Marketing Plan Netflix

The movie rental industry is a living industry; there are constant changes with advances in technology, rights management, and the slow, but steady, move away from physical Media. Companies such as Netflix, Hulu, RedBox, and Blockbuster are being forced to look at new business models and try to keep up with these changes.

Netflix is first provider of delivered DVDs by mail that became common way and convenience for customer. Netflix offers DVDs to customers with quick delivery, which is mostly within one day (Willy Shih, Stephen Kaufman & David Spinola, 2007). In addition, customers utilize good recommendation system provided by Netflix (Scoot Merrill, 2009). Besides, customers are able to be given good customer service support (Katie Hafner, 2009).

While Redbox is one of our biggest competitors for viewers, it seems that the DVD rental market is on a downward trend. Therefore it is probably best to focus on companies that are intent on delivering video streaming. One recent player in the market is Sling TV, which is a subsidiary of Direct TV, and they have an offering of content that covers an area of entertainment that we have not been able to crack into (Katzmaier, 2015). They stream live cable programs such as AMC, TNT, TBS, Disney, HGTV, Cartoon Network, and ESPN to users for twenty dollars a month. While they are still subject to commercials and do not offer the ability to fast forward on certain channels, their product offering is one that differs enough from Netflix to cause

Netflix founder, Reed Hastings, recognized an unfulfilled need in the movie rental industry and started Netflix to provide customers with the ability to receive movies through the mail and not pay any late fees which were prevalent at the time with companies like Blockbuster (Kotler & Keller, 2009). Netflix has continued to expand its service offerings but providing members with the ability to download movies directly without any additional fees.

1. Netflix’s original marketing strategy offered several flat-rate monthly subscription options; in which, members could stream movies and shows via the Internet or have disks sent to their homes in a pre-paid and pre-addressed envelope. Free from the despair of due dates and late fees, members could keep, up to, eight movies at a time. Upon the return of a disk, Netflix would automatically mail out the next movie from the customer’s video queue. Members were able to change and update their queues as frequently as they liked. The sheer innovation of Netflix’s strategy encouraged several competitors to enter the market to compete directly,

The forces that are driving change are more than likely going to be unfavorable to the movie rental industry considering the convenience and included perks of choosing them. I’ve had experience in the movie rental industry

Reed Hastings and Marc Randolph co-founded Netflix in Los Gatos, California in 1997. Between 1998-2000, Netflix launched its online rentals, sales, subscription service, and a system of recommendations that can predict a consumer’s choice (Netflix). In May 2002, Netflix announced its first public offering led by Merrill Lynch. They offered over 5 million shares of common stock for $15 per share.

Entering and transforming the video rental industry was a large undertaking for the start-up company. The first marketing objective the company undertook was the process of building a brand. Netflix’s identity was crucial to future growth and success. Without a strong brand, competitors with deep pockets could have easily duplicated the company’s business model. Secondly, leveraging technology was critical to establishing the business and infrastructure growth. The consumer base was the final objective Netflix sought to achieve. Retaining and growing subscribers were fundamental to revenue and marketing goals.

Netflix is able to offer its customers a flat monthly fee for services, no contract requirement, no late fees, a large variety of television shows and movies, in a convenient way, at a reasonable price.

The video rental industry began with brick and mortar store that rented VSH tape. Enhanced internet commerce and the advent of the DVD provided a opportunity for a new avenue for securing movie rentals. In 1998 Netflix headquartered in Los Gatos California began operations as a regional online movie rental company. While the firm demonstrated that a market for online rentals existed, it was not financially successfully. Netflix lost over $11 million in 1998 and as a result significantly changed the business model in 2000. The new strategy included focusing on becoming a nationally based subscription model and focusing on enhancing the subscribers experience on their website. The change in

Netflix previously had a plan in which it included both online streaming, as well as unlimited DVDs by mail, 4 out at a time, for $9.99 a month (Gregory, 2011). However, in July of 2011, CEO, Reed Hastings, announced that they were going to separate the online and DVDs plan and charge

When Netflix was established in 1998, it shook the whole video rental industry by delivering the services that customers actually wanted. It was not about the movies it had in stock, because these were the same with Blockbuster or any other established video rental business. To them it was about how customers can get the best out of what they had to offer.

Netflix, the online subscription-based DVD rental service aimed to better satisfy customer in a way competitors didn’t, customized and personalized service with unlimited monthly rentals from a great variety of film offerings. Now they want to leverage their strengths to enter into the Video on Demand market

As of August 2005, Netflix employed approximately 1,200 people in the United States. About 1,000 of them work in the company 's distribution centers around the country; close to 200 employees work at the company 's headquarters in Los Gatos; and 20 employees work in studios in Los Angeles (ChronicleJobs, 2005). Netflix offers their members more than 55,000 DVD title selections. This is more than any other online rental service in the United States. In 2005, Netflix shipped more than 1 million DVDs a day. Its inventory was approximately 20 million DVDs, and Netflix spent $84.2 million acquiring new DVDs. As of September 30, 2005, the company 's balance sheet showed its DVD holdings at a net value of $52.7 million after depreciation (Maddox & Thompson, 2006).Today the revenue of Netflix reached to $440 million and continuing ways of success.

Netflix is recovering from one of the worst self-inflicted corporate marketing gaffes in years. After years of offering an excellent value to customers purchasing its unlimited single DVD and streaming services for only $9.99 a month, Netflix unexpectedly announced that it would be completely separating its DVD service from its streaming service, causing a price increasing of 60% to $15.98 for customers who wanted to keep both services. Overnight, Netflix angered many of its very loyal customers and lost over 800,000 of its 24.6 million members due to the debacle [1]. Adding fuel to the fire, Netflix decided to actually create separate brands and separate websites for the two services, keeping the Netflix name for its streaming services