1. What does your group think about the position that the author put forward in the article?

Do you agree or
disagree and why? Was there anything that surprised you and your group?

“Netflix achieved its incredible success by being first in streaming. It's a true disruptor stock that
revolutionized TV. For years it essentially “owned” the mechanism of airing TV and movies over the internet.
Now that others have caught up, the game has changed. Soon customers will have lots of streaming services to
choose from. They’ll choose the ones with the best content.”
Competition is bound to happen and it will be fierce. My group and I share this same observation with
the author. When Netflix had proven its success in the recent years with its innovative streaming platform, other
media companies would naturally want to replicate that. Profitability is the driving force for most companies,
and the trend of video streaming online is an opportunity to do so in the midst of a pandemic and a failing
economy.\
The imminent streaming war is just the beginning of what will be the battle of best original content
among production powerhouses.
2. Looking into the external environment (Demographic, Economic, Natural, Technological, Political, and
Cultural) of Netflix, identify what are the factors that have significant impact to the case of Netflix.
The demographic, technological, and sociocultural factors have heavy influence in the future of Netflix as each
play a significant role in its success.
Demographic because empirical data strongly supports the notion that Netflix is widely popular among
the younger age group. Netflix subscribers’ demographic data shows that its users tend to be younger, with just
50% being over the age of 35. And a study conducted by May, Cowen & Co., also showed that showed that
27% of the 2,500 adults in the US and 40% of the respondents aging 18-34 chose Netflix over other platforms.
Hence, the steady popularity of the platform can be owed to its younger, more technologically-capable
audience.
Sociocultural factors also have an influence on the streaming service, as creating and streaming videos
are also dependent on a country’s social conditions. If Netflix were to produce movies and shows without the
consideration of their target audience and its cultural context, would that be beneficial (profitable) for the
company? Films that are widely popular to the western audience, may be distasteful to their Asian counterparts.
And so Netflix must do its best in carefully shaping their services to a region or country’s taste.
And lastly, technological, because if there’s any prominent impact Netflix has done in the 21 st century, it
is through its transformative platform that merged home technology and entertainment at a feat that shook
businesses and economics of mass media. Much of Netflix’s success is due to advances in technological
convergence—the success of its streaming service closely coincided with the growing adoption of high-speed
internet connections (which surpassed 50 percent in the United States in 2008 and 70 percent in 2013). The
proliferation of smartphones and wireless connections (as well as digital video recorders) shifted expectations
about accessibility and convenience, popularizing presumptions that culture circulates best on an on-demand
basis.
The convergence of these technologies in turn accelerated several other trends that would benefit
Netflix.
The constantly changing external environment requires a company’s adaptation and commitment to change.
Strategic ability is a must to ensure continuous success, especially if your business is in a highly competitive
market. Ergo, one must learn to adapt and adopt the demands of the consumer and market. And Netflix did just
that.
3. What are the threats that Netflix is currently facing? What are the opportunities that the organization
can maximize in order to sustain its dominance in the video streaming industry? (You can look into more
recent events in answering the question.)
The sudden surge of alternative streaming services certainly posed a threat to the monopoly of the
streaming platform—some of the biggest companies that had signed a contract with Netflix had terminated their
contract and started their own streaming services—and this caused the company start investing heavily in
producing original content. It worked, somewhat. Though the popularity of their hit shows Stranger Things,
Orange is the New Black, and The Crown certainly aided them in gaining new subscribers and solidifying
themselves as a household name, the sustainability and expense of producing such shows have investors
concerned. Netflix is spending more money than they can earn—and the steady increase of their subscription
fees are proof of that.
But even so, this isn’t the end of Netflix. The presence of competition in the market has urged the
company to act quick, yes, but it’s not enough to spook them into admitting defeat. Unfortunately, creating
original content for the platform is not enough to sustain the company. They should invest in that, most
certainly, but they should also consider the increasing financial deficit of supporting such ambitious projects.
They don’t earn the same revenue of production giants like Disney and HBO, and so they must also collaborate
with other media companies to produce or stream their content exclusively on the platform.
Vying for exclusive streaming rights and/or collaborating with various media groups would be
extremely helpful in sustaining the company without allowing themselves to be in a competitive disadvantage.
4. What should Netflix do to defend its business from its competitor in the video streaming industry?
What could be the future for Netflix?
At this stage, seeing that multiple media companies are attempting to compete with the streaming giant
by launching their own exclusive streaming service, it’s not unlikely to think that we will see Netflix either
failing to compete or become another obscure company of the past. After all, when you have the likes of Disney
(that has a roster of award-winning animated films and shows) creating their own streaming platform, it should
be a cause of worry. However, Netflix has the advantage for getting a head start. Having amassed over 150
million loyal subscribers (and counting) in the recent decade, it would be much easier for the company to keep
those users rather than finding ways to gain new ones.
One of the strategic efforts that Netflix could do is to provide better incentive to its users. If they plan on
increasing their subscription fees, they should show its users and potential consumers that their monthly fees are
worth paying for. Mass grabbing films that could capture the attention of audiences, providing various content
to cater to the diverse age group (not just the younger audiences) and culture of its users, and expanding their
film reservoir by funding original content and securing exclusive streaming rights is something that they should
maximize on.
Good original content is what interest people. And Netflix should focus on that if they want to have a
chance in this streaming war.