Management presentation by:Janine Guy

Richard ScottLogan TannerBen Wilson

Samaiyah Wilson

Netflix History

• Founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley California

• Idea was inspired by late fees• Started with 30 employees and 925 movie titles• First of its kind

Netflix History

• Original flat rate in 1999 was $15.95 per month for 4 disks• Price raised to $19.95 for 4 disks

• Advertising started in 2000• 2002 Netflix stock NFLX goes public for $15.00 a share• Netflix started streaming services in 2007

About Netflix

• 20 million subscribers Up 63% from 2009

• 4,329 Employees 2,180 Full-time 2,149 Part-time

• Over 700 devices capable of streaming Netflix content• Recently started services outside of the United States

Core Strategy

“To Grow our streaming subscription business within the United States and globally. We are continuously improving

the customer experience, with a focus on expanding our streaming content, enhancing our user interfaces and

extending our streaming service to earn even more internet-connected devices, while staying within the parameters of

our operating margin targets.”

SWOT

Strong Brand IdentityLow Prices

Unlimited StreamingNo Late Fee

Subscriber Base

International DemandDemand for Instant Access

Video GamesNew Releases

Dependent on SuppliersLimited on Content

Heavy Reliance on AWS28 Day WindowNo Video Games

CompetitorsChange in demand

Postal Prices

Strengths

Opportunities

Weaknesses Threats

Strengths• Strong Brand Identity

First in the industry with strong reputation with customers

• Low Prices Set price, lowest in the market

• Unlimited Streaming Can stream as many movies as long desired without added cost

• No Late Fee Keep a movie as long as a customer wants with no fees added.

• Subscriber Base Constant growing subscriber base

Weaknesses• Dependent on Suppliers

Netflix depends on the USPS to have all DVDs delivered to customers on time

• Limited on Content Can only get DVD and streaming content that movie suppliers

are willing to give to Netflix

• Heavy Reliance on AWS Most of Netflix’s computing software and servers are run by

Amazon Web Services

• 28 Day Window Netflix must wait at on average 28 days before they can ship a

newly released movie on DVD.

• No Video Games No option to rent video games by mail

Opportunities• International Demand

Streaming in Europe By mail in less developed Nations

• Demand for Instant Access Live events- sports, red carpet events.

• Video Games By mail

• New Releases Customers want to rent as soon as a movie is on DVD

Threats

• Competitors Hulu (streaming) Blockbuster (DVDs) Red Box (DVDs) Gamefly (potential video game)

• Change in demand from disks to streaming Popularity of DVDs rapidly decreasing

• Increase in Postal Service prices

Strong Brand IdentityLow Prices

Unlimited StreamingMany Streaming Devices

No Late FeeSubscriber Base

International DemandDemand for Instant Access

Video GamesNew Releases

Dependent on SuppliersLimited on Content

Heavy Reliance on AWS28 Day WindowNo Video Games

CompetitorsChange in demand

Postal Prices

SWOT AnalysisStrengths

Opportunities

Weaknesses Threats

Leverages

• Advantage of many devices to stream• Provides streaming instantly• Strong brand recognition will help grow internationally

Vulnerabilities

• Uprising Competition• The Sales of Video Games• To Figure Out New Streaming Outlets• Delay of new release

Constraints

• The demand for video games Netflix’s does not currently offer this

• The 28 day window Netflix subscribers cannot view “new releases”

Problems

• Dependency on USPS prices Could cause subscription fees to increase

• Competitors offer video games A service that Netflix doesn't’t

• Limited by content from suppliers Some suppliers are also competitors

• Other companies don’t have 28 day rule on new releases

Recent Changes

• Post 2010 Netflix’s changes Separated services - raising prices Dropped Starz as a provider Added DreamWorks Had large losses in NFLX Value 800,000 subscribers lost

Recommendations

• Adjust price for bundled services• Add video games• Adding live TV streaming• Merge with larger company

The End

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