Netflix Inc : Marketing Analysis

The advent of Internet capable devices has given greater popularity to streaming video on demand. Arguably, the most well-known company leading this change is Netflix. We will discuss the industry that Netflix works in and the competition it faces. Not every company that attempts to stream content succeeds, but one fact remains the same: these companies are all chasing the success Netflix has found, and there are a few which may be able to successfully compete with Netflix. In addition, we will use the past five years of financial statements to forecast the next three years of growth for the company.

After receiving a ridiculously high fee for returning a movie late, Reed Hastings said that there had to be a better way to rent and watch movies and TV shows from the comfort of their own homes. Hence, in 1997 Reed Hastings and Marc Randolph, a software executive, co-found what is known today as Netflix, “the world’s leading internet subscription service for enjoying movies and TV shows,” (Netflix, Facts). The purpose of this paper is to the process of exchange between Netflix and their customers, as well as Netflix’s approach to relationship marketing and how this marketing technique has helped Netflix leave their competitors in the dust when it comes to customer satisfaction.

According to Netflix most recent SEC 10K report here is Netflix’s core strategy and marketing strategy:

Netflix is a company with reputation. It has 15 years experiences and has a good deal of loyal consumers.

Blockbuster was too confident in their brand and their reach that failed to see the threat from the online rental business, meanwhile Netflix took advantage of their slow entrance to build a market and leverage on growing technology (DVD) that took off really quickly.

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.

1. A key business goal was to reduce the cost of building the DVD library. One tactic used to achieve this goal was to stimulate demand on older and lesser-know movie titles. Shifting demand away from higher cost new releases drove down the average price of acquiring DVDs and improved asset utilization. This produced increased margins and profitability.

One weakness is customers cannot get their movies immediately; they have to wait for the mail to arrive. Delivery normally only takes 1 or 2 days, but if it’s delayed by the post office this can result in longer waits. Another

Netflix, Inc., is an entertainment industry that provides millions of customers with a streaming service to television shows and movies. “Netflix was founded in 1997 by Reed Hastings and Marc Randolph in Los Gatos, California” (Hosch). In the late 1990’s, Netflix started to offer an online subscription service through the Internet, which changed the way we viewed movies and shows. In the mid 2000’s, Netflix mailed DVDs to their subscribers, and once the customer was done watching they would mail it back to Netflix. “However, it was not until 2007, that Netflix began streaming options through the Internet. By 2012, Netflix was expanding their brand beyond the United States” (Hosch). Netflix is an innovated the way people

Netflix has specific factors that could enhance its growth or can hinder continuity of its impressive performance. Evidently, the company has strength in its branding as it is recognized in over

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.

However, on a corporate scale, Netflix dreamed to make a push into the streaming market by introducing more titles for the consumer to have easy access to. Netflix has a sustainable advantage when it came to their ability to physically distribute their titles in a new and innovative way that created superior customer service. They also have the upper hand when it comes to online streaming of content because they are the first movie distribution means that can stream directly onto your game console, computer and television. Netflix is currently positioned to make long and short-term progress in the streaming market once they gain the right to use more titles. This will add to consumer retention as well as bring in new consumers who will now have switch to movies than just the previous means of physical

Netflix Inc. is in the entertainment market, which is a part of a larger video, film entertainment industry home video entertainment market. In horizontal scale this market includes hotel, theater and airline movie entertainment markets. All of there four markets together represent the industry as itself. Movie rental and retail combined makes Netflix as one of the fastest growing company in the market. In 2015 Netflix’s market value worth $32,8 billion, which is more than CBS. The market has several segments of the its strategic groups including

The film industry sees a 32% rise at the Chinese box office in 2014. The overseas interest in film has been steadily increasing and has reached $3.55 billion in the first half of 2014. Blu-ray, electronic sell through (EST), and subscription based streaming technology has supplemented the movie and entertainment industry and are reportedly still growing according to the Digital Entertainment Group (DEG). The television industry is expanding into locker services, which allows consumers to store purchased content online to download later on multiple platforms. The radio industry had a 57% increase year over year in streaming internet radio. The Global Entertainment and Media Outlook 2014-2018, released by consulting firm PricewaterhouseCoopers, predicts music streaming revenue to reach $1.7 billion by 2018.

2b) The strategy to growing their user base included many aspects. Netflix implemented their unique business model of an easy to use system to entice movie buffs, bargain hunters, and convenience centered customers. Netflix would provide a widespread selection of videos including popular new releases, classics, rare films, documentaries and TV shows. This would ensure a larger selections than its competitors could offer. In order to ensure that Netflix had the most popular movies, they would need to build and maintain a positive relationship with entertainment video providers to include making large investments into making agreements with Universal, Twentieth Century Fox, Warner Bros, and Indie films to name a few. Netflix also cut a deal with Apple to ensure there would be a Netflix app available on iPads. Netflix also realized that ease of use and options would appeal to customers. They implemented this by creating software which would provide users with