Netflix & Chill…
Netflix, Inc. is an Internet subscription service that was founded in 1997. Netflix initial business model included DVD sales and rentals, which is now one of its sub brands on the decline stage of the product life cycle and eventually slowly being phased out of the business plan. Netflix provides its users with a subscription service to stream movies and television episodes over the Internet. The company operates its business through domestic and international streaming in over 190 countries, and Domestic DVD’s and Blu-ray. Netflix personality is formerly branded as a watch now service, they have expended into developing and creating original content ranging from movies to television series also known as “Netflix Originals”. Along with its own production distribution Netflix also has content from various studios and other content providers through fixed-fee licenses, revenue sharing agreements and direct purchases. It markets its service through various channels, including broad-based media such as television and radio online, advertising, and various partnerships. Netflix has made its service so it is personally based to deliver and recommend content based on what you have watched before. This design was made to make it convenient and easier for the viewer to use.
Netflix is an intangible product although they do have tangible branded products such as DVD’s and Blur-rays. Netflix appears to be in the maturity stage with their streaming media and film and television production in the product life cycle. Netflix has low fixed costs that are covered by revenue, and they have developed a strong relation with its consumers. This brand has continued to evolve and reinvent itself. They leverage other offerings services that will help with the growth and lead the way to be more innovation and up to date. This included the creation of original content and downloadable content to stream offline. Netflix continues to push boundaries by creating its own media content as it continues to expand its offering in various markets outside of North America. On the other hand Netflix tangible products are on decline stage, as this no longer provides convenience for majority of people. Netflix fulfills the need for a consumer to stream as many TV shows, movies, original series, documentaries and feature films, as they desire. Consumers have the ability to watch content anywhere, on nearly any Internet-connected screen. Netflix members can play, pause, resume, rewind, and fast forward watching, all without commercials or commitments. Netflix provides its user with the number one most important aspect, convenience. Netflix common goal with its consumers is to provide them with an excellent variety of content, convenience all at a low cost entertainment value. They have made their platform accessible on any personal and electronic downloadable device around the world. Netflix has changed its strategy and rather spending money on advertising it instead is creating original content that is appealing to its subscriber base. The success of its original content series include Orange is the New Black, House of Cards, Dare Devil and over 126 other original series and films. Netflix also maintains viewer membership loyalty by releasing its content in bulk. This allows for viewers to continue watching their episodes in a season all at once or at their own pace.
Netflix distributes its brand through various mediums such as Smart Televisions, Smart Phones, Tablet, Blu-ray players, Gaming and Streaming Devices, Cable/Satellite. Netflix distributes its product through various technology platforms. They have started a new way to leverage Internet TV apps to stream their service to member and subscriber base. Essentially, they have disrupted and challenged the cable industry by providing their streaming Internet programming alternative to cable TV. The very same mindset is being transcended into Smart Phone through the very same apps that run on Smart Phones to communicate its content. In the both instances, Netflix has concluded that the future is Internet TV as it is growing rapidly. By offering compelling exciting and interesting programming it gains to attract and increase its memberships, subscriber viewership and revenue. In the future, Linear TV will be fewer and far between eventually becoming redundant. The major television network providers will be required to adapt by developing advanced apps that allow for streaming content or face loss of viewership and revenue if they want to remain competitive. Netflix has evolved to develop customizable content that people can enjoy watching at there our convenience. They realize that everyone has a different taste and Internet TV permits them to offer a much wider variety of programming and content. Its unique interface is sophisticated enough to offer user recommendations based on previous viewing and matches them up with exciting genres and titles. Netflix leverages the likes of Facebook, Twitter and other social media platforms to target specific audiences. For example, millennials are key target audience and its goal is to attract and engage them with Netflix. Specifically, millennials is a generation that constantly shares photos, tweets. Netflix leverages its unique content, convenience and continues application updates to accommodate the Millennial growth. This sharing capability satisfies Millennials and helps Netflix advertises its brand to individuals who may not have subscribed yet.
Netflix has become great at engaging with their audience online, they really to emphasize on the whole “Netflix and chill” vide and it honestly work for their branding perfectly. They use a constant tone online when dealing with both positive and negative feedback while represents the brand well. The represent themselves as a binge watching service because realistically who can just watch one episode of anything if they have access to a whole season. Netflix uses social media marketing by capitalizing using social media to let their consumers interact with the online world.
Netflix often releases all episodes at once; this forces their social media marketing team to take their strategy to the next level. This creates a plan structure to keep a flow of fans engaged at the very start of a show as well as after the full binge. Netflix social media campaign needs to involve more of a conversation aspect with its users. People are more likely to sign up to Netflix if they see that they can stay connected with their friends and family who are watching and talking online. Netflix could allow people to add their friends and allow them to share TV shows/movies they are currently watching or have watched. Netflix will be able to gain more consumers attraction but also keep existing subscribers. Majority of their target market uses social media constantly, being able to engage their target population and get consumers to promote them through social media while using the service.
Their competition included Home Box Office (HBO), AmazonPrime, Hulu, Xfinity, Lovefilm, ESPN and local cable companies as they offer streaming service to consumers for their media products. Netflix’s is considered to be the first at marketing their product over streaming devices. This provided Netflix with a substantial lead over its competition growing it member base to over 80 million users. Netflix strength is having the fasted and most reliable streaming content that is commercial and promotion free. One of Netflix’s biggest weaknesses is show ownership. Netflix has been very successful with leading the way by outbidding its competitors to secure its original series content. Thus far the success if these series acquisitions have been a hit with consumers and viewership. Unlike Time Warner who owns the series that are produced for Netflix, the company doesn’t own these shows. Netflix has an exclusive window to stream the show, but after that, poof, the hit might be gone. Time Warner derives residual income from sale of its shows. Also the DVD market is at the tail end of the decline stage, this continues to be a product lines that has see its membership base decline along with revenue. Netflix price point has been the same for many years; recently there was a $1 increase in the month membership fee that did not go over well with the membership base resulting to members closing their accounts. Netflix continues to monitor the market and its pricing strategy relative to consume sentiment and an improved content.
Netflix uses social media, television and print to communicate brand awareness. In spring of 2011, Netflix held a meeting and outlined blueprints to jettison Netflix DVD operations. Netflix managers made a plan to tell its existing subscribers that on July 12th they planned to do away with a popular subscription that offered access to DVD rentals as well as unlimited on-demand streaming video for $10 per month. DVD rental and online streaming would be separated from each other and would cost subscribers $7.99 a month, or $15.98 for both, about a 60 percent hike. The changes were made to take place in September however Netflix soon aborted this strategy and despite this it enraged customers. The company lost 800,000 subscribers, its stock price also dropped 77% in four months, and management’s reputation was battered. As a marketer, I would have considered researching the market a little further to better understand the clients current needs, income and demographic circumstances. I would have also conducted focus groups in different regions to gather information based on the business strategy and its pricing model. Based on the feedback one would be able to assess and make an informed decision. Perhaps even consider a longer timeline to phase the change and if possible offer the service at no charge over a time period to allow for the customers to become comfortable with the changes. By offering transparent communication and a well-paced transition that fits the customer budget it will earn you trust and confidence from customers.
Netflix continues to dominate the market and is continuously growing its customer base by introducing fresh content and exclusive Netflix branded series. More recently, Netflix had refreshed its brand identity. It has moved forward with stack marketing strategy, which is described as an overla and endless series of content. I personal think Netflix should try and expand Internationally they began solely in the United States; Netflix is currently available in Canada, England, Netherlands, Scandanavia, and much of Latin America. Netflix will continue to expand in new territories/opportunities. Also I think Netflix should make all shows and movie available to everyone. For example, American Netflix and Canadian Netflix should contain the same content.