Marketing Strategy and Business Model of Netflix : Report
Added on 2020-01-21
13 Pages5123 Words168 Views
NetFlix
Table of ContentsIntroduction......................................................................................................................................3Broad overview of Industry.........................................................................................................3Key industry performance measures...........................................................................................5Structure, competition and factors required for success..............................................................6The business model......................................................................................................................8Marketing strategy of NetFlix.....................................................................................................9The bottom line issue.................................................................................................................10Financial implications of the marketing activities.....................................................................11Conclusion.....................................................................................................................................11References......................................................................................................................................13
INTRODUCTION In the modern era, the competition among businesses operating in the service industry hasbecome so intense that it is no longer easy for companies to gain competitive advantage overother market players. Furthermore, it is required by businesses to review their business policiesand practises at regular intervals and then carry out modifications in the same as per changes inthe market trends (Nandakumar and Murray, 2014). The present research report is based onNetFlix, which is America based Entertainment Company and it was founded in the year 1997.In context of service provided, it can be stated that NetFlix, offers wide range of services whichincludes on demand videos and different types of streaming media. This study explains theoverview of industry in which NetFlix operates. Along with this, key competitors of selectedorganization and its business model is also mentioned in the present study conducted. Broad overview of Industry The industry in which NetFlix is carrying out its business practices and operations isentertainment industry as it is offering different types of fun and entertainment related services tothe people in market. It can be expressed that NetFlix is considered as one of the most renownedand largest entertainment service provider. At present the selected business enterprise is carryingout its practices and operations in more than 190 nations of the world. In terms of its members, itcan be expressed that presently it is operating with more than 86 million members and thisclearly indicates the fact that how potential the entertainment industry is (Netflix overview,2016). The entertainment industry offers services such as online TV shows, various types ofmovies and other related videos to the people in market. One of the most unique or creativeaspect of these services is that one can make use of the above mentioned services anytime theywant and every time they want (Mithas and Lucas, 2010). On the other side of this, the memberswho are making use of such services are also available with the option of playing videos, pausethe same and again replay them as per their need and requirement. This means the convenienceof member of customers is well taken care of by the entire industry and this has contributed a lotin overall growth and development. In context of the competition in entertainment industry, it can be expressed that at presentthe competition is highly intense as there are many small and big market players operating in theindustry. In markets such as United States, brands such as Amazon Prime have started giving
NetFlix very tough competition. Furthermore, at present the number of subscriber of AmazonPrime is higher than that of NetFlix and this has resulted in affecting the sales and profits ofselected business enterprise. Companies are facing issues to sustain and achieve desired profits inthe industry even in situations where the industry has huge potential. In America, Amazon Primehas around 63 million subscriber or members and the domestic member of NetFlix is only 47million. This clearly indicates the fact that even in its home market; NetFlix is facing very toughcompetition (Teece, 2010).Recently, Amazon Prime has introduced new services with the name of prime instantvideos and this has resulted in enhancing the total number of users, members or subscribers. Therationale behind increasing popularity of new services introduced is that it does not involves anykind of perks and this has resulted in developing sense of satisfaction among people in themarket (Bell and Koren, 2007). Apart from this, the money which has been charged by NetFlixfor its services is also higher than that of Amazon Prime and this is another factor which hascreated a very big difference between total numbers of subscribers of the above mentioned twobrands. It can be stated that the introduction of new services is acting as a competitive advantagefor brands like Amazon Prime (Rothaermel, 2015). Along with this, it has also supported inincreasing the overall revenue generated which will be beneficial for long run. Hulu is another key market player which is carrying out its business practices inentertainment industry and attracting customers to a great extent. The move which Hulu made isthat instead of providing free streaming services, it has started focusing upon the offering onlythose subscription which are premium in nature. This has resulted in setting apart Hulu from theother key players which are operating in the industry. In terms of online users or subscribers, itcan be asserted that the launch of service such as live TV streaming will results in increasing thetotal number of members of Hulu and will make the entire market more intense. Over the lastfew years, Hulu is able to achieve a growth rate which is higher than that of other players in themarket (Adhikari and et.al., 2012).The other players in the entertainment industry includesbusinesses such as Showtime, HBO and CBS which are also providing almost same kind of liveand online video steaming services. These market players are able to sustain in the highlycompetitive market place because the demand of such services are increasing with a very goodpace. This growing demand has emerged as a potential and very big opportunity for companiesin entertainment industry.
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