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Group I Amber Gibler, Mark Mitacek, Tucker Moore, & Katie Yaeger.

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Presentation on theme: "Group I Amber Gibler, Mark Mitacek, Tucker Moore, & Katie Yaeger."— Presentation transcript:

1 Group I Amber Gibler, Mark Mitacek, Tucker Moore, & Katie Yaeger

2 History Founded in 1997 Offers streaming in 2007 Netflix grows steadily until 2009 From 2009 to 2011 Netflix stock prices grow 600%

3 History Quixster is announced in October 2011 Netflix produces their own original series in 2012 Netflix steadily expands to new regions

4 Market Factors Online viewership of movies and TV shows is expected to increase Online streaming industry is doing well As the economy recovers, more money will be spent on recreation (e.g. movies)

5 Competitive Factors Amazon, iTunes, Hulu Plus and Google all have online streaming services Amazon has more content than Netflix Significant barriers to entry

6 SWOT StrengthsWeaknesses Brand recognition Low prices for unlimited services Large variety of content and influence on vendors Well known directors, creators working on Netflix Original series Algorithm to recommend content for users Not available in large portions of Europe and Asia Dependence on licensing content Lag between release and availability on Netflix OpportunitiesThreats Netflix Original Series are very popular and receive rave reviews Europe and Asia do not have Netflix Amazon is rapidly expanding its content Bandwidth throttling

7 Target Market Netflix doesn’t have a target market Reduced to those with internet access regularly Segmentation occurs within the service

8 Alternative 1: Additional Categories (Music & Video Games)

9 Video Games Offer music selection to be played through Netflix Mix between Sirius music on TV and Pandora on phone Similar to segmenting algorithm already in place for movies and TV shows Music Develop Netflix-exclusive video games Gamers can play each other online through Netflix Use keypad for laptop/computer and controller for existing consoles

10 Pros & Cons Pros: Continued increase in Netflix usage More offered for customers Comparable offerings to iTunes Cons: Increased expenses on creating video games New market Too cluttered?

11 Alternative 2: Netflix Premium Both Hulu Plus and Amazon Prime have seen good responses to their premium accounts Netflix reportedly discussing adding ads to their content In addition to exclusive content, Netflix Premium could also offer video with no ads and early releases of shows and movies

12 Pros & Cons Pros: Adds revenue (Amazon Prime broke even in three months) Allows Netflix to share more of their content Increases loyalty Cons: Might exclude some viewers who can’t afford it Viewers might have a negative view of Netflix for adding advertisements

13 Alternative 3: Netflix Rentals Amazon and iTunes allows local downloads of movies Useful for trips where data is not consistent enough to allow streaming Small fee for 48-hour local rentals Highest quality video available, not dependent on current data conditions

14 Pros & Cons Pros: Increases profits Adds features that customers like about competition Customers have more freedom to enjoy the Netflix service Potential for newer titles to be licensed Cons: Subject to higher piracy due to local copies of titles Must develop Digital Rights Management (DRM) to track rented titles and delete them once rentals expire

15 Stay the Course Maintain instant viewing service on multiple devices for streaming subscribers Maintain mail service for DVD rental subscribers Keep creating original content New TV shows New seasons of older TV shows

16 Stay the Course Make exclusive deals with well-known franchises and actors Stream of "Crouching Tiger" movie with theatrical release Four movies with Adam Sandler Keep complex algorithm that allows for personalized recommendations

17 Course of Action: Netflix Rentals Stay the course: Successful now, but there's still potential to grow and to retain existing customers Alternative 1: Expanded Netflix categories Could be difficult to draw market from other platforms that have those services Must think about consumer use of platforms and services

18 Course of Action: Netflix Rentals Alternative 2: Netflix Premium Information about shows and bonus content streamed there could get leaked online Content itself could get leaked online Alternative 3: Netflix rentals Would compete with existing iTunes and Amazon rental services Could increase Netflix's share of wallet for online movies Video quality could be consistent on devices

19 Questions?

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