Business Case Study

María Soledad Jacobson

Media Economics Course – First Semester 2013University of Miami

About the Company

Is an American provider of demand Internet streaming media available to both North and South America, the Caribbean, United Kindom, Ireland, Sweeden, Denmark and Norway

• 33 millon subscripted members

• More than 1 billion of hours of tv shows and series per

month

• Present in 40 different countries

• 2,348 employees

• 3.761.770 likes

• More than 50.000 followers

About the Company

Company Timeline

Founded by Marc Randolph and Reed Hasting in

California

Launched in UK and Ireland. Months

after, announcement they reached 1 M

member milestone

1997 1998 20122000 2001

Beggins offering DVD rental and sales

Revenue sharing deals signed with Warner Brothers

and Columbia film studios

A partnership with Best Buy gives

exposure in the chain’s 1,800 stores

2003

1 Million subscribers

Launched in Canada (first expansion into

international markets)

20102007

Introduction to Video streaming

devices

2011

A new company called Qwister would handle

the phsyical DVD rentals, while Netflix the streaming (Failed)

Business ModelSubscription for Streaming (Business to Consumers)

Fee of $7.99 a month

• Unlimited movies and TV episodes

• No advertising

• Streaming over the Internet, via PSI, Wii, Xbox, Apple TV and computer too

• Also smartphones and tablets (Apple devices, get free the app and sign in)

Business ModelSubscription DVD Rental (Business to Consumers)

Two different plans

Unlimited Limited

Business ModelPartnership (Business to Business)

• Five year-deal ($1 BILLION) with Paramount, Lionsgate and MGM to stream movies.-2010

• Pay TV-rights to film from DreamWorks Animation. The price wasn’t announce. -2013

Business Model

Jan 22- 97,81 USD per share

Competition Direct:

Indirect:

Personal viewSWOT Analysis

Strengths

Lower fixed cost High customer satisfaction Fast processing and ordering Online streaming Serves a large geographic area Own content (House of Cards)

Weakness

Small collection of instant plays Difficult inventory control Competitors access to the same

content.

Opportunities

Branding Continue Developing own content International expansion Kids audience (partnership with

DreamWorks)

Threats Competitors (Hulu, Youtube) New competitors in streaming

business Price adjustments to cover new

expenses Piracy

Personal viewBusiness Life Cycle

References• http://www.fundinguniverse.com/company-histories/netflix-inc-history/

• http://www.huffingtonpost.com/2013/02/14/netflix-house-of-cards_n_2686566.html#slide=more245366

• http://www.ibtimes.com/netflix-monthly-price-increasing-60-percent-297981

• http://www.businessweek.com/articles/2013-02-13/with-a-3d-animated-series-netflix-aims-for-kids

• http://www.nydailynews.com/entertainment/tv-movies/netflix-won-viewers-house-cards-article-1.1263414?localLinksEnabled=false

• https://dvd.netflix.com/SubscriptionAdd?preselect=1u

• http://movies.netflix.com/WiHome

• http://www.reuters.com/finance/stocks/companyProfile?rpc=66&symbol=NFLX.O

Thank you for your attention