COMPANY PROFILE -Netflix
Business Sector :Media and Entertainment
Operating Geography :North America, United States, Global
About Netflix :
Netflix is an American entertainment company that has now become a leading internet television provider. It has a vast member base of over 93.8 million members spread out across over 190 countries, with more than 50 million being in the United States alone. The Company was founded by Reed Hastings and Marc Randolph in 1997. The headquarters are located in Los Gatos, California. While it originally confined itself to streaming media and providing DVDs for sale and rent, it has now expanded into television and film production. In 2016 alone, it has released an estimated 126 original films which is more than that achieved by any cable provider globally.
Netflix Revenue :
USD 2.48 billion (2016)
Ownership / Major shareholders :
Institutional ownership of shares of Netflix stands at 82.65% which is distributed between Capital Research Global Investors (10.36%), Vanguard Group Inc. (6.50%), FMR LLC (5.62%), Blackrock Inc. (4.07%), SSgA Funds Management, INC. (3.92%).
Insider ownership is 0.15% which is held between Reed Hastings, Jay C Hoag and Neil D. Hunt.
This ownership distribution is true as of May 2018.
Competitive Analysis of Netflix
The SWOT analysis comprising of factors influencing the internal analysis and external analysis of Netflix are presented below in a matrix. The SWOT analysis report for Netflix essays the detailed strengths, weaknesses, opportunities and threats of this streaming mogul which has traversed a rich trajectory in online media space from DVDs, TV, videos and now movies. The sharp appreciation in share price and company valuation of Netflix from around $12 in Dec 2012 is an indicator of its increasing strengths and market growth strategy.
| Strengths | Weaknesses |
1. World’s Leading Video Streaming Network with presence over 190 Countries
2. Increasing paid membership aiding business growth
3. Strong focus on innovation in technology and development
4. Big brand name with strong brand associations
5. Producing Local Content, Distributing Globally over its own Global Content Delivery network known as “Open Connect”. | 1. Netflix’s suppliers of content are becoming its competitors
2. Dependency of user subscribing to Netflix services on release of famous TV shows
3. Netflix free cash flow has decreased
4. Cost paid for licensing new content far outruns streaming content costs
5. Investment in original content leads to shrinking of content library
|
| Opportunities | Threats |
1. The world is shifting most of the content to the world wide web or the internet, which spells huge opportunity for Netflix
2. Niche segments like documentaries and cinematic movies can be well tapped
3. Huge potential for earning revenue from advertisements
4. International broadband users are increasing
5. Tapping untapped territories where English has the benefit of being widely used as the second language
| 1. Increasing expenses for domestic as well as international business
2. Slump in the domestic DVD revenue
3. Escalating Technological, Development and Administrative expenses
4. Dependency of revenue from International business on fluctuating exchange rates
5. Price rise in subscription packs could lead to switching of customers to the competitors
|
On purchase, the report will reach your email inbox within minutes. At rare times, a slight delay not exceeding 4 hours might be caused.
Detailed SWOT Analysis of Netflix
Strength
1. World’s leading video streaming network: Netflix, the World’s leading internet television network with over 93 million viewers as of 2017. The company offers 7,500 HD videos which is twice as many as rival Amazon Prime. Currently Netflix service is available in over 190 countries with targeted content depending on the taste and preference of the country. Netflix’s ecosystem for internet-connected screens with increasing amounts of content that enable its consumers access to TV shows and movies directly is its major strength. The ecosystem is supported by rich technologies such as big data which help in facilitating the company’s algorithms and analytics which lends it a great competitive advantage and helps in delivering an exceptional customer experience.
2. Increasing paid membership aiding business growth: Netflix has continued to grow its streaming service both domestically and internationally. For the third quarter in 2017 there was a 33% year-on-year growth in the total global subscriber revenue with the operating income doubling year-over-year to $209 million. In 2017, unique audiences visiting the Netflix increased by 48% compared to 2016. The total paid memberships at end of Q3-FY17 stood at 104.02 million compared to 83.28 million a year ago. The company is on track to achieve $11 billion in revenue in 2017 while delivering growth across markets globally. The company further aims to achieve improvement in international profitability with growth in operating margins which will enable it to further invest in potential growth markets.
3. Strong focus on innovation in technology and development: To provide best user experience Netflix heavily invested on Network Servers, Internet connection with different ISB around the World and codex (Incredible picture quality for least MB used) and to get best user experience on both mobile and desktop/laptop platforms. The company also strongly focuses on content and availability on each screen size. In an interview with Mobile World, Netflix CEO Reed Hasting indicated that the focus of the company remains on collecting stories and sharing it around the World and not on the screen size. They want to be as flexible as possible in screen size and needed to be available on all possible screen size.
The remaining section under "Strength" is available only in the 'Complete Report' on purchase.
Weakness
This section is available only in the 'Complete Report' on purchase.
Opportunity
This section is available only in the 'Complete Report' on purchase.
Threat
This section is available only in the 'Complete Report' on purchase.
The PESTLE/PESTEL analysis essays in detail the prime factors which influence the macro-environment of the media and entertainment industry for Netflix. Significant factors or influencers that comprise of political, environmental, social, economic, technological, legal and environmental aspects impacting sustenance and growth of Netflix in the ever competitive online streaming content industry determines strategic decisions the Company must adopt to thrive and grow. It must invest in cutting edge technology to offer seamless streaming experience to a rapidly surging audience to gain competitive advantage over its rivals Amazon and Hulu Plus. Find below the competitive analysis of Netflix presented in a matrix.
| Political | Economical |
1. US has restrictions on countries like Crimea, North Korea and Syria thus leaving a potential market untapped
2. Netflix is still not present in the most populated country i.e. China due to permission issues from Chinese Government
3. Need to work on content restrictions so that same films and TV shows are available in every country
| 1. Fluctuating exchange rate can negatively impact revenues
2. Increase in personnel related cost due to increase in workforce. Apart from this third party expenses, general and administrative expenses and facility related cost hikes contributed to overall rise in expenditure.
3. Domestic streaming cost, domestic marketing expenses and other costs also increased which need to be controlled
4. Cash outflow continue to increase thus less liquidity
|
| Social | Technological |
1. Netflix has big brand reputation and prides itself in complying to ethical business standards and morality
2. Netflix is known for giving away student scholarships and charities to aid financially challenged students
3. Reed Hastings (the CEO) has set an example by giving a large sum of his personal funds to the Giving Pledge Charity
| 1. Improvement in compression techniques will improve overall quality of streaming with relatively less data
2. The focus is not only on video streaming quality but also on improving experience in convenient payment and delivery processes
3. The New Thumbs Up/Down Rating System will help in improving personalization, making the front screen on Netflix even more relevant to the users
|
| Legal | Environmental |
1. Need to fight battles against Geoblocks and copyright infringements
2. Video piracy is the reason of huge loss to the streaming and cinema industry thus punishments to the offenders should be severe
3. Streaming on multiple devices should be checked as users are sharing their credentials to reduce cable bills
| 1. Using wind power to offset its energy for cloud storage is a new initiative to reduce its carbon footprints |
On purchase, the report will reach your email inbox within minutes. At rare times, a slight delay not exceeding 4 hours might be caused.
Detailed Pestle Analysis of Netflix
Political
1. US has restrictions on countries like Crimea, North Korea and Syria thus leaving a potential market untapped: Netflix has made it clear that it won’t be available in Crimea, North Korea and Syria due to U.S. government restrictions on American companies
2. Netflix is still not present in the most populated country i.e. China due to permission issues from Chinese Government: China which is the most populated country in the world is still untapped by Netflix as it needs to get permission from their government, which has stringent rules when it comes to online censorship.
The remaining section under "Political" is available only in the 'Complete Report' on purchase.
Economic
This section is available only in the Complete report on purchase.
Social
This section is available only in the 'Complete Report' on purchase.
Technological
This section is available only in the 'Complete Report' on purchase.
Legal
1. Need to fight battles against Geoblocks and copyright infringements: Law is unclear on whether getting around Geoblocks to access restricted content actually constitutes copyright infringement. Netflix should try to be more proactive about blocking VPNs. Also many countries have much smaller content libraries than what is available to viewers in the U.S., due to licensing arrangements. Thus it’s important for Netflix to either remove content restrictions or take some measures to block VPN to prevent unauthorized access to streaming.
2. Video piracy is the reason of huge loss to the streaming and cinema industry thus punishments to the offenders should be severe: Video piracy costs billions of dollars every year and is a major concern for streaming and cinema industry. Thus stricter regulations on a global scale are required and punishment of copyright infringement should be severe.
3. Streaming on multiple devices should be checked as users are sharing their credentials to reduce cable bills: Netflix offer customers subscriptions that can stream on multiple devices at a time. Although the intent was to make it easier to go from one room to the next and continue watching a show, some customers have taken advantage of the multiple device options by sharing login information with friends and family at different locations thus reducing subscription revenue. Recently laws are made to curb this situation.
Environmental
This section is available only in the 'Complete Report' on purchase.
Major Competitors :
- Amazon Prime
- Hulu
- YouTube
- Directv
- Sony Vue
- HBO Now
- Best Buy Co. Inc.
- Cinedigm Corp.
- Conn’s, Inc.
- iQIYI, Inc.
- Trans World Entertainment Corp.
- Walt Disney
- Sirius XM Holdings INC
- Blockbuster
- Redbox
Major Brands :
Netflix original films (drama, comedy, special, documentary, feature and short, eg. Beasts of No Nation, Okja, My Happy Family, Divines, Mudbound, On Body and Soul etc.)
Netflix original TV series ( eg. House of Cards, Bloodline, Orange Is the New Black, The Crown, Narcos etc.)
Key Business Segments / Diversification :
Netflix
Media and Entertainment Online streaming service
Recent Acquisition / Mergers / Alliance / Joint Ventures / Divestitures :
Open Table Preview
| Name | Business Segment | Year | Type | Objective/Synergy Achieved |
| Millarworld | Comic Book publisher | 2017 | Acquisition | In its endeavor to produce original content they have acquired Millarworld a comic book publisher so that they have access to more content. It is said the deal was brokered somewhere between $50 - $100 million. This is their first acquisition. |
| Univision | Television Network | 2016 | Partnership | They partnered with Univision to broadcast the first season of their original show “Narcos” to test whether airing old seasons on traditional TV can lure people to sign up for their service ahead of the next season. |
Source: Company website and other reliable sources. The detailed table is available in the Complete Report.
On purchase, the report will reach your email inbox within minutes. At rare times, a slight delay not exceeding 4 hours might be caused.
TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
You may also be interested in other analyses of Netflix:
-
| Netflix Porter's Five Forces Analysis |
|
-
-
| Netflix Value Chain Analysis |
|
Request for Quotation
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Get The Free Sample
Company Overview Report
This report is shared in order to give you an idea of what the complete Company Overview Report will cover after purchase. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing.
Get this report delivered straight into your email inbox for free.
You also agree to receive email updates from us on our new reports and solutions.
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Request for Quotation
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Get The Free Sample
Competitor Analysis Report
This report is shared in order to give you an idea of what the complete Competitor Analysis Report will cover after purchase. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing.
Get this report delivered straight into your email inbox for free.
You also agree to receive email updates from us on our new reports and solutions.
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Request for Quotation
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Get The Free Sample
Porter's Five Forces Analysis Report
This report is shared in order to give you an idea of what the complete Porter's Five Forces Analysis Report will cover after purchase. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing.
Get this report delivered straight into your email inbox for free.
You also agree to receive email updates from us on our new reports and solutions.
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Request for Quotation
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Get The Free Sample
VRIO Analysis Report
This report is shared in order to give you an idea of what the complete VRIO Analysis Report will cover after purchase. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing.
Get this report delivered straight into your email inbox for free.
You also agree to receive email updates from us on our new reports and solutions.
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Request for Quotation
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Get The Free Sample
Value Chain Analysis Report
This report is shared in order to give you an idea of what the complete Value Chain Analysis Report will cover after purchase. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing.
Get this report delivered straight into your email inbox for free.
You also agree to receive email updates from us on our new reports and solutions.
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Request for Quotation
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Get The Free Sample
Regulatory Outlook Report
This report is shared in order to give you an idea of what the complete Regulatory Outlook Report will cover after purchase. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing.
Get this report delivered straight into your email inbox for free.
You also agree to receive email updates from us on our new reports and solutions.
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Request for Quotation
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Get The Free Sample
Risk Analysis Report
This report is shared in order to give you an idea of what the complete Risk Analysis Report will cover after purchase. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing.
Get this report delivered straight into your email inbox for free.
You also agree to receive email updates from us on our new reports and solutions.
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Request for Quotation
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Get The Free Sample
Key Performance Indicators (KPI's) Report
This report is shared in order to give you an idea of what the complete Key Performance Indicators (KPI's) Report will cover after purchase. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing.
Get this report delivered straight into your email inbox for free.
You also agree to receive email updates from us on our new reports and solutions.
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Request for Quotation
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Get The Free Sample
Environmental, Social, and Governance (ESG) Analysis Report
This report is shared in order to give you an idea of what the complete Environmental, Social, and Governance (ESG) Analysis Report will cover after purchase. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing.
Get this report delivered straight into your email inbox for free.
You also agree to receive email updates from us on our new reports and solutions.
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Request for Quotation
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Get The Free Sample
M&A Analysis Report
This report is shared in order to give you an idea of what the complete M&A Report and Analysis Report will cover after purchase. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing.
Get this report delivered straight into your email inbox for free.
You also agree to receive email updates from us on our new reports and solutions.
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Request for Quotation
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Get The Free Sample
Subsidiaries, Partnerships and Collaborations Report
This report is shared in order to give you an idea of what the complete Subsidiaries, Partnerships and Collaborations Report will cover after purchase. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing.
Get this report delivered straight into your email inbox for free.
You also agree to receive email updates from us on our new reports and solutions.
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Request for Quotation
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Get The Free Sample
Stakeholder Analysis Report
This report is shared in order to give you an idea of what the complete Stakeholder Analysis Report will cover after purchase. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing.
Get this report delivered straight into your email inbox for free.
You also agree to receive email updates from us on our new reports and solutions.
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Request for Quotation
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Get The Free Sample
Technology Landscape and Outlook Report
This report is shared in order to give you an idea of what the complete Technology Landscape and Outlook Report will cover after purchase. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing.
Get this report delivered straight into your email inbox for free.
You also agree to receive email updates from us on our new reports and solutions.
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Request for Quotation
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Get The Free Sample
Covid-19 Impact Analysis Report
This report is shared in order to give you an idea of what the complete Covid-19 Impact Analysis Report will cover after purchase. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing.
Get this report delivered straight into your email inbox for free.
You also agree to receive email updates from us on our new reports and solutions.
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Request for Quotation
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Get The Free Sample
Key News and Events Report
This report is shared in order to give you an idea of what the complete Key News and Events Report will cover after purchase. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing.
Get this report delivered straight into your email inbox for free.
You also agree to receive email updates from us on our new reports and solutions.
We do not share your information with anyone. However, we may send you emails on our new reports and solutions.
Check Out Analysis of Other Relevant Companies
References used in Netflix SWOT & PESTLE Analysis Report
1. Annual Report 2018- https://produkte.erstegroup.com/modules/res/PdfRenderer.php?f=US64110L1061-2018-01-27.pdf&u=%2Fmodules%2Fres%2Fcompany_profile%2Fdownload.php%3FLANG%3Den%26MARKET%3Dat%26ISIN%3DUS64110L1061
2. Revenue- https://www.cnbc.com/2018/07/16/netflix-q2-2018-earnings.html
3. Most Innovative Companies- https://www.fastcompany.com/company/netflix
How to Reference This Page?
You can use the following in your reference section in order to give credit to the source. For different referencing styles and detailed guidelines, please click here.
Netflix SWOT & PESTLE Analysis - SWOT & PESTLE.COM
SWOT & PESTLE.com (2021). Netflix SWOT & PESTLE Analysis - SWOT & PESTLE.com. [online] Available at: https://www.swotandpestle.com/netflix/ [Accessed 03 Aug, 2021].
In-text: (SWOT & PESTLE.com, 2021)
Copyrights and Disclaimer
Netflix SWOT and PESTLE analysis has been conducted by Shubham Sharma and reviewed by senior analysts from Barakaat Consulting.
Copyright of Netflix SWOT and PESTLE Analysis is the property of Barakaat Consulting. Please refer to the Terms and Conditions and Disclaimer for usage guidelines.
Safe and secure payments
