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. Its 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. From 2012 onwards, the company added a new section to its online library called "Netflix Originals". In 2016 alone, it has released an estimated 126 original films which is more than that achieved by any cable provider globally. In 2021, the company ranked #115 on the Fortune 500 list. Netflix has approximately 11,300 full-time employees located globally in 60 countries, as of early 2022. In January 2022, Netflix partnered with Design Museum in London for a new exhibit to celebrate its design journey.
Netflix’s USP lies in providing quality entertainment to its users. Netflix mission statement reads, “To entertain the world”. The vision statement reads, “To continue being one of the leading firms of the internet entertainment era”.
Netflix Revenue :
USD 29.69 billion – FY ending Dec 31st 2021
USD 24.99 billion – FY ending Dec 31st 2020
Ownership / Major shareholders :
Institutional ownership of shares of Netflix is around 84.67% as of December 2021. Its top three shareholders are:
The Vanguard Group, Inc. (7.56%), Capital Research & Management (6.57%), BlackRock Fund Advisors (4.20%).
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.
Strengths | Weaknesses |
1. World’s leading video streaming network
2. Strong focus on innovation in technology and development
3. Increasing paid membership aiding business growth
4. Big brand name with strong brand associations
5. Producing local content and distributing globally over its own global content delivery
network
| 1. Netflix’s suppliers of content are becoming its competitors
2. Cost paid for licensing new content far outruns streaming content costs
|
Opportunities | Threats |
1. The world is shifting most of the content to the world wide web 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. Tapping untapped territories where English has the benefit of being widely used as the second language
5. Acquiring top-notch companies to strengthen its portfolio
| 1. High churn and increasing competition in streaming services
2. Dependency of revenue from international business on fluctuating exchange rates
3. Price rise in subscription packs could lead to switching of customers to the competitors
4. Loss of subscribers for the first time in 10 years
|
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Detailed SWOT Analysis of Netflix
Strength
1. World’s leading video streaming network: Netflix, the World’s leading internet television network with over 222 million subscribers as of December 2021 as per company reports. 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 in turn help in delivering an exceptional customer experience.
2. 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. Need to work on content restrictions so that same films and TV shows are available in every country
2. US has restrictions on countries like Crimea, North Korea and Syria thus leaving a potential market untapped
| 1. Fluctuating exchange rate can negatively impact revenues |
Social | Technological |
1. Increasing popularity of steaming content
2. Netflix has big brand reputation and prides itself in complying to ethical business standards and morality
3. Supporting the creators in Israel by collaborating with Sam Spiegel Film
| 1. Improvement in compression techniques will improve overall quality of streaming with relatively less data
2. The New Thumbs Up/Down Rating System will help in improving personalization, making the front screen 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
3. Streaming on multiple devices should be checked as users are sharing their credentials to reduce cable bills
| 1. Initiative to reduce carbon footprints |
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Detailed Pestle Analysis of Netflix
Political
1. Need to work on content restrictions so that same films and TV shows are available in every country: Reed Hastings, CEO of Netflix on the launch of Netflix to 130 new countries revealed that they are working on removing content restrictions so that the same films and TV shows are available in every country at the same time. This is because each nation has different laws and rules regarding intellectual property and the duplication of media content, which makes it difficult to enforce copyrights and royalties. For example, Chinese digital content services currently face a difficult regulatory environment. The legal climate in China is not just challenging, it is outright hostile to Western businesses. Additionally, authorities severely restricted how video sites could operate and what foreign films and TV shows they could stream. Other countries like Nigeria, Saudi Arabia also have severe restrictions on streaming platforms which makes it difficult for Netflix to operate freely.
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
This section is available only in the 'Complete Report' on purchase.
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 |
Roald Dahl Story Company
(RDSC)
| - | 2021 | Acquisition | Through this acquisition the company will create a slate of animated series. |
Night School Studio | Gaming company | 2021 | Acquisition | Acquisition of Night School Studio will enable the company to develop games which are exclusively
designed for gamers.
|
Source: Company website and other reliable sources. The detailed table is available in the Complete Report.
On purchase the Netflix SWOT and PESTLE Analysis PDF report will reach you within minutes. At rare times, a slight delay not exceeding 4 hours might be caused.
TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
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References used in Netflix SWOT & PESTLE Analysis Report
1. Annual Report 2021- https://s22.q4cdn.com/959853165/files/doc_financials/2021/q4/da27d24b-9358-4b5c-a424-6da061d91836.pdf
2. Netflix plunges after Covid pandemic boom shudders to near-halt in Q1 FY21 - https://www.business-standard.com/article/international/netflix-plunges-after-covid-pandemic-boom-shudders-to-near-halt-in-q1-fy21-121042100109_1.html
3. Why Netflix Content Is Different Abroad - https://www.investopedia.com/articles/investing/050515/why-netflix-content-different-other-countries.asp
4. Data Compression for Large-Scale Streaming Experimentation - https://netflixtechblog.com/data-compression-for-large-scale-streaming-experimentation-c20bfab8b9ce
The detailed complete set of references are available on request in the 'Complete report' on purchase.
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