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Outline. Introduction /Commercial SWOT Competitors Five factors strategies Financing Recommendation Conclusion. Introduction and History. Founded in 1997 by Reed Hastings and Marc Randolph The story of Netflix Home Office Location: Los Gatos, California

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Outline

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  1. Outline • Introduction /Commercial • SWOT • Competitors • Five factors strategies • Financing • Recommendation • Conclusion

  2. Introduction and History • Founded in 1997 by Reed Hastings and Marc Randolph • The story of Netflix • Home Office Location: Los Gatos, California • 900 employees at corporate headquarter

  3. Introduction and History cont’ • Company description: Netflix, Inc. is a popular subscription service and one of leading services in providing TV shows and movies instantly through Internet streaming. • The early year • Provides service in 41 countries • Over 40 million members are enjoying more than one billion hours of TV shows and movies per month, including original series. http://www.youtube.com/watch?v=SnMnjw14OGc

  4. Commercial • http://www.youtube.com/watch?v=xcpWN--p5k0

  5. Strengths • Big Customer scale • Clearest brand identity • Low cost product • Good brand value. • Lots of selections attracts customers • Easy navigation on the website

  6. Weaknesses • Lack of streaming content • Long time until new movie release • Reliance on studio agreements to secure content

  7. Opportunities • Growing demand for online video streaming • Growing demand for video game rentals • Planning on releasing original shows • International Expansion

  8. Threats • Technology is ever changing and Netflix must consistently improve method of delivery. • Competitors • Companies offer video-game rental • Suppliers shifting to competition

  9. Competition • Blockbuster, Redbox, Apple, Hulu, etc

  10. Five Factors Analysis

  11. Internal Rivalry (low) • Competition is split into 2 buckets • Existing Pay-TV distributors • Cash Rich Tech Companies For Example – Apple’s Cash Balance is 20x Netflix’s Projected 2011 Sales - Good First Mover Advantage, but TV distributors and Tech companies have a better position to license quality content over a longer horizon

  12. Barriers to Entry (Moderate) • Capital Requirements, content costs money • Economic moat around streaming business for new entrants • Relatively low barrier for existing competitors with enough money • Brand Identity: No longer the best • Loyalty is weak, many unsubscribed

  13. Threat of Substitute products (High) • Many Competitors from all sides of business • Apple TV, Amazon on Demand, Blockbuster on Demand, Cablevision, Verizon, DirecTV • Comcast and Dish Network are overlooked substitutes • Work closer with content owners to offer better Video On Demand experience for customers

  14. The Bargaining Power of Suppliers (High) • Content is a Key Input in Netflix Business • Suppliers = Content Owners (Time Warner, CBS) • Limited number of Suppliers have High Quality Content • There is no substitute for High Quality Content • At the mercy of their licensing deals

  15. Bargaining Power of Buyers (Moderate) • Netflix Revenue is majority customer sales based • Customers not as loyal as before • Better and cheaper ways to watch movies and TV

  16. Financial Analysis

  17. Financial Analysis

  18. Financial Analysis

  19. Recommendations/Conclusion • International Expanding • Develop the program of radio-game • Cooperate with other big companies like: Apple, Google, Microsoft • Promote on game platform like Xbox360, Play Station, Wii by Nintendo. • http://www.youtube.com/watch?v=P6B2tKMg3B8

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