Netflix, An Internet Subscription Service Company

This report analyzes the company Netflix to determine whether or not it makes a good investment at this time. Netflix was founded in 1997 in California. The company launched its website that same year, at the time the company was composed of only 30 employees and had close to 1000 DVD’S available to rent. Netflix was one of the first company’s to offer rental DVD’s on a monthly subscription basis rather than having to pay per DVD. The year 2007 was a big year for Netflix and its first step toward its new business model. Netflix moved away from renting DVD’s and instead shifted to video on demand via the Internet. Today, Netflix holds the spot as the world’s top Internet television network; with almost fifty million subscribers in close to fifty nations who enjoy hours of TV shows and movies every month. (Netflix)

Netflix is an international provider of internet streaming media that serves all of the world the service of streaming and mailed DVD and Blu-Ray. Their company works by monthly subscriptions offering the consumers different streaming, DVD/Blu-Ray packages that would fulfilled their needs. The streaming packages gives the consumer the opportunity to view unlimited TV shows, series and movies from different devices like TV, computers, IPad and cellphones with the luxury that it can be accessed everywhere as long as there is a WIFI connection. As for the DVD/Blu-Ray packages it gives the consumer the option to choose how many DVD/Blu-Ray they would like to receive per month, once they are done with watching it they would return it, without any cost or late fee, and the company will send them the next DVD/Blu-Ray on their preference list to watch. The idea of a partnership was shut down by Blockbusters CEO which would later on result in the company’s bankruptcy.

Netflix has a business strategy that is composed of three business segments: domestic streaming, international streaming, and domestic DVD (Ernst & Young LLP, 2015). The two streaming segments (i.e., domestic and international) “derive revenue from monthly membership fees for services consisting solely of streaming content,” while the domestic DVD segment derives revenues “solely of DVD-by mail,” also from monthly membership fees (Ernst & Young LLP, 2015, p. 62). A subscriber can receive either streaming service or DVD service from one monthly membership fee, but not both (Ernst & Young LLP, 2015).

Netflix started as an online based movie rental service in 1999 when it was created by founder Reed Hastings, the current CEO of the company. Hastings’ goal for the company was to be “the world’s best Internet movie service provider and to deliver a growing subscriber base and earnings per share every year” (Thompson, C-92). The company has been able to become a leader in the movie rental and streaming industry for several reasons. Netflix was an early entrant to the industry and has been able to build an extensive subscriber base due to aggressive promoting and advertising of the brand, exclusive contracts with movie suppliers, and their superior

Netflix is the world’s largest online movie rental service. We provide over 100,000 choices of DVDs to more than eight million of our subscribers. We saw how the Internet is changing the way people buy and sell goods. We saw an opportunity in the movie rental industry and decided to provide a novel product and service from the convenience of ones home. Here’s how Netflix works. First Netflix customers choose which type of monthly package they want. They then make a list of movies that they want to watch. Movies are then shipped to the customer. After the customer has viewed their movies they send the movies back and we send them the next title on their list. All with no late fees or shipping fees.

Netflix strengths include a wide brand recognition within a mass-market space. Additionally, Netflix deals directly with the association with has availability to a variety of movie content providers. This business model builds on the accessibility of Netflix already extraordinary 60,000 plus titles; the current user of Netflix exceed “57 million members in nearly 50 countries” (Netflix : Overview," n.d.). Netflix has also capitalized on the establish logistics of the US Postal System as their delivery system and kept the DVD home delivery to supplement the video streaming revenues.

Netflix’s concept is a direct result of the innovative thinking of Reed Harold, the company’s founder and CEO. Harold typically saw the potential to satisfy customers better through the use of a new distribution channel online, using the American postal service. Through this business model he “pioneered online DVD rentals” (Kaufman, 2007) pursuing a route to market that had never been taken before.

Netflix, Inc. is the world's leading DVD rent-by-mail company. The Company was created by Reed Hastings and Marc Randolph in 1997 in Scotts Valley, CA. The idea came to Hastings after he turned in Apollo 13 in late and had to pay $40 in late fees.

Netflix, an American multinational media and entertainment company, was founded by Reed Hastings in 1997. It operates as a subscription based provider that allows users to stream TV shows, movies, documentaries and other content on a wide range of internet connected devices. The company also provides DVD rental plans and DVD mailing services to cater to required demands of their subscribers. By subscribing to a plan, users are provided access to stream shows, movies, documentaries and other available content in the quality (SD, HD, Ultra HD) they pay for.

Netflix was incorporated in 1997, founded by Reed Hastings. Reed Hastings is still currently the CEO of Netflix. Bravia HDTV is a susidary of Netflix as of September 2014. Netflix competes in the online video industry. Vudu and HBO are the top competitors with Netflix.

Netflix consumer lifestyle can be people from all the different walks of life. From student, to young working adult, married couple with and without kids and even a retiree.

Netflix subscribers can select, receive, and watch/stream content unlimitable for only $8.99 a month. When you first make your account, you choose shows and movies you enjoy, which makes a ‘queue’ or list of shows/movies for you to watch in the future. To build a queue, the customer must browse a diverse set of preselected films and choose the ones they think they will enjoy or already like. By doing so, Netflix creates a ‘Movies You’ll’ link so you can access titles based on their past viewing history. After the subscriber has created a queue, Netflix then either send to them a DVD to them via the USPS, or if preferred by the subscriber, makes it available for download via a broadband Internet connection. In case they get the DVD option, the subscriber is able to keep the DVD as long as they want without a late fee before returning it using the postage pre-paid, red envelope by Netflix.

Marc Randolph and Reed Hastings founded Netflix in 1997 as an online movie rental company to fill a niche market. In 1999, Netflix established a subscription based digital distribution service that offered unlimited rentals without due dates for just a flat fee every month. By the year 2002, Netflix made its initial public offering (IPO) priced at $15 per share after Blockbuster declined a $50 million dollar acquisition offer. With the increased availability of high-speed internet to the mass market, Netflix introduced its streaming service in 2007 to test alternatives means of content distribution and test new technology. From 2010 to Present, Netflix has pushed aggressively worldwide with their digital streaming in an effort to capture global market shares. As of April 2016, Netflix reported to having over 81 million subscribers worldwide with 46 million located in the U.S.

Netflix is an online video rental service provider, which unlike traditional companies deliver DVDs by mail. It has used both resources of internet and traditional post office. The structure of the company stands on its strong system of Supply Chain Management (SCM) and its integrated part of Customer Relationship Management (CRM). Customer relationship management system reinforces and assists to maintain optimum level of inventory. As the company is online one, it is very difficult to manage the inventory. So it has developed such a SCM model, which not only helps to achieve the optimum level of inventory, but it also performs various related task like defining the shortest possible route to deliver the order and to reduce the cost by maintaining optimum inventory and hence minimizing the opportunity cost.

Netflix, Inc. is one of a number of companies that provides Internet subscription services for movies and some television shows across the globe. Subscribers are given two options for viewing: (1) Unlimited online movies and television shows that are streamed over the Internet for viewing on mobile digital devices and TVs. (2) Snail mail receipt of Blu-ray and standard definition DVDs at various levels, from a single DVD, at the lowest rated, to multiple DVDs released to the customer for viewing at home. Subscribers can have access to both viewing options for a higher monthly rate. Netflix is headquartered in Los Gatos, California, and was founded in 1997. The company has experimented with different price points, occasionally loosing droves of subscribers as a result. Movie selection is inferior to competitor iTunes with regard to selection and recency of film release in the theatres.