or pay to own a physical copy. It still wouldn’t
be available through our competitors.
Implementing Innovation
Business Opportunity Recommendation
We should start releasing our Netflix original content on DVD/Blu-ray through our DVD
rental plan. The content would still only be available through us without the mark-up of having
to pay others to sell our content and keeps it exclusive to Netflix. We can also sell the content as
a digital copy, again only available through the Netflix site.
With the DVD subscription we could not just rent copies of our content but sell them as
well. Currently, our monthly plan for DVD rentals is $7.99/month and there are 2.4 million
subscribers. (Gupta, 2019) According to Gupta, “Netflix’s DVD business generated $76.2
million in revenues in the second quarter. The company’s DVD business contributed more to the
bottom line. In the second quarter, the DVD business produced a profit of $46.9 million, which
represented 6.5% of the total profit.” (2019) By adding our original content to the library of
DVD/Blu-rays we open up to a large audience of consumers. Now, they will have the
opportunity to watch shows that were only available to those using the streaming products.
According to the Pew Research Center, 10% of Americans don’t use the internet.
(Anderson et al., 2019) With a population of 329,234,490 people that is a potential 32.9 million
consumers for Netflix original content on DVD/Blu-ray just in the United States. With 2.4
million subscribers to the DVD plan that is only 7.3% of those not using the internet.
The below chart from The Numbers, shows the United States DVD Sales Chart for Week
Ending November 24, 2019. According to the chart, even movies like Beauty and the Beast,
released nearly 30 years ago made $163,443 in one week. Whereas, Fast & Furious Presents:
Hobbs & Shaw made $1,613,588 that same week. These numbers don’t even include the Blu-ray
numbers which added another $1,652,359 to the Hobbs & Shaw numbers. Combined that is
$3,265,947 in one week with just DVD/Blu-ray sales.
United States DVD Sales Chart for Week Ending November 24, 2019
Source of Image: https://www.the-numbers.com/weekly-dvd-sales-chart
United States Blu-ray Sales Chart for Week Ending November 24, 2019
Source of Image: https://www.the-numbers.com/home-market/bluray-sales-chart/2019/11/24
On one Quora discussion, Prasanna Bhalerao, M.Sc. Physics & Electronics, Fergusson
College, Pune, shared the manufacturing cost of a Blue-ray at $2-4 for manufacturing, $1-2 for
licensing of copyright protection software, and $1 in logistics and shipping, totaling around $4-
$7 per Blu-ray. (Bhalerao, 2019) In consideration that Netflix already has our own shipping set
up for the existing DVD/Blu-rays being mailed out that part of the equation would be eliminated
bringing the cost down to $3-$6 a disc. While using the original content to bring in more
subscribers will increase the revenue of the DVD subscription plan itself, the chance to sell the
titles at around $15-$20 per disc for individual titles and considerably more for the series is
where the biggest part of the profit lies.
There are 1227 pieces of Netflix originals to date. 371 of those shows and movies were
released just in 2019. (Elliott, 2019) “According to Netflix, its most popular original movies
between October 2018 and September 2019 were Bird Box (80 million views), Murder
Mystery (73 million), Triple Frontier (52 million), The Perfect Date (48 million), and Tall
Girl (41 million). Other movies with more than 20 million views included Fyre, Otherhood,
Always Be My Maybe, Secret Obsession, and The Highwaymen. A view means that 70% of the
movie was watched within four weeks of its release.
The top TV shows during that same period were Stranger Things (64 million views), The
Umbrella Academy (45 million), La Casa de Papel (44 million), You (40 million), and Sex
Education (40 million). For television shows, streaming at least 70% of one episode within four
weeks of its release counts as a view.” (Elliot, 2019) If we take Bird Box for example, with 80
million views and only ¼ of those viewers bought the movie that would accumulate to $300-
$400 million for just one of the Netflix original movies. Let’s look at Orange is the New Black.
With 105 million viewers. There are 7 seasons with 13 episodes each. At $50 per season for ¼ of
the viewers that totals $1,312,500,000 for just one season and $9,187,500,000 for the whole
series to date. This increase in revenue would be instrumental in continuing to expand the
production of more original content.
Implementation Action Plan
STEPS TIMELINE RESOURCES SUCCESS INDICATORS
Set up meetings with
Spencer Neumann and
the Finance Division to
precure funds for the
DVD/Blu-Ray Project
Prior to the end
of 1st
Quarter
2020
(March 2020)
Access to the finance
team
Funding is created for the
project
Purchase the copyright
protection software.
2nd
Quarter
2020 (April
2020)
Macrovision Software is received
Set up meeting with
Greg Peters,the Chief
Product Officer to
begin creating the
platform around the
DVD/Blu-Ray launch
2nd
Quarter
2020 (April
2020)
Access to Greg Peters
and his team
Meeting occurs and
parameters are set up for the
platform creation goals
Work with the Content
Creation Team
2nd
Quarter
2020 (May
2020)
List of employees
involved in the content
creation of the individual
originals and what they
need to create for a
DVD/Blu-Ray release
Meetings set up with Ted
Sarandos to confirm the
creation of the content needed
for launch of the project.
Set up meetings with
Jackie Lee-Joe,Chief
Marketing Officer to
discuss the marketing
plan to roll out the
extensions to the DVD
plan and inform
consumers of the new
options.
Prior to the end
of 2nd
Quarter
2020 (June
2020)
Access to Jackie Lee-Joe
and her team
Meeting occurs and
parameters are set up for the
marketing goals.
Begin production of the
DVD/Blu-Rays
Prior to the end
of 3rd
Quarter
2020
(September
2020)
Production facility
purchased or outsourced
(depending on cost of
each option)
DVD/Blu-Rays are created
and are of great quality.
News release and
introduction of the new
project to consumers
4th
Quarter
2020 (October
2020)
News outlets and
bloggers
News spreads about the new
DVD/Blu-Ray Project
Roll out of the new
DVD/Blu-Ray Project
to consumers
1st
Quarter
2021 (January
2021)
All of the involved
Netflix departments
Purchase of the products
becomes available to the
consumers
Implementation Plan
Now, with things such as Disney + and Apple TV + being launched among so many other
streaming services, it is the time to step forward with a new plan to move our already cutting-
edge company forward to continue to lead this booming industry of online streaming. We can
only gain more by exploring this idea. If the research and financial reports show that it is a
profitable move, then why not take this opportunity by the horns and push forward. If it is not a
profitable move, then the at least the option has been explored and not just missed. I will be
leaning on my boss and my department head to help with the proposal of this idea to our CEO
Reed Hastings and the board of directors. Since I will be running this project through my boss
and department head, I will be doing weekly and monthly check-ins to determine if we are
staying on track with the project deadlines and if any tweaking of the goals and deadlines needs
to occur via either myself or my mentors suggestions. If my boss doesn’t want to pursue this
idea, I will set up a time to go over the information with him and his boss to see if further
development of the idea is needed before a bigger undertaking of presenting this idea to a higher
level within the company.
Conclusion
As the leader and pioneer of the SVOD world, we must stay ahead of the game.
Although, companies like Disney and CBS have been releasing their content on video for years,
none of them have sold them from a one place purchasing standpoint. Being the only location to
view or purchase our Netflix original content will once again be a brand new idea from the
leader in the SVOD world.
Reference:
Netflix Streaming Plans Retrieved on 01/13/2020 from
https://help.netflix.com/en/node/24926
Netflix Media Center About Netflix Retrieved on 01/13/2020 from
https://media.netflix.com/en/about-netflix
Yahoo! Finance (2020, January 13) Netflix, Inc. Retrieved from
https://finance.yahoo.com/quote/nflx/profile?guccounter=1&guce_referrer=aHR0cHM6L
y93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAALFBNl7UnA2zB7x90PgRYs
UPvPtbHpE7Vtlm2P5cl7MVwHMZuLcapfoC3feFCzKnZRBTcoEJMhRltM5HOIHcWy
9MYD3ShNygsWud93urMcoKMVGFSj0sEl5n86d0An2rZp90JMwza3s7x22V1xP80iG
3qCDcU1_7WymSDJGu10KP
Ewing, J. (2019, February 12) New research highlights streaming demographics trends.
Retrieved from
https://www.forbes.com/sites/jeffewing/2019/02/12/new-research-highlights-streaming-
demographic-trends/#73705d0560b2
N.A. (2019, March 20). Netflix user demographics: Comparing behavior and characteristics.
Retrieved from
https://izeyodiase.com/netflix-user-demographics-comparing-behavior-and-
characteristics/
Iqbal, M. (2020, January 17). Netflix revenue and usage statistics (2018).
Retrieved from
https://www.businessofapps.com/data/netflix-statistics/
Comparably. (N.D.). Netflix mission, vision and values. Retrieved on January 27, 2020 from
https://www.comparably.com/companies/netflix/mission
Castillo, M. (2018, October 25). Netflix reportedly encourages execs to widely explain why they
fire people. Retrieved from
https://www.cnbc.com/2018/10/25/netflix-transparency-encourages-execs-to-talk-about-
firings.html
Anderson, D. (2019, November 18). Netflix Inc.’s organizational culture and its strategic
implications. Retrieved from
https://www.rancord.org/netflix-inc-organizational-culture-hrm-strategic-implications
Atkins, B. (2019, March 21). The Netflix model of board transparency: Is it right for your
company? Retrieved from https://www.forbes.com/sites/betsyatkins/2019/03/21/the-
netflix-model-of-board-transparency-is-it-right-for-your-company/#31cdf3aa18d6
McCarthy, J. (2019, December 3). Top Media trends that could shape the 2020s:Streaming wars,
esports and smart speakers. Retrieved from
https://www.thedrum.com/news/2019/12/03/top-media-trends-could-shape-the-2020s-
streaming-wars-esports-and-smart-speakers
Friedman, D. (N.D.). Netflix - #1 corporate reputation in the United States. Retrieved on January
27, 2020 from
https://insights.reputationinstitute.com/blog-ri/netflix-1-corporate-reputation-in-the-
united-states
CelestialAgent. (2019, December 26). Re: Netflix originals on Blu-ray. Retrieved from
https://forum.blu-ray.com/showthread.php?t=315550
Chitwood, A. (2018, July 26). If Netflix is serious about original films, it should get serious
about physical media. Retrieved from
https://collider.com/netflix-blu-rays/
*Better Business Bureau reviews for
Netflix: https://www.bbb.org/us/ca/los-gatos/profile/internet-service/netflix-inc-1216-
206533/customer-reviews
Hulu: https://www.bbb.org/us/ca/santa-monica/profile/internet-service/hulu-1216-
100105834/customer-reviews
Consumer Affairs review for
Amazon Prime: https://www.consumeraffairs.com/online/amazon-instant-
video.html?page=2#sort=top_reviews&filter=none
Gupta, R. (2019. August 29) Is Netflix’s DVD Business still profitable after 21 years? Retrieved
from
https://marketrealist.com/2019/08/is-netflixs-dvd-business-profitable-after-21-years/
Anderson, M., Perrin, A., Jiang, J., Kumar, M. (2019, April 22). 10% of Americans don’t use the
internet. Who are they? Retrieved from
https://www.pewresearch.org/fact-tank/2019/04/22/some-americans-dont-use-the-
internet-who-are-they/
Bhalerao, P. (2019, July 27). Does a Blu-Ray disc cost more than a DVD to make or are we
being stiffed? Retrieved from
https://www.quora.com/Does-a-Blu-Ray-disc-cost-more-than-a-DVD-to-make-or-are-
we-being-stiffed
Elliott, M. (2019, December 25). You won’t believe how many original movies and shows
Netflix released in 2019. Retrieved from
https://www.cheatsheet.com/entertainment/you-wont-believe-how-many-original-
movies-and-shows-netflix-released-in-2019.html/

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Intrapreneurial business proposal

  • 2. TABLE OF CONTENTS EXTERNAL & INTERNAL BUSINESS ENVIRONMENT............................................................................ 3 INTRODUCTION..................................................................................................................................................................3 COMPANY INFO.................................................................................................................................................................3 INDUSTRY ANALYSIS............................................................................................................................................................3 PRODUCTS/SERVICES..........................................................................................................................................................4 Basic Plan..................................................................................................................................................................4 Standard Plan...........................................................................................................................................................4 Premium Plan...........................................................................................................................................................4 STRATEGIC SCANNING ............................................................................................................... 5 CUSTOMER ANALYSIS..........................................................................................................................................................5 Cable vs Cord Cutter................................................................................................................................................6 COMPETITION....................................................................................................................................................................6 US Subscription Over-the-Top (OTT)Video Service Viewers, by Provider, 2018 .............................................7 PRICECOMPARISON...........................................................................................................................................................7 Price Comparison Chart ..........................................................................................................................................7 WHAT SETS NETFLIX APART.................................................................................................................................................8 MANAGEMENT ..................................................................................................................................................................9 Reed Hastings ..........................................................................................................................................................9 Jessica Neal ..............................................................................................................................................................9 Rachel Whetsone...................................................................................................................................................10 David Hyman..........................................................................................................................................................10 Greg Peters .............................................................................................................................................................11 Spencer Neumann .................................................................................................................................................11 Ted Sarandos..........................................................................................................................................................12 Jackie Lee-Joe.........................................................................................................................................................12 SOLVING A NEED IN THE MARKET............................................................................................... 13 MISSION STATEMENT.......................................................................................................................................................13 VISION STATEMENT..........................................................................................................................................................13 COMPANY VALUES...........................................................................................................................................................13 CORPORATECULTURE & TRANSPARENCY...........................................................................................................................14 Netflix Inc.’s Organizational Culture...................................................................................................................14 MEDIA TRENDS................................................................................................................................................................15 PUBLIC PERCEPTION.........................................................................................................................................................16 CUSTOMER OPINION........................................................................................................................................................17 Netflix......................................................................................................................................................................17 Hulu .........................................................................................................................................................................18 Amazon Prime ........................................................................................................................................................18 BUSINESS OPPORTUNITY...................................................................................................................................................18 IMPLEMENTING INNOVATION ................................................................................................... 19 BUSINESS OPPORTUNITY RECOMMENDATION....................................................................................................................19 United States DVD Sales Chart for Week Ending November 24, 2019..........................................................21 United States Blu-Ray Sales Chart for Week Ending November 24, 2019 ....................................................21 Implementation Action Plan................................................................................................................................23 IMPLEMENTATION PLAN..................................................................................................................................................24 CONCLUSION...................................................................................................................................................................24 REFERENCES....................................................................................................................................................................25
  • 3. Netflix, Inc. Introduction Netflix is a household name in streaming online digital content. As the creator of the first online video streaming service, we have been a leader in the industry for over 20 years. We have over 12 hundred original shows and movies streaming around the world in a wide variety of genres and languages. With over 167 million paid members in over 190 countries Netflix continues to be the world’s leading streaming entertainment service. (Netflix, 2020) External & Internal Business Environment Company Info Netflix is a corporation publicly traded on NasdaqGS. Our co-founders Wilmot Reed Hastings Jr. and Marc Randolph started the company in 1997. Hastings is the current Chairman, President and CEO. Randolph retired from the company in 2003. We are an internet streaming service in the communications sector and entertainment industry. As a business to consumer corporation we look for any opportunities to improve consumer opinion. What better way to do that than to expand our services? Industry Analysis As part of the entertainment industry, the sub industry of streaming is the new norm. Our position within the streaming industry is mature, as the original internet streaming service for movies and series. We offer streaming content both domestically and internationally to 190 countries. With emerging technology and internet capabilities there are a lot of streaming apps, the newest being Disney+. Most streaming apps these days off just their own programming such as CBS all access. Any network can create a streaming app for their programming, but they need
  • 4. a licensing agreement to show programming created by another organization. Examples of this are our company, and Hulu. The internet streaming industry is currently booming. It is in its golden age. We introduced the service and it is still expanding and is now subdividing, as we have seen with networks, like CBS and ABC, and companies like Disney who are now offering their own streaming services. Products/Services We offer “TV series, documentaries, and feature films across various genres and languages. The company provides members the ability to receive streaming content through a host of Internet-connected screens, including TVs, digital video players, television set-top boxes, and mobile devices. It also provides DVDs-by-mail membership services.” (Yahoo! Finance, 2020) The following section is directly from our website on our streaming plans.  Our Basic Plan lets you stream TV shows and movies from Netflix on one device at a time in standard definition (SD). This plan also lets you download titles to one phone or tablet. $8.99  Our Standard Plan lets you stream TV shows and movies from Netflix on two devices at the same time and in high definition (HD) when available. This plan also lets you download titles to two phones or tablets.$12.99  Our Premium Plan lets you stream TV shows and movies from Netflix on four devices at the same time and in high definition (HD) and ultra high definition (UHD) when available. This plan also lets you download titles to four phones or tablets.$15.99 *All plans offer unlimited TV shows and movies, on as many devices as you want. High Definition (HD) and Ultra High Definition (Ultra HD) availability subject to your Internet service and device capabilities. Not all content available in HD or Ultra HD. (Netflix, 2020)
  • 5. The company has approximately 167 million paid members in 190 countries and the pricing is comparable to our competitors. Our competitors have only some of the products and services we offer. One thing that our competitors, like Disney, have that we don’t is the extra ability to profit off the sales of their original content. We have an opportunity to roll out a new plan for purchasing our Netflix Original content outside of the streaming platform. This would allow consumers that don’t have internet the ability to own our content on DVD’s. It would also grant our consumers the ability to purchase a digital copy that they can download directly from the site. Strategic Scanning Customer Analysis “As of Q3 of 2018, 57% of Netflix subscribers are international. This makes 43% US subscribers. 24% of Netflix subscribers are between the ages of 18-24, 25% are 25-34, 19% are 35-44, 17% are 45-54 and 14% are 55+.” (Netflix user demographics, 2019) Nearly two-thirds (59%) of users are heavy users, streaming multiple times a week, and more than half (57%) are women. (Netflix user demographics, 2019) “Based on a survey of 500 US consumers that use a streaming service (conducted Oct. 17-26, 2018) 84% use Netflix, 46% use Amazon Prime, and 28% use Hulu.” (Netflix user demographics, 2019) The majority of streaming is done on Android smart phones and research has shown that more binge watching occurs in colder climates. (Netflix user demographics, 2019; Netflix user demographics, 2019) According to Mansoor Iqbal, “it’s clear that streaming is becoming the predominant method through which people access film and television content.” (2020) Iqbal also quotes a CNBC survey that “shows that for every two people that rely solely on streaming, three rely
  • 6. solely on television.” (2020) The percentage of people who chose both eclipsed both other options. CNBC Cable vs Cord Cutters “[Netflix] Users are categorised not by who they are on paper, but by what they like. The subscriber base is split into 1,300 clusters, three-five of which are assigned to each user, weighted based on viewing preferences.” (Iqbal, 2020) Netflix is available on a multitude of devices: Streaming media players, smart tv’s, game consoles, set-top boxes, blu-ray players, smartphones, tablets, pc’s and laptops. Even with all of these options televisions are still the most popular way to stream at 70%. (Iqbal, 2020) Competition According to Iqbal via eMarketer.com, the four biggest video streaming services in the U.S., as of July 2018, are YouTube, Netflix, Amazon Prime, and Hulu, with YouTube being the only one that doesn’t require a paid membership. (2020) “Among all users [not including YouTubers], 84% use Netflix, 46% use Amazon Prime, and 28% use Hulu.” (Ewing, 2019) As of January 2020, Disney + has now joined the running as one of Netflix’s newest competitors. Although, Disney + is not as high of a competitor as Hulu an Amazon Prime, it is certainly a
  • 7. contender since pulling all of its content from Netflix and causing a large number of Marvel content to be canceled. Disney’s entrance onto the streaming scene has and will be a huge impact to Netflix in the coming year. US Over-the-top (OTT) Video Service Viewers, by Provider, 2018 Price Comparison Hulu Price Amazon Prime Price Basic 5.99 Amazon Prime Annual 119.00 Basic no ads 11.99 Amazon Prime Student Annual 59.00 With Live TV 54.99 Amazon Prime Monthly 12.99 With Live TV no ads 60.99 Amazon Prime Student Monthly 6.49 Add on: HBO 14.99 Discounted for EBT and Medicaid Holders 5.99 Add on: Cinemax 9.99 Add on: Showtime 10.99 Add on: Starz 8.99
  • 8. Netflix Price Disney + Price Basic: 1 Screen 8.99 Basic 6.99 Standard: 2 Screens 12.99 Basic Annual 69.99 Premium Ultra HD: 4 Screens 15.99 Bundle Monthly Includes Disney +, Hulu, and/or ESPN+ 12.99 The pricing of all 4 Streaming services are very comparable within a few dollars of each other. Hulu starts with the least expensive option but allows for many add-ons that add up quickly. If a consumer had the live tv with no ads and all of the add-ons it would total $105.95 per month. Hulu is the only service to offer live tv among these four. Amazon Prime ties their streaming service in with their Amazon purchasing account as well which allows for even more benefits. Amazon is the only service to provide a discount for students and those on Medicaid or EBT (Foodstamps). Disney + offers the chance to bundle with your already existing Hulu account (which they also own) as well as ESPN+. Netflix offers all of our plans based on the number of screens the consumer may want to view at the same time. What Sets Netflix Apart As the first company to allow consumers to stream video content online, we are the industry leaders. Netflix is streamed more than any other streaming service in the U.S. and the world. With 84% of streamers having a Netflix account the question isn’t how to become the number 1 company but how to stay the company to beat. With Disney + entering the scene and removing its content from our line-up, we must step-up our game and look for new ways to corner the market. One way we can do this would be to offer the ability for our Netflix Originals to be purchased either through a DVD/Blu-ray option, or a direct download.
  • 9. Management The following is directly from our website: https://media.netflix.com/en/management- team ReedHastings FOUNDER AND CEO Reed Hastings co-founded Netflix in 1997. In 1991, Reed founded Pure Software, which made tools for software developers. After a 1995 IPO, and several acquisitions, Pure was acquired by Rational Software in 1997. Reed is an active educational philanthropist and served on the California State Board of Education from 2000 to 2004. He is currently on the board of several educational organizations including KIPP and Pahara. Reed is also a board member of The City Fund. Reed received a BA from Bowdoin College in 1983, and an MSCS in Artificial Intelligence from Stanford University in 1988. Between Bowdoin and Stanford, Reed served in the Peace Corps as a high school math teacher in Swaziland. Reed is married with two children. Jessica Neal CHIEF TALENT OFFICER Jessica Neal is a Netflix veteran, starting at the company in 2006 when DVD was king and streaming just a dream, and has been heavily involved in improving the Netflix culture as the company grew. In 2013 she left to become head of human resources at Coursera, which provides online access to the world’s best university courses, and, later, Chief People Officer at Scopely, a leading player in the mobile gaming industry. She returned to Netflix in June of 2017 overseeing HR for the 2000-person product engineering team responsible for continuously improving the
  • 10. Netflix consumer experience. Neal also serves on the board of directors of the Association for Talent Development. Rachel Whetstone CHIEF COMMUNICATIONS OFFICER Rachel Whestone was named CCO of Netflix in August2018. She has spent the last 13 years working on communications and policy issues for US technology companies. She joined Google in 2005 and served as Senior Vice President of Communications & Public Policy from 2011 to 2015. She held the same position at Uber from 2015 till 2017, before joining Facebook as a Vice President of Communications. Rachel is a graduate of Bristol University and spent the first half of her career working as a policy advisor for the UK Conservative Party. David Hyman GENERAL COUNSEL David Hyman is General Counsel for Netflix, responsible for all legal and public policy matters for the company. He has served in this capacity since 2002 and also serves as the company’s Secretary. Prior to Netflix, David was the General Counsel of Webvan, an online Internet retailer, having previously held the role of senior corporate counsel. He also practiced law at Morrison & Foerster in San Francisco and Arent Fox in Washington, DC. David earned his JD and Bachelor’s degrees from the University of Virginia.
  • 11. Greg Peters CHIEF PRODUCT OFFICER Greg Peters assumed the role of Chief Product Officer in July 2017 and leads the product team, which designs, builds and optimizes the Netflix experience. Previously, Greg was International Development Officer for Netflix, responsible for the global partnerships with consumer electronics companies, Internet service providers and multi-channel video programming distributors that enable Netflix to deliver movies and TV shows across a full range of devices and platforms. Prior to joining Netflix in 2008, Greg was senior vice president of consumer electronics products for Macrovision Solutions Corp. (later renamed to Rovi Corporation) and previously held positions at digital entertainment software provider, Mediabolic Inc., Red Hat Network, the provider of Linux and Open Source technology, and online vendor Wine.com. Greg holds a degree in physics and astronomy from Yale University. Greg joined the board of 2U, Inc., a global leader in education technology, in March of 2018. Spencer Neumann CHIEF FINANCIAL OFFICER Spencer Neumann was named CFO of Netflix in January of 2019. Previously, he served as Activision Blizzard’s CFO from May 2017. Prior to that, Mr. Neumann held a number of positions of increasing responsibility at The Walt Disney Company, most recently serving as the CFO and executive vice president of Global Guest Experience of Walt Disney Parks and Resorts, from 2012 until May 2017. From 2005 to 2012, Mr. Neumann worked at the private equity firms of Providence Equity Partners and Summit Partners. Prior to that, Mr. Neumann held several
  • 12. other roles with Disney, which he initially joined in 1992, including executive vice president of the ABC Television Network from 2001 to 2004 and CFO of the Walt Disney Internet Group from 1999 to 2001. He is also a member of the national board of directors of Make-A-Wish America. Mr. Neumann holds a B.A. degree in economics from Harvard University and an M.B.A. degree from Harvard University. Ted Sarandos CHIEF CONTENT OFFICER Ted Sarandos is Chief Content Officer at Netflix, overseeing the teams responsible for the acquisition and creation of all Netflix content including original series from around the world such as Stranger Things, Dark (Germany) La Casa De Papel (Spain), and Sacred Games (India) and original films including such blockbusters as To All the Boys I've Loved Before, Bright, and Bird Box and the 3-time Academy Award winning film ROMA. Ted has been responsible for all content operation since 2000, and led the company's transition into original content production that began in 2013 with the launch of the series House of Cards, Arrested Development and Orange is the New Black, among numerous others. Today, Netflix is available in 190 countries and Netflix originals have received numerous awards around the world including 93 Primetime Emmy wins, 6 Oscars, and 5 BAFTA Film Awards including Best Picture. Jackie Lee-Joe CHIEF MARKETING OFFICER A graduate of the University of Sydney and the University of New South Wales, Jackie joined Netflix in September 2019. Prior to joining Netflix, Jackie served as CMO of BBC Studios, part
  • 13. of the British Broadcasting Corporation. Before November 2015, she was Skype's Global Director for Audience, Entertainment Marketing & Broadcast Media. Jackie has over 20 years of marketing experience with leading media, technology and telecoms companies including Virgin Mobile, Carphone Warehouse and Orange. Solving A Need In The Market MissionStatement “Our core strategy is to grow our streaming subscription business domestically and globally. We are continuously improving the customer experience with a focus on expanding our streaming content, enhancing our user interface and extending our streaming service to even more internet-connected devices, while staying within the parameters of our consolidated net income and operating segment contribution profit targets.” (Comparably, n.d.) Vision Statement Becoming the best global entertainment distribution service. Licensing entertainment content around the world, creating markets that are accessible to film makers and helping content creators around the world to find a global audience. (Comparably, n.d.) Company Values Source: (Comparably, n.d.) t
  • 14. Corporate Culture & Transparency Our corporate culture is one of employee transparency. Executives and management are expected to notify employees when a fellow employee is let go and why they were fired. This allows for growth potential for the other employees. Hastings has also implemented ““sunshining”, a practice where people explain their decisions in public.” We also have a policy in place that allows for the visibility of all employee’s salaries once an executive is above the director. (Castillo, 2018) Most people see our culture as unusual, but it’s based on prioritizing people. Prioritizing People is one of our core philosophies and leads to an organizational culture that contributes to our employee morale, effectiveness, and overall human resource development. (Anderson, 2019) Source: (Anderson, 2019)
  • 15. We, here at Netflix are completely on board with transparency with those outside of the company. Everything we do in our corporate practice is available for the world to see. We use a more effective way of running board meetings as well. Instead of large Power Point presentations with only the knowledge the CEO feels the board members need, we do 20-40 page memos, days before the meeting and expect our board members to take an active part in the company and how it’s different departments work. Having this extensive knowledge of how the company works allowed for the quick and seamless transition from DVD to streaming and when we began to stream and license our own original content. (Atkins, 2019) Media trends Subscription video on demand (SVOD) is currently booming with everyone seeming to jump on the bandwagon. Newest to the platform are those such as Disney+, Apple TV+, HBO Max, and NBC Peacock. (McCarthy, 2019) With so many companies offering their original content on their platform only it will start leaving consumers choosing which SVOD is best. “44% of connected consumers who pay for an online streaming service have at least two subscriptions, 18% pay for at least three, and 7% pay for four or more. This suggests that the market could prove difficult for new subscription-based streaming services, as consumer attention, and wallets, only stretch so far.” (McCarthy, 2019) McCarthy wrote about Sushmita Jain from Kantar, who asked “this increased competition may seem healthy, but will we see subscription fatigue leading to industry consolidation?” (2019) “According to Kantar, the services with the highest quality original content and understanding of their audiences will come out on top.” (McCarthy, 2019)
  • 16. Public Perception According to Daniel Friedman, an associate at the Reputation Institute, Netflix is rated the #1 Corporate Reputation in the United States. (n.d.) We have made some dynamic decisions that the public is more than just noticing. When the #MeToo movement brought to light the morally questionable actions of Kevin Spacey, we had a decision to make. We could stick with Mr. Spacey and finish the final season of House of Cards or we could follow our own moral compass and take a stand for what was right. We followed our hearts not our bottom line and let Mr. Spacey go and stopped all production on the set and the public noticed. We showed the world that money was not more important than people’s lives. (Friedman, n.d.) Following our own policy of transparency, we also let go of former CCO Johnathan Friedland when we found out he had used inappropriate language in private meetings. Morally questionable behavior cannot and will not be acceptable here at Netflix. As pointed out by Friedman, “confronting issues decisively and openly engenders a level of trust with the public that can’t be beat.” (n.d.) “Fortunately for Netflix, its rise to the top of the reputational ladder reflects its unique emotional connection with the public. Try as competitors might, Netflix has credit in the public’s emotional bank to weather nearly any competitive storm and to differentiate itself from rivals. By continuing to push new boundaries and go where no mere entertainment company has gone before, Netflix is well-positioned to continue its reign atop the reputational rankings and to thrive based on its strong values and innovative product portfolio.” (Friedman, n.d.)
  • 17. Customer Opinion Netflix The majority of complaints on the Better Business Bureau are about being double billed due to having multiple accounts or having accounts that were upgrading without the customer being aware. It seems that most of the complaints were from people that were unaware of the process of how to fix this issue. Every one of the complaints I read through included someone being hacked. We always send a welcome email to the associated email account when an account is created. We, also, send email confirmations anytime a change is made to an account. In addition to these notifications, if a customer calls in about a breach or hacking of their account, we will immediately help fix the issue, whether it is an email change, password reset, or change in the credit card being used. We also reply to the majority of the complaints through the BBB as a curtesy to provide better customer service even for the customers that have left our service. The majority of positive reviews revolve around the content available for streaming. Unfortunately, there doesn’t seem to be much more in the way of positive feedback beyond the content itself. Customers tend relay their opinions about the content directly on the Facebook post associate with the program they seem to be interested in. This does help narrow down the opinions on the programming itself. On Blu-ray.com, there is a long thread about Netflix not releasing any of the Netflix Originals in physical form. There are very few exceptions such as House of Cards and Stranger Things. It is unclear as to why the majority of original content continues to stay streamable only, but it doesn’t seem to be a move being considered anytime in the near future. According to Adam Chitwood, “Netflix now threatens to deny cinephiles and collectors the chance to own a physical copy of their favorite filmmakers’ latest feature. If Netflix wants to be the home for true
  • 18. film fans, the way it positioned itself as the destination for TV obsessives (though less-so as of late as Netflix has opted to let licenses for library titles expire in favor of pushing their own original TV content), it should do it right.” (2018) Hulu Hulu customers main complaint according to the Better Business Bureau is that their no ads package is not actually no ads, but no ads on certain programming. There is also a large amount of complaints about their customer service number not. Being available and being very difficult to track down. Also, there are only 5 responses to the 61 complaints listed at the BBB website and the last response was done on 4/24/2017. Amazon Prime According to Consumer Affairs, the majority of reviews for Amazon Prime are positive. Most of the consumers are happy with the price and content being provided. As with all of the above services there are complaints about refund issues on overcharged services, and bad customer service reps. Although, for the most part the reviews are positive there does seem to be a lot of complaints about streaming speeds and the need to pay extra for certain movies and shows beyond the monthly service fee. Most of the reviews included statements about using Amazon Prime in conjunction with Netflix and Hulu and pulling away from traditional television services. Business Opportunity “Reputation Institute’s data shows that Netflix’s score for Products and Services outpaces an average of US industry competitors by 10.4 points and Netflix’s revenue increased to an all- time high of $4.19 billion USD.
  • 19. By unveiling innovative and successful products, Netflix was able to disrupt the entertainment industry and position itself as the inclusive, progressive, and beloved content- creator of the future.” (Friedman, n.d.) As a producer of “innovative and successful products” we should not be afraid of the tried and true of our competitors as well. With Disney + entering the field of streaming service providers we need to position company with yet something else no one else has. Other providers such as Amazon Prime also has original content that is only available through their monthly service, but we could get ahead of the game and start releasing our own original content before our competition, yet again being a leader in the industry. As Adam Chitwood stated, “If they’re worried about hindering the entire idea of a “Netflix original movie” as a subscriber-exclusive, put a one-year window on it. Hold the Blu- ray for 12 months, then release it. I’ll wait.” (2018) Our consumers are willing to wait for the chance to own the original content. That still leaves consumers only 2 options to watch the content; either watch it through the membership or pay to own a physical copy. It still wouldn’t be available through our competitors. Implementing Innovation Business Opportunity Recommendation We should start releasing our Netflix original content on DVD/Blu-ray through our DVD rental plan. The content would still only be available through us without the mark-up of having to pay others to sell our content and keeps it exclusive to Netflix. We can also sell the content as a digital copy, again only available through the Netflix site. With the DVD subscription we could not just rent copies of our content but sell them as well. Currently, our monthly plan for DVD rentals is $7.99/month and there are 2.4 million
  • 20. subscribers. (Gupta, 2019) According to Gupta, “Netflix’s DVD business generated $76.2 million in revenues in the second quarter. The company’s DVD business contributed more to the bottom line. In the second quarter, the DVD business produced a profit of $46.9 million, which represented 6.5% of the total profit.” (2019) By adding our original content to the library of DVD/Blu-rays we open up to a large audience of consumers. Now, they will have the opportunity to watch shows that were only available to those using the streaming products. According to the Pew Research Center, 10% of Americans don’t use the internet. (Anderson et al., 2019) With a population of 329,234,490 people that is a potential 32.9 million consumers for Netflix original content on DVD/Blu-ray just in the United States. With 2.4 million subscribers to the DVD plan that is only 7.3% of those not using the internet. The below chart from The Numbers, shows the United States DVD Sales Chart for Week Ending November 24, 2019. According to the chart, even movies like Beauty and the Beast, released nearly 30 years ago made $163,443 in one week. Whereas, Fast & Furious Presents: Hobbs & Shaw made $1,613,588 that same week. These numbers don’t even include the Blu-ray numbers which added another $1,652,359 to the Hobbs & Shaw numbers. Combined that is $3,265,947 in one week with just DVD/Blu-ray sales.
  • 21. United States DVD Sales Chart for Week Ending November 24, 2019 Source of Image: https://www.the-numbers.com/weekly-dvd-sales-chart United States Blu-ray Sales Chart for Week Ending November 24, 2019 Source of Image: https://www.the-numbers.com/home-market/bluray-sales-chart/2019/11/24
  • 22. On one Quora discussion, Prasanna Bhalerao, M.Sc. Physics & Electronics, Fergusson College, Pune, shared the manufacturing cost of a Blue-ray at $2-4 for manufacturing, $1-2 for licensing of copyright protection software, and $1 in logistics and shipping, totaling around $4- $7 per Blu-ray. (Bhalerao, 2019) In consideration that Netflix already has our own shipping set up for the existing DVD/Blu-rays being mailed out that part of the equation would be eliminated bringing the cost down to $3-$6 a disc. While using the original content to bring in more subscribers will increase the revenue of the DVD subscription plan itself, the chance to sell the titles at around $15-$20 per disc for individual titles and considerably more for the series is where the biggest part of the profit lies. There are 1227 pieces of Netflix originals to date. 371 of those shows and movies were released just in 2019. (Elliott, 2019) “According to Netflix, its most popular original movies between October 2018 and September 2019 were Bird Box (80 million views), Murder Mystery (73 million), Triple Frontier (52 million), The Perfect Date (48 million), and Tall Girl (41 million). Other movies with more than 20 million views included Fyre, Otherhood, Always Be My Maybe, Secret Obsession, and The Highwaymen. A view means that 70% of the movie was watched within four weeks of its release. The top TV shows during that same period were Stranger Things (64 million views), The Umbrella Academy (45 million), La Casa de Papel (44 million), You (40 million), and Sex Education (40 million). For television shows, streaming at least 70% of one episode within four weeks of its release counts as a view.” (Elliot, 2019) If we take Bird Box for example, with 80 million views and only ¼ of those viewers bought the movie that would accumulate to $300- $400 million for just one of the Netflix original movies. Let’s look at Orange is the New Black. With 105 million viewers. There are 7 seasons with 13 episodes each. At $50 per season for ¼ of
  • 23. the viewers that totals $1,312,500,000 for just one season and $9,187,500,000 for the whole series to date. This increase in revenue would be instrumental in continuing to expand the production of more original content. Implementation Action Plan STEPS TIMELINE RESOURCES SUCCESS INDICATORS Set up meetings with Spencer Neumann and the Finance Division to precure funds for the DVD/Blu-Ray Project Prior to the end of 1st Quarter 2020 (March 2020) Access to the finance team Funding is created for the project Purchase the copyright protection software. 2nd Quarter 2020 (April 2020) Macrovision Software is received Set up meeting with Greg Peters,the Chief Product Officer to begin creating the platform around the DVD/Blu-Ray launch 2nd Quarter 2020 (April 2020) Access to Greg Peters and his team Meeting occurs and parameters are set up for the platform creation goals Work with the Content Creation Team 2nd Quarter 2020 (May 2020) List of employees involved in the content creation of the individual originals and what they need to create for a DVD/Blu-Ray release Meetings set up with Ted Sarandos to confirm the creation of the content needed for launch of the project. Set up meetings with Jackie Lee-Joe,Chief Marketing Officer to discuss the marketing plan to roll out the extensions to the DVD plan and inform consumers of the new options. Prior to the end of 2nd Quarter 2020 (June 2020) Access to Jackie Lee-Joe and her team Meeting occurs and parameters are set up for the marketing goals. Begin production of the DVD/Blu-Rays Prior to the end of 3rd Quarter 2020 (September 2020) Production facility purchased or outsourced (depending on cost of each option) DVD/Blu-Rays are created and are of great quality. News release and introduction of the new project to consumers 4th Quarter 2020 (October 2020) News outlets and bloggers News spreads about the new DVD/Blu-Ray Project Roll out of the new DVD/Blu-Ray Project to consumers 1st Quarter 2021 (January 2021) All of the involved Netflix departments Purchase of the products becomes available to the consumers
  • 24. Implementation Plan Now, with things such as Disney + and Apple TV + being launched among so many other streaming services, it is the time to step forward with a new plan to move our already cutting- edge company forward to continue to lead this booming industry of online streaming. We can only gain more by exploring this idea. If the research and financial reports show that it is a profitable move, then why not take this opportunity by the horns and push forward. If it is not a profitable move, then the at least the option has been explored and not just missed. I will be leaning on my boss and my department head to help with the proposal of this idea to our CEO Reed Hastings and the board of directors. Since I will be running this project through my boss and department head, I will be doing weekly and monthly check-ins to determine if we are staying on track with the project deadlines and if any tweaking of the goals and deadlines needs to occur via either myself or my mentors suggestions. If my boss doesn’t want to pursue this idea, I will set up a time to go over the information with him and his boss to see if further development of the idea is needed before a bigger undertaking of presenting this idea to a higher level within the company. Conclusion As the leader and pioneer of the SVOD world, we must stay ahead of the game. Although, companies like Disney and CBS have been releasing their content on video for years, none of them have sold them from a one place purchasing standpoint. Being the only location to view or purchase our Netflix original content will once again be a brand new idea from the leader in the SVOD world.
  • 25.
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