NETFLIX: CONNECT AND CONSUME PDF Free Download
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Company Snapshot
❖Streaming entertainment service company
❖Provides movies and TV shows
➢Separate service for DVDs by mail
❖Market Cap: $274.94B (No.1 in entertainment industry)
❖2020 revenue rose 24.0% to $25.0 billion
➢Net income rose from 47.9% to $2.8 billion
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Challenges
❖Saturated market
➢Most people already signed up
➢Hard to get new customers
➢Slowdown of growth
❖Competition
➢Amazon Prime Video
■Bundle service with Amazon Prime
■Larger customer base across retail,
music, and video streaming…
➢HBO Max & Disney+
■Bundle service between Disney &
WarnerMedia
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01
5Cs
➢Customer
Individuals highly reliant on technology, price-sensitive,
appreciate convenient and easy access
➢Competition
Compete in both video service industry and other sources of
entertainment
➢Company
Online subscription service streaming TV shows and movies
➢Context
Developing service offerings that cater to changing customer
needs
➢Collaborator
Google Chrome(2020) - introduced Netflix Party, a new feature to
allow a group of friends to view content together at the same
time.
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01
❖Ever growing domestic and international Pop Culture
Customer base (appendix).
❖Individual consumers, they are small and plentiful with
little financial muscle, weakening buyer power.
❖Mostly millennials:
➢highly reliant on digital technology
➢Attracted convenient and up-to-date service
➢Have lower disposable income than older
population
➢More price-sensitive
➢More active on social media
Customer
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01
Video Services Industry Competitors:
❖Amazon Prime Video
➢Estimated 142 million members, Large
customer base majority from prime
membership
➢Acquired MGM studios, signed
exclusive rights to Thursday Night
Football
Competitors
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❖HBO MAX
➢Warner Media’s most recent
blockbuster movie Dune was
released to theaters and on its HBO
Max platform.
➢Strategy of Investing heavily in the
streaming platform at the expense
of potential box office revenue.
Other Entertainment Competitors:
Books, Audio, Podcasting, Music, Video Game
❖Disney+ & Hulu
➢Tagline “Hulu has live sports.”
01
Netflix is an online subscription service streaming TV
shows and movies.
The company's major services include the following:
1. Rental of DVDs
2. Online streaming of movies
3. Online Streaming of TV shows
Netflix’s streaming segment drives revenue from
membership fees for monthly subscription services.
Company
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01
❖Technology is changing rapidly, Netflix should continually be adapting to new industry
standards and introducing new products that meet and exceed the customers’ requirements. In
Fiscal Year 2019, the company incurred expenses of US$1,673 million on R&D efforts
(Marketline, 2021).
❖There is a growth in personal income, disposable personal income and personal consumption
expenditures which indicate improvement in consumer spending in the US, which could
increase the purchase of Netflix’s products.
❖In a post-vaccine landscape with reopened movie theaters, movies are again launching in
theaters but at the same time the theater window is shortening which means those movies can
be placed onto a streaming platform quickly.
Context
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Collaborator
Google Chrome: In March 2020 introduced Netflix Party, a new
feature to allow a group of friends to view content together at
the same time.
BBC: The BBC and Netflix have announced a partnership to
develop and fund new, ambitious dramas featuring disabled
creatives both in front of and behind the camera.
Walmart: Teamed up with Netflix to create a digital storefront
on the retailer’s website that will sell merchandise tied to hit
shows such as Stranger Things and Squid Game.
Microsoft: Created new data science learning modules that
guide learners through beginning concepts in data science,
machine learning and artificial intelligence.
Starbucks: Partnered with Netflix for the Netflix Book Club
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Source: Marketline, Mintel
Segmentation
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Offering a differentiated product to these corresponding segments based on their individual
interest. Mainly focus on behavioral segmentation to understand preferences and build
connections.
Implementation
Demographic
Offering variety of
programs for young
adults; bringing out
hit-worthy content for
them
Behavioral
Using machine
learning to create
personalized
customer needs
Geographic
Making localization
content to build
connections and
offer ads to target
Psychologic
Appealing to groups
that want to relax
after work, studying,
or have plenty
leisure time
Offers a more
personalized customer
experience
Based on tags and
connections, users are
divided into
micro-genres,micro-com
munities and then
matched up to engage
with each other
Relies on Machine
Learning to learn about
customers
Store information into
groups based on their
action and preference
STEP 1
STEP 2
STEP 3
STEP 4
Behavior Segmentation
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Targeting
70%
Gen Z
The largest Netflix
subscribers with a
paid subscription
No.1
The dominant
steaming service
favourite by young
customers
6.6hours
Millennials
Spend a crazy of time
watching Netflix with
6.6 hours a day
Netflix mainly is targeting the youth segment of viewers, the Millennials and Gen Z-er.
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Positioning
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Accessibility Engagement
Simple interface and
multi-screen availability
make everyone can enjoy
anywhere, anytime on
Netflix with others
More interaction on Netflix,
with people being more
engrossed and thus more
likely to repurchase a Netflix
subscription
Micro-Distance
Using videos to close the
distance between friends,
being together online to
share happiness
Positioning
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Statement: Netflix is the best streaming service for the
young generation because everything is accessible and
convenient to use and makes you feel engrossed in a
personalized experience but continues to evolve to
build connections with other users in ways other
streaming services can’t.
Connecting with Friends
Inserting a social media aspect onto Netflix, where a user can connect with friends,
watch content with friends and communicate with them while watching content.
Functionality:
❖Friend Request system in order to add friends
❖User can see what a friend is watching at the moment, in detail
❖User can request to join in and watch alongside friend
❖Chat system for communication
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Connecting with Friends
Why have the option to connect with friends and watch with them?
There exists a third-party extension, called Netflix Party, which does most of the
functionality stated. However, this extension only exists on Google Chrome, thus
already alienating other browsers (Firefox, Safari) and mobile users. It has over 10
million users JUST on Chrome.
If this extension was just included within Netflix, there would be much more
engagement and allow for user retention due to ease of access from all sources. It
would be an enhancement of the current Netflix. If the feature keeps one in a
thousand members from leaving, it could improve the monthly cancel rate from 2.0%
to 1.9%.
Biddle 2020; Bissett 2020; Google, 2021
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Live Commentary - “Bullet Curtain”
“Bullet curtain” can give the audience a "real-time interaction" illusion. Although
different comments are sent at different times, it will only appear at a set time in the
video, so that the comments in the same theme will gather together and form a live
commentary illusion.
How it works:
❖Tap the speaker button to enable live commentary
❖Ability to disable or enable option to view live commentary
❖Comments from other random users who use Netflix will pop up on screen at
the set time and as the media progresses
Shen 2018
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Live Commentary - “Bullet Curtain”
Why Bullet Curtain?
Japan and China already have this system inputted into most of their streaming
services with great success.
Nico Nico for Japan and Bilibili for China are two of the biggest streaming services
that use this tactic. Nico Nico is the 10th most visited website in Japan and BiliBili
has over 90 million visitors to its site each month.
Netflix would be the first Western site to utilize this feature and allow users to
interact with each other on a greater basis.
Gao 2015; Shen 2018; Zhang 2020
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Sharing Clips
Sharing clips from Netflix gives the opportunity for indirect and free promotion. Even
though Netflix already has a share button, the share button only shares the show or
movie information.
This addition to sharing would allow users to share clips from Netflix shows or films
to other social media platforms. These clips would be maximum 1 minute.
Before the clip is sent, there would be a message saying indicating it is from Netflix.
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Sharing Clips
The average amount of time on social media for the average user was 145 minutes
in 2020.
Most Generation Z and Millennial users of social media report spending between 3-5
hours on social media everyday.
When a clip from Netflix is shared by a user to their friends or community on social
media, it might pique interest in outside users who do not have a Netflix subscription.
This might encourage them to purchase a Netflix subscription to see the rest of the
clip.
Herman 2021; SproutSocial 2021
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Friends
Friends
Friend Activity
Will Vo
Sherraina Song
Helen Hsu
Tara Zhang
Squid Game S1E2 - Hell
Sex Education S2E3 - Episode 3
Cowboy Bebop S1E1 - Cowboy Gospel
Naruto S8E9 - The Third Super-Beast!
- now
- now
- now
- 2h ago
Friends
Friend Activity
Friends
Friend Activity
Will Vo
Sherraina Song
Helen Hsu
Tara Zhang
Squid Game S1E2 - Hell
Sex Education S2E3 - Episode 3
Cowboy Bebop S1E1 - Cowboy Gospel
Naruto S8E9 - The Third Super-Beast!
- now
- now
- now
- 2h ago
Friends
FriendsFriends
Friend Activity
Will Vo
Sherraina Song
Helen Hsu
Tara Zhang
Squid Game S1E2 - Hell
Sex Education S2E3 - Episode 3
Cowboy Bebop S1E1 - Cowboy Gospel
Naruto S8E9 - The Third Super-Beast!
- now
- now
- now
- 2h ago
Request to join Sherraina Song watching
Squid Game S1E2 - Hell?
YesNo
Friends
Friend Activity
Will Vo
Sherraina Song
Helen Hsu
Tara Zhang
Squid Game S1E2 - Hell
Sex Education S2E3 - Episode 3
Cowboy Bebop S1E1 - Cowboy Gospel
Naruto S8E9 - The Third Super-Beast!
- in a watch party
- now
- now
- 2h ago
Type here
I love this show!! Cop dude is
so attractive
I would rather watch anime...
Helen Hsu is typing…
He is so fine…
^^^
When do people start dying?
POGG
🤪🤪🤪🤪
Background song???
Appendix
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Consumer:https://reports-mintel-com.proxy.library.emory.edu/display/1111675/?fromSearch=%3Ffreetext%3Dentertainment%2520competitor&
highlight#hit1
Competitor:https://reports-mintel-com.proxy.library.emory.edu/display/1111657/?fromSearch=%3Ffreetext%3Dentertainment%2520competitor
#atom1
Context: https://advantage-marketline-com.proxy.library.emory.edu/Company/Profile/netflix-inc?swot
https://reports-mintel-com.proxy.library.emory.edu/display/1048287/?fromSearch=%3Ffreetext%3Dentertainment%2520competitor&highlight#
hit1
BBC:https://advantage-marketline-com.proxy.library.emory.edu/News/bbc-and-netflix-form-partnership-to-develop-and-co-produce-shows-from
-disabled-creatives
Walmart:https://advantage-marketline-com.proxy.library.emory.edu/News/netflix-forms-merchandise-partnership-with-walmart
Google: https://www.jpost.com/International/Netflix-rolls-out-new-service-for-remote-group-viewing-amid-coronavirus-621842
Microsoft: https://advantage-marketline-com.proxy.library.emory.edu/News/microsoft-partners-with-netflix-machine-learning-modules
Starbucks:https://reports-mintel-com.proxy.library.emory.edu/display/1111659/?fromSearch=%3Ffreetext%3Dentertainment%2520competitor
&highlight#hit1
https://gibsonbiddle.medium.com/why-wont-netflix-party-fb932399c2
https://chrome.google.com/webstore/detail/netflix-party-is-now-tele/oocalimimngaihdkbihfgmpkcpnmlaoa?hl=en
https://www.cnet.com/tech/services-and-software/netflix-party-is-a-good-idea-but-doesnt-always-work-in-real-life/
Appendix (cont.)
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https://link.springer.com/chapter/10.1007/978-3-319-20907-4_14
https://journals.sagepub.com/doi/10.1177/1461445620940051
https://www.goldthread2.com/culture/crazy-way-people-watch-videos-china-whole-subculture-its-own/article/2157123
https://sproutsocial.com/insights/guides/social-media-use-by-generation/
https://nrf.com/blog/how-gen-z-driving-future-retail
https://www.emarketer.com/content/us-media-entertainment-digital-ad-spend-sees-major-gains
https://www.cnbc.com/2018/01/23/netflix-2018-marketing-budget-to-hit-2-billion.html
https://clutch.co/app-developers/resources/cost-build-mobile-app-survey
https://studiousguy.com/business-model-of-netflix/#2_Customer_Segments
https://www.ypulse.com/article/2021/01/25/the-ranking-of-gen-z-millennials-favorite-video-streaming-services-is-full-of-surprises/
https://financesonline.com/number-of-netflix-subscribers/
https://www.cinemablend.com/television/2481305/millennials-spend-a-crazy-amount-of-time-watching-netflix-according-to-report
https://globalbrandworks.com/obs/brand-positioning-and-the-successful-digital-transformation-of-netflix/
Consumer (Appendix)
