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Netflix SWOT & PESTLE Analysis

ID : 52229453| Sep 2020| 13 pages


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.

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
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
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Detailed SWOT Analysis of Netflix



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.


This section is available only in the 'Complete Report' on purchase.


This section is available only in the 'Complete Report' on purchase.


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 :

Media and Entertainment Online streaming service

Recent Acquisition / Mergers / Alliance / Joint Ventures / Divestitures :

Open Table Preview
Business Segment
Objective/Synergy Achieved
MillarworldComic Book publisher2017AcquisitionIn 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.
UnivisionTelevision Network2016PartnershipThey 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.
SWOT & PESTLE (combined)
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Check Out Analysis of Other Relevant Companies

References used in Netflix Analysis Report

1. Annual Report 2018-

2. Revenue-

3. Most Innovative Companies-

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Netflix SWOT & PESTLE Analysis - SWOT & PESTLE.COM

SWOT & (2021). Netflix SWOT & PESTLE Analysis - SWOT & [online] Available at: [Accessed 18 Apr, 2021].

In-text: (SWOT &, 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.

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