Over the course of the semester I worked on a group project on Netflix. Taking a look into Netflix's history and how they compete against their competitors.
3. History
● In 1997, Reed Hastings and Marc Randolph ships DVDs to homes.
● 2007, Netflix starts as a streaming service (Watch Now Starts around 1,000 titles)
● 2013, Netflix begins producing original content
4. Mission and Vision
Netflix does not have a published mission statement. However, the Netflix
Company Values have been published as:
- Judgment
- Productivity
- Creativity
- Intelligence
- Honesty
- Communication
- Selflessness
- Reliability
- Passion
5. - Becoming the best global entertainment distribution
service
- Licensing entertainment content around the world
- Creating markets that are accessible to filmmakers
- Helping content creators around the world to find a
global audience
Reed Hastings’ Company Aspirations
6. David WellsTed SarandosGreg PetersJessica Neal
Kelly BennettDavid Hyman
Chief Talent Officer Chief Product Officer Chief Content Officer Chief Financial Officer
Chief Marketing OfficerGeneral Council
Reed Hastings
Founder, CEO
7. Notable Board of Directors Members
Anne Sweeney
Former President of Disney/ABC
Television Group
Brad Smith
President and Chief Legal
Officer of Microsoft
Ann Mather
Former VP + CFO of Pixar
Leslie Kilgore
Board of Directors for
Netdoor/LinkedIn
Susan Rice
Former US National
Security Advisor
8.
9. The Netflix Experience
Three main segments:
● Domestic Streaming
● International Streaming
● Domestic DVD
Types of content (both original and licensed)
● Episodic shows
● Movies
● Documentaries
Mediums:
● Televisions
● Computers/Gaming consoles
● Mobile Devices
Netflix notable features:
● Algorithms for unique system of suggested
content
● Original content catered to non-domestic
audiences
● Intuitive and simple UX
10. BCG Matrix Analysis
Stars:
● Domestic Streaming
● Original Programming
○ Noteworthy originals with iconic casts and
big followings.
Question Marks:
● International Streaming
○ Creating original content (some catered
to region) ex.Somos Netflix
● “Choose-your-own-adventure”
○ Experimenting giving users choices
● Voice
○ Asking for programs out loud and being
shown programs that match
Cash Cows
● Streaming non-Netflix original shows and
movies
○ Less invested, but still profitable
Dogs:
● Physical DVD Subscriptions
○ Declining, but still highest in US
(2.99 mil)
11. Competitors
- Hulu
- Having their own shows
- Offers shows that were recently on Netflix
- Deals for College students
- Prime Video
- Recently started making their own shows
- Offered with Amazon Prime
- On Demand
- Able to watch shows you may have missed that day
- Most likely to find what you are looking for
- YouTube
- Original Content from celebrities, social media influencers, and YT stars
- YouTube Red: Paid, subscription service with many benefits including original movies/shows
12.
13. Primary and Secondary Streaming Competitors
Primary Competitor
-Hulu (over 20 Million Subscribers)
Slogan “We’re About to Ruin TV for You”
Secondary Competitor
-Amazon Prime (100 Million Subscribers)
16. Social
● Streaming - people want to be able to watch their favorite shows whenever
they want
● Lack of Interest in Ownership - consumers no longer care to own a hard copy
of a movie (DVDs are outdated); it is more convenient to select the file on a
streaming service as opposing to storing the hard copy in one’s home risking
it being lost, or damaged
17. Economic
● Cord cutting - with cable subscriptions becoming too costly, consumers are
choosing to alleviate the financial burden and exclusively pay for streaming
services
18. Technological
● Subscriptions - we are moving away from “pay-per-use” and moving towards
subscriptions. We’ve seen this happen with companies such as Blockbuster
going out of business and companies such as Netflix and Hulu continuing to
rise in popularity.
19. Competitive
● Competitors such as Amazon Prime create original content, forcing Netflix
and others to mimic the other streaming services and provide their own
movies and shows
● Blockbuster and other rental stores are disappearing
20. Regulatory
● Net Neutrality - Netflix would not be negatively impacted by the introduction of
net neutrality. It is popular enough with ISPs to the degree that their
streaming quality and domestic margins would remain strong. If Netflix was
charged by internet service providers for access to their networks, it is such a
massively popular service that it would not only be able to afford the fee, it
would remain at the top of the market. It would be largely unharmed whereas
smaller streaming services would be more impacted by these added costs
● Antitrust
● Penetrating foreign markets
21. SWOT Analysis
Strengths Opportunities
Weaknesses Threats
- Hold 77% of all video on demand users in
the US (Forbes, 2017)
- Intuitive UX
- Multi-platform Accessibility
- Critically acclaimed
- 112 Emmy Nominations (1st)
- 23 Emmys (Tied for 1st)
- International expansion and content
unique to culture/region
- Mobile Data Deals
- Marketing strategies based around social
trends
- Lose License shows frequently
- Original programming is very
expensive
- DVD subscribers declining
- No partnerships with any other
organization such as Hulu + Spotify
- Losing streaming rights to popular
movies and shows to other services
- Torrents or any illegal streaming
services
22. Segmentation
“Netflix divides its 93 million users around the world into 1,300 taste communities. Geography, age,
and gender? We put that in the garbage heap.” -Todd Yellin VP of Product at Netflix
- Geographic- Netflix makes content for everyone. There is European original content such as
“Dark” and American original content such as “House of Cards”.
- Demographic- Some content is made with a particular sector of a population in mind. For
example, Netflix Kids original content.
- Psychographic- Users with different aspirations or attitudes are likely to watch different series.
World history buffs might enjoy “The Crown” while college students might take a study break
and watch “Friends”.
- Behavioral- Users devote their time to netflix in different ways. Some binge watch series while
others watch a series over a period of time. Users also use different devices, depending on
location.
23. ● Netflix divides its more than 93 million global customers (half of which are outside the US) into
communities of members with similar movie and TV show preferences and makes
recommendations based on what’s popular in those communities. It calls those groups “taste
communities” and there are roughly 1,300 of them.
● Grouping consumers based on what they stream/watch/enjoy as opposed to other demographics
“We have seen that where you live, gender, age and other demographics
are not significantly indicative of the content you will enjoy.” -Netflix
Spokesperson
Netflix’s “Taste Communities”
24. Target Market
1. College students ages 18-24 who are
trendsetters and opinion leaders in their
social circles
2. Adults ages 25-55 who have children
3. Households that average $102,000 < each
year (middle class)
4. Families
28. Advertising Funnel
Those interested choose a plan that is best
for them (basic, standard, premium) and
enter their payment if they choose to get a
subscription after the free trial.
Invites potential leads to enter the funnel by
participating in a 1 month free trial.
The potential leads actually sign up for the
free trial with an email address allowing
Netflix to follow up when the free trial ends.
Leads are thrilled after their free trial ends
and choose to become a Netflix customer.
30. Stage
Action
Thinking
Feeling
Opportunity
Touch
Points
Awareness Consideration Evaluate / Trial Purchase Post Purchase
-Seen different ads for
streaming services
-Watch YouTube
-View comments on
social media
-How much does it
cost per month?
-Will it satisfy my
needs?
-Is it better than Cable
-Stressed
-Excited
-Cautious
-Find quality content
-Save money
-Advertisements
-Word of mouth
-Realize that cable is
too expensive
-Satisfied
-Happy
-Less stressed
-Does Netflix have my
favorite shows?
-Which platform is
most cost efficient?
-Can I afford it?
-Research info on
Netflix
-Comment questions
on social media
-ask friends for advice
-Website
-YouTube videos
-Social media posts
-Netflix
-TV, PC
-Ability to see that
Netflix is a cheaper
alternative to cable
-Determined
-Confident
-Can I set up multiple
accounts?
-Does it work well on
all platforms?
-Is it up to standards
-Try Netflix’s free trial
-Paperwork/bills
-Ability to save money
and still be able to
watch favorite shows
-Excited
-Satisfied
-Did I make the right
decision, am I
satisfying my needs?
-Watch Netflix with
friends
-Use Netflix to watch
shows and pass time
-Bills
-Opportunity to
experience new
shows with friends in
ways that were not
possible beforehand
-Slight buyer’s
remorse
-Delighted that it
meets their needs
-Is it doing everything
i need it to do?
-Binge watch favorite
shows and new
Netflix Originals
31.
32.
33. Promotional Channel Strategy
Digital:
● Active Presence on Social Media
● Use ads on relevant YouTube content,
and Google Adsense
● Snapchat filters (ex. Shadow Monster)
● Have actors use branded hashtags on
social media to build up hype
Non-Digital:
● Bus-stop posters and billboards in
prominent cities to promote new seasons
of original content
● Pop-up shops related to shows (ex.
Scoops Ahoy Ice Cream Shop)
34. Social Media Zones
Social Community
● Actively engages on Twitter, Facebook,
Instagram, etc.
● Netflix as a social media platform
● CRM (Email movie/show suggestions)
Social Publications
● Create trailers, promotional videos, etc.
● Website and apps
● Actors as influencers
Social e-commerce
● Only subscribe through traditional means
(credit card, savings, debit)
● Sell merchandise related to shows through
third parties (Target, boutique shops)
Social Entertainment
● Original programming, Netflix
programming (movies, docs, shows)
