MARKETING MANAGEMENT

CIA – I

TOPIC: MARKETING FRAMEWORK OF NETFLIX USING PESTLE

ANALYSIS

Report Submitted
By
MAHESH R- 2127214
KARTHIKA M- 2127232
NEHA VINOD- 2127242
NIKITA MATHEW- 2127244
P BINDIYA- 2127246
POOJA- 2127250

To
DR. KAVITHA R. GOWDA

NOVEMBER 2021
 NETFLIX - INTRODUCTION

Netflix is the most popular Internet television network in the world, with over 69
million customers in over 60 countries watching over 100 million hours of TV shows and
movies each day, including original series, documentaries, and feature films. Netflix
customers may watch as much as they want, whenever they want, on virtually any internet-
connected screen.

Netflix believes that, in the long run, internet television will supplant linear television.
People enjoy watching television, but they dislike the linear television experience, in which
channels broadcast programming at specific times on non-portable displays with cumbersome
remote controls.

In terms of entertainment, linear TV was a tremendous improvement over radio, just

as the fixed-line telephone was an improvement over the telegraph in terms of
communications. Internet TV, which is on-demand, personalised, and accessible on any
screen, is predicted to supersede traditional television in the near future.

Netflix aims to spend about $5 billion on content for its consumers in 2016, as well as
more than $6 billion in cash. In addition, they plan to spend around $1 billion on marketing in
2016, in the hopes of luring customers to try Netflix because of its content.

Even in single markets, people have a wide range of tastes. Netflix can offer a vast
range of content thanks to the Internet, and their user interface can quickly learn and make
recommendations depending on individual users' preferences. Netflix users who enjoy action
movies, Korean soap operas, anime, science fiction, Sundance films, zombie shows, or
children's cartoons will find that their homepage is filled with relevant and amusing titles..

As Netflix has acquired experience, they've discovered that adding a 20th bicycling
documentary will primarily detract from the viewing of the previous 19 bicycling
documentaries, and that instead of aiming to have everything, Netflix should seek to have the
best in each category. As a result, rather than carrying as many titles as possible, Netflix
deliberately curates their offering.

Netflix might pay for a multi-year exclusive subscription video-on-demand (SVOD)

licence for a certain title because their licencing is often time-based. Netflix licences material
from various vendors in each market, reflecting the fragmentation of the content sector. Our
bids are often for exclusive SVOD rights, and Netflix is competing against a variety of cable
and broadcast networks, as well as online video competitors. Content owners, on the whole,
want another bidder and never want one bidder to grow too powerful. Netflix has reached the
point where it can afford to produce original material that is only available on Netflix, and its
portfolio will continue to increase and diversify as they achieve more scale and confidence.
Netflix learns more about what its members desire, how to develop and promote originals
successfully, and the beneficial impact of originals on the brand with each original.

When it comes to launching a series or a film, Netflix believes it has a significant

advantage over its linear competitors. Linear networks must draw an audience on a specific
night and at a specific time. Netflix can be a lot more adaptable. Because Netflix shows aren't
fighting for limited prime-time slots like they are on traditional television, a show that takes a
long time to develop an audience can be nurtured by Netflix. This enables Netflix to commit
to a whole season instead of just a pilot episode. Netflix may also give a forum for more
innovative storytelling (varying run times per episode based on a storyline, no need for week
to week recaps, and no fixed notion of what constitutes a "season"). Netflix believes that by
doing so, they would be able to recruit more creative talent.

Netflix has a significant chance to promote their original material, which is virtually
endless in duration, by tailoring the promotion of the right content to the right subscriber.
Despite the fact that season one of House of Cards premiered more than a year ago, a
substantial number of fans are only now getting into the series.

With its line-up of original programming, Netflix is making enormous strides. They
are something that any linear network would be pleased to display. Our success is owed in
part to the Netflix team's excellent creative execution as well as the strength of our massive
on-demand platform.

Netflix, Inc. (Netflix) is an Internet television network provider that was founded on
August 29, 1997. In over 50 countries, the company has over 57 million streaming members.
Members of the Company can watch over two billion hours of television (TV) programmes
and movies per month on an Internet-connected screen, including original series,
documentaries, and feature films. Domestic streaming, International streaming, and Domestic
DVD are the company's three operating segments. Monthly membership fees for streaming
content services generate revenue for the domestic and international streaming segments.
Monthly membership fees for DVD-by-mail services generate revenue for the Domestic
DVD segment. Members of Netflix can view TV series and movies on their televisions,
laptops, and mobile devices. Both domestically and internationally, the company provides
streaming services.

MICRO ENVIRONMENTAL FACTORS

1. CONSUMERS

Consumers in the industry are separated into two groups: those who are looking for
convenience and those who are in need. Convenience shoppers are growing more common in
today's world. This type of customer will view videos whenever they get the opportunity.
They also appreciate immediate and simple access, product transferability and mobility, and
are more than eager to spend time watching video on the internet.

Many of these customers, on the other hand, will rent materials released online more
frequently and will seek for programming and other illegally distributed content. To access
online rental content, these customers do not require specialised equipment such as a home
theatre or television. However, as compared to needy customers, these consumers are found
to have a higher substitution tendency and would watch live programmes, play video, listen
to music, or even engage in other non-media types of entertainment and recreation.

When it comes to leisure, though, needy consumers are pickier and fussier. This type of
customer, in most situations, has a definite predilection for certain titles or genres, and as a
result, they frequently become niche consumers in the market. Relaxing in comfort and
watching television with full audio sound are two of their distinguishing qualities; this
activity pushes them to employ hardcopy media items.

Customers in this category are also willing to wait a few days for their titles, as long as
they adequately fit their demands and interests. Another common feature of this group of
customers is that they are more likely to be mature or even older, and that they will devote
more energy and time to their preferences because they acquire rental materials through more
traditional channels and mediums. This group of customers will be more likely to use mail
delivery services like Netflix and will need to be able to pick up new arrivals at local stores.

2. SUPPLIERS

Suppliers are somewhat concentrated, and product diversification is excellent. These

are film studios; the top six account for more than half of all theatrical release sales. These
major studios are mostly responsible for mass-market and popular titles: Buena Vista, Warner
Bros., Sony Pictures, 20th Century Fox, Paramount Pictures, and Universal. Smaller,
independent studios provide industry competitors as well, although they have fewer new
releases and fewer archive titles. Because demand for independent films is less stable, brick
and mortar businesses have historically done a terrible job of stocking them. With the shift to
huge distribution centres owning all inventory, customers now have more access to indie
films, according to Netflix, which claims to account for 60-75 percent of post-theatrical
release income for independent studios.

3. COMPETITORS

The entertainment industry's leaders are well-diversified throughout several categories of

the industry, thus new entrants pose less of a threat to their market position overall. These
companies are media conglomerates that operate in a wide range of markets, including film,
music, the internet, and television. This can help to spread dependency and reduce short-term
economic pressure in a certain location. Emerging technologies, on the other hand, are
altering the competitive landscape and escalating competitiveness. In the mobile
entertainment and online gaming areas, Apple Inc. and Microsoft are now competitors.
Leaders in the industry, such as Disney, are maintaining their market dominance by excelling
as 'analysts' in their strategic qualities, staying diversified in more stable entertainment
industries while focusing on innovation in developing media areas. Print media and online
resources are becoming increasingly competitive.

Competitive rivalry's main factors include: Main factors of competitive rivalry:

 Alternative delivery methods (in all sectors): Consumer demands are changing
rapidly towards the ease of access of mobile and online entertainment platforms.
 New technology improvements: For example, the electronic book readers such as
Amazon’s Kindle and Apple Inc’s iPad as well as 3D technology.
 Cost of entertainment venues: The cost of concerts and movie tickets are a key
concern to consumers in the current economic condition where many are facing
reductions in incomes and discretionary spending. Lower prices compete as a
larger factor than quality or star appeal in this climate.
In the entertainment industry, Netflix is unrivalled. Netflix has revolutionized the
entertainment sector with the level of services it provides its clients since its founding in
1997. Netflix specializes in video-on-demand and streaming content. It accomplishes this
using mail-in DVDs as well as the internet. Since its inception in 2013, Netflix has taken the
TV and film production business by storm.

a. AMAZON PRIME VIDEO

Amazon Prime Video is an online video-on-demand service that Amazon created,

operates, and owns. Amazon, which was founded in 2006, sells and rents movies and TV
shows. Despite fierce competition, Amazon has grown to operate in over 200 countries as of
December 2016. Amazon just entered the sports world by acquiring the rights to broadcast
portions of NFL games for the 2017 season in a deal worth $50 billion. Amazon's revenue in
2016 was $135.98 billion, with assets of $83.4 billion. Amazon employs about 541,000
people and is headquartered in Seattle, Washington.

Amazon has proved its worth quite clearly in the E-commerce market and we all know
what Amazon is capable of. The company is directly competing with the likes of Apple and
Google. Thus, there is no doubt that it is one of the topmost Netflix Competitors. In fact, if
there is anyone Netflix should be wary of – it would be Amazon prime video.
 b. YOUTUBE

YouTube is a video-sharing network where users may upload and distribute videos for
other people to watch. Jawed Karim, Chad Hurley, and Steve Chen launched the company in
2005. Since being purchased by Google in 2006 for $1.65 billion, YouTube now works as a
subsidiary of the digital giant. The site's popularity is evidenced by the fact that it receives
over 800 million unique visitors per month. YouTube is considered one of the Netflix
Competitors from day one. In fact, YouTube has improved itself a lot in the last few years
including streaming of live events.

c. HOTSTAR

Star India owns Hotstar, a mobile entertainment and internet platform that was created in
2015. Internet video-on-demand and streaming media services are examples of hot stars
services. In addition to Hindi and English, the service is offered in eight more languages. The
headquarters of Hotstar are in Mumbai, India. Its platforms include over 100 advertising
agents and over 50 million downloads. Hotstar received 340 million views during the 49-
match ICC Cricket World Championships in 2015, and over 200 million views during the
2017 Indian Premier League season.

d. TELEVISION CHANNELS

The broadcast frequencies on which the TV network is supplied or delivered are known
as TV channels. These outlets provide major challenge to the traditional media, particularly
during times of high political activity, such as election season. MSNBC, CNN, and Fox News
are among the most popular television channels. TV networks are giving Netflix a run for
their money, even if they don't provide much in the way of competition.

e. CINEMAS

Cinema (Digital Cinema) projects and/or distributes motion films using modern
technology (digital technology). The internet or satellite links might be used for distribution.
IMAX is one of the most well-known cinemas in the world, and it has remained relevant in
an industry that is eager to capitalize on the limitless possibilities created by the smartphone
and internet. IMAX had over 1250 theatres in over 70 countries as of 2017. People who enjoy
seeing movies in groups will choose cinemas.
 4. INTERMIDIARIES

In order to keep up with the evolving consumer environment, Netflix, Inc. seems to fit the
marketing concept of the marketing intermediaries. Marketing intermediaries or the resellers
resell the purchased products at a profit. These organisations have agreements and
partnerships with video producers in order to access the most recent films and provide clients
with the option of streaming live or receiving the video at their home. Netflix, provide
services to its customers to either receive the particular video at home and/or stream live.

PARTNERSHIPS - Alliances have been built with many movie producers, writers,
filmmakers, and animators in order to receive content and legally broadcast the required
contents aligning licences.

INTERNET SERVICE PROVIDERS - The ability of building alliances with many

producers, writers, filmmakers, and animators was one of the most influential strategy that
was implemented.

5. PUBLIC

The media and entertainment influence the public in a variety of ways. The media for the
masses is what allows them to learn about a variety of topics while also forming opinions and
making decisions on a variety of issues. It is the media industry that keeps people updated
and informed about what is going on around them and in the world, and everyone benefits
from it. The media has an impact on the public's perception. Too much media intervention in
everything is a source of concern. The media can be thought of as a "watchdog" of political
democracy.

6. COMPANY

Media and entertainment companies are discovering that content creation, aggregation, and
distribution—their fundamental ecosystem—are constantly evolving and morphing as new
technologies disrupt traditional business models. From interactive gaming, films, broadcast
television, and print and publishing to sports and live entertainment, social media, and
advertising, the ability to identify and manage trends determines the success or failure of
M&E businesses. Deloitte is a leading advisor in the media and entertainment industries.
 MACRO ENVIRONMENT FACTORS

In recent years, the market has become much more competitive as a result of the
industrial development. To keep up with the rat race, businesses must continually be on the
cutting edge with their distinctive ideas. PESTEL analysis is a one-of-a-kind method that
enables businesses to modify their game and stay one step ahead of their competitors.

In simple terms, PESTEL is a technique that assists businesses in monitoring the

macro-environment that influences their growth. This Netflix PESTEL analysis can be
regarded as a framework for achieving the company's long- and short-term objectives. It aids
in the evaluation of external factors that have an impact on the organisation and the industry
as a whole.

PESTEL ANALYSIS OF MEDIA AND ENTERTAINMENT INDUSTRY

1. POLITICAL FACTORS

Entertainment tax in India refers to the tax paid by the Indian entertainment business.
Large-scale entertainment shows, sponsored private festivals, movie tickets, video game
arcades, and amusement parks are all subject to the entertainment tax in India.

Commercial movie/theatre performances, games, amusement parks, exhibitions,

celebrity stage plays, any type of sport, such as horse racing, and exhibitions are all examples
of entertainment activities. The entertainment tax agency is in charge of collecting taxes on
entertainment activities that take place all across the country. The Delhi Entertainment and
Betting Tax Act, 1996 governs the functioning of the entertainment tax department, which is
based in Delhi. In India, the entertainment tax is levied on the organisers or proprietors of
entertainment shows.
 They take the tax from the sponsors and deposit it with the Indian government.
Cinema is one of the most lucrative tax-generating areas in the entertainment industry. A set
amount of tax is attached to each ticket, which is paid while purchasing movie tickets and is
included in the ticket price. The entertainment tax of 25% to 30% is included in the price of
admission tickets to each cinematographic exhibition.

The entertainment industry is an important cash generator for the Indian government.
It also makes a significant contribution to the promotion of Indian arts that depict ancient
culture and sports. This is accomplished by providing them with tax-free perks. Before
putting on any commercial concerts, organisers of entertainment shows must obtain approval
from the Entertainment Tax Department. Owners or proprietors may be involved depending
on the sort of performance. Various entertainment programmes are subject to a variety of tax
regimes. The following are some of them:

• Amusement park tax schemes • Taxpayer-funded programmes

• Programs based on tax-free industries

• Various tax shows on cable television networks • Various tax programmes for
invitees

• Entertainment wagering tax

A range of technologies have been adopted in the entertainment tax department to

alleviate the tax-generating programme. In the entertainment industry, for example, a
computerised ticket booking system has been integrated with online data transfer for booking
movie tickets. The more the entertainment industry's technological advancements, the higher
the tax rate. Implementation of cutting-edge technologies to make it easier for customers to
meet their needs for a sufficient entertainment tax rate based on revenue. Customers mostly
look for convenience and less hazardous tasks while going for any entertainment program
and so faster access would definitely attract more customers.

Entertainment laws

Entertainment law, often known as media law, is a hybrid of traditional legal

disciplines aimed at providing legal services to the entertainment sector. The main areas of
entertainment law usually overlap with the well-known and traditional field of intellectual
property law; however, the practise of entertainment law frequently involves issues relating
to employment law, labour law, securities law, agency & contract, intellectual property
(especially trademarks and copyright), international law (especially private international law),
and insurance law. A large portion of an entertainment industry law firm's business consists
of contract drafting, negotiation, and mediation. In some occasions, such as when Intellectual
Property Rights are infringed, litigation or arbitration may be necessary (IPRs). The
following areas of entertainment law are commonly divided:

• FILM: covering option agreements, finance, chain of title issues, agreements with
screenwriters, film directors, actors, composers, production designers, and other creative
professionals, production and post-production issues, trade union issues, distribution issues,
and general intellectual property issues, particularly copyright and licencing thereof;

• MUSIC: talent contracts (musicians, composers), producer contracts, and general

intellectual property issues, particularly copyright;

• TELEVISION AND RADIO, which includes broadcast licencing and regulatory

difficulties, mechanical licences, and general intellectual property issues, particularly those
involving copyright;

• THEATRE: rental and coproduction agreements, as well as other performance-

related legal difficulties;

• PUBLISHING and print media issues, including advertising, models, author

agreements, and general intellectual property issues, especially relating to copyright; •
MULTIMEDIA: including software licencing issues, development and production,
information technology law, and general intellectual property issues;

RESTRICTED ACCESS

Not every country has strict censorship laws in place. Some governments only allow certain
types of content to be distributed within their borders. Media and Entertainment industry is
limited to the stuff that the government permits.

2. ECONOMIC FACTORS

In the media and entertainment industry, this is critical. Economic factors such as
inflation, unemployment, income distribution, GDP growth, demographics, and others
have a significant impact on the entertainment industry's profits. Because they have more
disposable money, those with more disposable income tend to spend more on
 entertainment. People in poor countries are price sensitive, preferring to spend less on
leisure activities. However, while India has one of the strongest media industries in terms
of films and theatres, it has to expand its children's category because it has such a large
youth population

a) Consumerism and demographics

One of the primary elements driving the expansion of the Indian entertainment sector is the
emergence of a middle class with increasing earning capacity and disposable cash.
Demographic study clearly demonstrates this expansion.

As the average Indian becomes wealthier and his most pressing needs are addressed, he
becomes more willing to spend on discretionary items like entertainment. Companies would
also try to reach out to him through more marketing and advertising as his consumption of
various goods and services increases. In the coming years, the media and entertainment
business will expand due to greater demand and increased investment.

b) Non homogenous market

As the Indian entertainment market expands, it is critical to recognise the market's

diversity. The specialised desire of certain sectors, such as the rural population, women, and
children, is frequently underestimated, and their financial value proposition remains
underappreciated.

Companies and businesses that have been able to cater to the various sectors of the Indian
people in diverse ways have prospered. As a result, the entertainment industry has begun to
see the emergence of a broader set of offers focused at certain niches, such as children's
television channels. In India, however, the 'children's cinema' genre, for example, has yet to
flourish and grow. There is a case to be made for proactive, long-term targeting of
specialised, narrow market segments. In fact, given the magnitude and potential of India's
niche segments, the term "niche" may soon be obsolete.

c) Expenditures on advertising

According to industry estimates, India's overall advertising spending in 2004 was at

INR 118 billion, up 13.4% from the previous year. However, when compared to other
nations, India's 'advertising expenditure to GDP' ratios remain low, highlighting the country's
latent potential. Advertising expenditures in India accounted for 0.50 percent of GDP in
2004, up from 0.48 percent the previous year. This is likely to rise dramatically as a result of
rising consumption and more interest from global companies drawn to this massive and
expanding market.

Because consumers are exposed to a rising number of media channels, firms will need
to promote more frequently and across more channels to establish brand memory. In the
recent decade, as television channels have expanded and available programming has gotten
more diverse, viewership has climbed, specialty channels targeting certain demographic
segments have emerged, and the cost of advertising on television has decreased.

While broadcasters might focus on their common optimism, they must also keep in
mind that advertising expenditures are extremely vulnerable to economic downturns. Budgets
for advertising are not only easily cut, but the efficiency of such expenditures is often
questioned. Companies are increasingly requesting that their advertising agencies tie their
remuneration to performance indicators like sales growth. Addressability difficulties are
being put to the test as more people gain access to cutting-edge technologies, exposing the
limitations of present media study findings and determining the true usefulness of media.

3. SOCIAL FACTORS

The audience is extremely important to the media and entertainment industries, as most
individuals spend time on social media or watching television even while at work. The media
plays a significant role in the spread of information to the people of India, who have acquired
a high infinite for information as a result of globalisation. The impact of increased media
attention has ushered in a social revolution, resulting in a society that is more aware and
appreciative of the business. People watch shows, play games, and observe the lives of other
influencers, among other things. The entertainment industry is influencing our social culture
in several ways. For example, documenting one's everyday routine on Snapchat is required or
followers will start consuming other influencers' material. We subconsciously try to emulate
what we see in dramas in our daily lives Any kind of awareness must be spread via social
media and television. The entertainment business has a direct or indirect influence on our
culture.

The worldwide entertainment and media (E&M) ecosystem has been irrevocably changed
by digitization. Immersive and on-demand content has becoming more prevalent. The
proliferation of digital platforms has resulted in more direct and individualised delivery. The
battle for user attention and money has never been fiercer. The flow of E&M revenues has
been considerably affected as a result of all of these occurrences. Gone are the days when
television networks, film studios, and businesses of all kinds could rely on just one, two, or
even three revenue streams to survive. Today, profitable growth is increasingly dependent on
having five, six, or even more revenue streams – an often-fluid portfolio of bets on businesses
and products that go beyond traditional revenue sources.

The socio-cultural background of a potential market is determined by the social

factors of the PESTEL analysis Sociocultural factors are also playing an increasingly
important role in the context of international business and considering their importance
businesses are making them a part of their operational and marketing strategy. Movie and
series genres and demand vary based on individual customers and regions. Although each
customer is unique, society and culture tend to play a significant role in what most consumers
want to see.

Because the entertainment industry caters to a global audience, it is necessary for it to

pay attention to the diverse interests and preferences of people from other countries and
cultures. This is why the entertainment industry has produced content in a variety of genres
and languages. It has a diverse selection of content appropriate for audiences of all ages and
from all places. However, because individuals can discover a decent choice of movies and
series in their local languages on multiple streams, this has helped the entire media sector
attract a diversified group of clients from around the world.

The demographic makeup of the world's population has shifted dramatically in recent
years. A very evident social influence is language. The majority of customers prefer content
in their native language(s). Although subtitles are available, most viewers are likely to prefer
watching a series in their native tongue. As a result, continuing to develop material in a
number of languages is critical for the entertainment business to fulfil its full potential. Age
and gender are two more social characteristics that are relevant but not as severe. Age and
gender play a big effect in the variety of media content available. As a result, they must
produce content that appeals to people of all ages and genders.The entertainment industry is
influencing our social culture in several ways. For example, documenting one's everyday
routine on Snapchat is required or followers will start consuming other influencers' material.
Netflix's main target demographic is millennials, and the company has adjusted its goods to
appeal to their preferences. This generation is extremely tech-savvy, and they get the majority
of their entertainment from the internet. Any kind of awareness must be spread via social
media and television. The entertainment business has a direct or indirect influence on our
culture.

4. TECHNOLOGICAL FACTORS

The Media and Entertainment business has grown inextricably linked to technology.
Digital media technology, interactive television, and new and e-distribution channels are
some examples of the most recent technology involved. As a result, technology management
is a big concern for media and entertainment firms.

By reinventing its products, cost structure, and distribution, technology has had a
significant impact on the entertainment business. According to empirical evidence,
technology advances cause industrial discontinuities, with the initial dissonance eventually
leading to realignment in order to effectively produce and realise value.

Technological advancements have greatly aided content development, particularly in the

fields of sound, visual effects, and animation. Audiences have benefited from this because it
has provided them with a high-tech content viewing and listening experience. The global
deployment of digital television has compelled leading global broadcasting corporations to
prioritise the development and application of new technologies as a primary strategy.
Specialized offers, such as high-resolution photos, high-speed Internet access, online games
and information, pay-per-view electronic commerce services, and voice telephony, will be the
future for content distributors. Satellite radio, for example, is distinguished by its potential to
reach out to wider audiences than ever before while lowering the cost per contact. While
these technologies often demand a large upfront investment, subsequent volume benefits
through improved reach may offset this Before investing in any new technology, this trade-
off must be assessed. The most significant growing trends in technology and their impact on
entertainment consumption can be found in the domains of media distribution, but some may
be considered product advances.

Technology's expanding penetration is a fundamental force driving today's entertainment

environment. It will drastically transform both the delivery of material and the viewing
experience. Once these technical advancements reach a critical mass, they have the potential
to destabilise the current industry equilibrium. Because of these and other technologies'
impending influence, the successful media and entertainment companies will be those that are
prepared for their disruptive consequences on their business models and industry structure.

The interaction of each of the above elements, notably consumerism, advertising

expenditure, content, pricing, technology, and regulation, will determine the future of the
entertainment sector.

Given the multitude of variables involved, estimating the industry size over the next 5–10
years would necessitate a crystal ball. However, present trends indicate that the business will
surpass the INR 500 billion mark in five years. This is a watershed moment for the Indian
entertainment industry. Beyond the linear development estimates, if a focused and expedited
effort is made today, a bigger storey will emerge. The industry is about to undergo a second
era of expansion, with technology as one of the primary drivers. This phase of expansion will
be driven by a mix of high-quality infrastructure and the progressive adoption of digital
connections, which will reshape how entertainment content is supplied and consumed. As the
government begins to recognise the long-term potential of this sector and begins to accord it
the priority status it deserves, this period of expansion will require an enabling tax and
regulatory infrastructure.

5. ENVIRONMENTAL FACTORS

Environmental difficulties begin primarily with the production of commercials, and we

are continually cautioned about the consequences of deforestation, as in an old folktale.
Because many print media are constructed of consumable elements, even the ink used can
have a significant environmental impact. With this in mind, according to the Environmental
Protection Agency's National Emissions Inventory, employing solvents in print ad ink has a
direct influence on air pollution due to the solvents used in preparation.

According to one estimate, video streaming corporations contribute one percent of total
global carbon emissions. A few companies in the media and entertainment industries have
lately teamed up with the EPA to promote the usage of sustainable energy. Netflix, for
example, continues to have a negative impact on the environment due to pollution in the form
of carbon dioxide emissions.

A. Carbon and Greenhouse Gas Offset

Travel, transportation, production material deliveries, onsite generators, and even
pyrotechnical scenes all contribute to carbon and greenhouse gas emissions in the film and
television production industry. Many productions will hire third-party contractors who
specialise in carbon and life cycle analysis accounting to track the overall impact of the
production to account for the carbon footprint that results from these activities. For more than
a decade, 21st Century Fox has been tracking its carbon footprint and analysing potential
reductions. Their accounting and analysis assisted them in identifying opportunities to
improve energy efficiency and lower carbon emissions, such as reducing CO2 emissions
from film productions by 15% per shoot day and investing in renewable energy sources.
Going above and beyond, 21st Century Fox collaborates with a third-party contractor to
ensure that its carbon inventory is accurate and in accordance with global carbon accounting
standards.

B. Waste Diversion

To create the perfect scene, each show and film employs a variety of props, clothing, and
backdrops. When a production is finished and the items are no longer needed, they can
generate a large amount of waste if not properly disposed of. In these situations, waste
diversion can be extremely beneficial. Many businesses have partnered with existing city
recycling programmes and local non-profit organisations to recycle and donate their excess
materials. Since 2011, Sony Pictures has prevented 90 percent of waste from reaching
landfills at its headquarters in Culver City, California. Instead, leftover food, furniture, and
clothing from in-studio productions are donated to people in need or burned to generate
electricity through a collaboration with the city. Several production crews are working to
reduce waste generated on location, which means on remote production sets. This includes
hiring compost-friendly vendors, working with local food pantries and thrift stores to donate
excess food and clothing, and using reusable water bottles

C. Transportation

In the United States, transportation is the second largest contributor of greenhouse gases.
CBS Entertainment adopted a fleet of fuel-efficient hybrid vehicles in 2011 to reduce its
carbon footprint from production and news team transportation. While the company has yet
to publish a carbon reduction figure for the vehicles, it is estimated that hybrid vehicles can
cut transportation-related carbon emissions by half. Furthermore, nearly every major studio
has promoted and incentivized ridesharing and electric vehicle programmes. Employee
benefits include priority parking for carpoolers, on-site EV charging stations, and hybrid
vehicle shuttles for commuting across studio campuses.

D. Water Use Reduction

Water conservation practices are being implemented by productions and studios in order to
reduce not only their water consumption but also the waste generated by plastic bottles. NBC
Universal recycles stormwater for landscaping and some operational purposes. Similarly
sized production studios are also working to eliminate bottled water consumption by
installing reusable bottle filling stations on their campuses. Some on-location or mobile
productions have even hired new vendors to set up large water filling stations on-site,
reducing plastic waste and transportation costs. In one case, Walt Disney Studios was able to
reduce operating costs on the set of The Amazing Spider-Man 2 by eliminating all bottled
water use. According to the Producers Guild of America, this action has the potential to save
$6,000 in bottled water costs over a 60-day period.

E. Energy Efficiency

Energy efficiency is something that studios are becoming more conscious of, particularly
because it is possible to significantly reduce costs by using energy efficient lighting
alternatives and electrical retrofitting. Many production studios have installed solar roofs to
offset some of their energy consumption at their headquarters. Warner Brothers Studios
currently has a 600-kilowatt solar roof that can generate 1.15 million kilowatts of renewable
energy per year—enough to power more than 150 average homes.

6. LEGAL FACTORS

In the entertainment industry, there are severe laws and regulations that must be followed.
Companies have the right to purchase copyrights and patents to safeguard their content, and
infringement can result in hefty fines. Furthermore, the taxes policies are extremely stringent.
Everything will be carried out in accordance with the contract and agreement. Everyone will
be hired in accordance with the contract. Every economy has a legal authority that protects
the country's entertainment industry.

a. Regulation of Content
 The foundation of democracy and the M&E sector's operation is freedom of speech and
expression. The basic right to freedom of speech and expression is guaranteed by Article
19(1)(a) of the Indian Constitution. This right is referred to as the "mother of all liberties"
since it is at the top of the hierarchy of all other rights. However, there is no such thing as an
absolute right.

Article 19(2) places equivalent restrictions on the exercise of that right in cases where it is
necessary for the state's security, friendly relations with other nations, public order, decency,
morality, sovereignty, and integrity, or in cases of contempt, defamation, or incitement to a
crime. The state, on the other hand, must use prudence in implementing these reasonable
constraints, and the authority must always bear the burden of proof in order to justify the
restrictions imposed.

The Constitution is the source of all content regulation legislation, whether it's the
Cinematograph Act or the Cable Television Network Control Act. However, throughout time,
the authorities have abused their power, far exceeding what the Constitution intended in
terms of fair limits.

Several instances of artistic freedom of speech and expression have been restricted,
including the CBFC's film censorship, state governments' film bans, and the I&B Ministry's
attempt to regulate television content despite the existence of self-regulatory bodies such as
the Indian Broadcasting Foundation.

b. Piracy

The fight against piracy in the M&E sector is well-known. Piracy money costs the film
business alone US$ 2.8 billion each year, according to estimates. The quick availability of
low-cost rental choices, as well as an increase in consumer digital downloads, are both
threatening the movie theatre business model. Piracy has also hampered digital media's
ability to monetise content. High content costs, low income levels, and cheaper internet
infrastructure are all variables that lead to content piracy, according to the report.

Film leaking and release in other geographies, such as the UAE, is a major reason of Cam
cording in cinemas one day before the film's release in the Indian market. Films are made
digitally available within hours of their release. In some situations, before they are even
written.
 Producers can also ask the courts for John Doe orders to prevent their films from being
pirated. The Supreme Court interpreted Section 79 of the Information Technology Act, 2000
(which deals with safe harbour provisions for intermediaries) in the landmark case of Shreya
Singhal vs Union of India in such a way that the removal of online material can only take
place if an adjudicatory body issues an order requiring intermediaries to remove the content.
Because intermediaries fail to comply with a court order compelling them to delete illegal
information rather than simple requests from a third party, the aforementioned judgement
absolves them of accountability.

Regrettably, the producers are forced to turn to the courts to safeguard their rights from this
threat. While the Maharashtra Cyber Digital Crime Unit (MCDCU), which began operations
in August 2017, is attempting to remove websites that publish pirated content, much more has
to be done. Piracy has long been and continues to be one of the most critical concerns
plaguing the M&E business.

c. Abuse of penal laws

One of the most worrying trends in the M&E business has been the public misapplication
of criminal laws. The number of criminal cases brought under the Indian Penal Code, 1860,
for offences including hurting religious sentiments (Section 295A), defamation (Section 499,
500), selling obscene things, performing obscene acts and songs, and so on has surged in
recent years (Section 293, 294).

d. Technology and Agnostic Laws

Regulations must adapt in tandem with technological advancements. India's absence of

technology-agnostic regulation, especially data privacy laws, is, in my opinion, a major
hindrance to the M&E market's capacity to keep up with the burgeoning digital economy.
Only a tiny minority of media business operators welcome new innovations into their area,
while the rest are concerned about the possibility for backlash or difficulties that these new
"uncommon" solutions can cause. As a result, the players grow dependant on antiquated
approaches, making it harder for them to conduct business with one another.

e. COVID-19 specific Contract Issues

 A global pandemic that results in employment losses, border restrictions, and forced
work-from-home arrangements raises the risk of non-performance, poor performance, delay,
and non-payment. It's tough to carry out physical contracts. The cancellation of film
premieres, premieres, and events raises a slew of practical issues, including possible
reimbursements, exchanges, and contractual obligations, especially for stakeholders like
sponsors, broadcasters, and ticket holders, who may have invested significant sums of money
that are now subject to uncertainty and losses.

STP – SEGMENTATION, TARGETING, POSITIONING

STP is a three-step market approach that includes segmentation (S), targeting (T), and
positioning (P). STP is a comprehensive examination of the current state of the business
sector and the organisation. The results are then used as a foundation for the brand's critical
promoting and positioning, but "its value rests in its ability to create profitable business
opportunities from similar business sector situations."

SEGMENTATION

Customer Segmentation

Customer segmentation is a method of breaking down your customer base into smaller
groups based on certain criteria. You can deliver communications to a certain sub-group of
clients using this approach of categorising them.

Gender, age, occupation, marital status, income, and other factors can be used to categorise
these sub-groups.

 Geographical terms include country, state, city, town, and county.

  Technographics: technologies, software, and mobile devices that are chosen.
 Personal attitudes, values, interests, or personality traits are all psychographic.
 Behavioural: actions or inactions, purchasing patterns, feature utilisation, session
frequency, browsing history, average order value, and content consumption

Netflix's business sector is continually on the lookout for indicators of change in terms of
innovation and customer behaviour.

There are several methods for segmenting the market in the video streaming sector; however,
due to the very diverse nature of clients, who alter in age, income, geographic region, and
viewing preference over time, there are a variety of methods for segmenting the market. None
of the divisions will be identical in terms of property, quantitative, generous, open,
distinguishable, notable, and, most importantly, productive.

Behavioural segmentation is primarily used by Netflix to give personalised content to

its 158.3 million users on a daily basis. It uses Machine Learning (ML) to gain insight into its
customers' viewing habits on the TV streaming app. Netflix then uses this data to categorise
users into categories depending on their behaviour, allowing the video services provider to
give a more tailored experience.  To give an example of segmentation in action, if you're a
Netflix subscriber, the firm will know which episodes you've viewed in the last month. It can
detect your favourite genres based on the data and make content recommendations for you to
watch in the future. Netflix provides a wide range of services to its customers. Their service,
which includes shows and movies, is tailored to users who want to watch movies, favourite
TV episodes, and other documentaries on an online platform. Though its primary focus is on
providing information for adults and children, it also meets the entertainment needs of
families by promoting family-oriented, knowledge-based, and amusing content.

Netflix's subscriber base is further broken into three types:

Micro Customer Segmentation -This includes 2000 taste clusters that are identified
by viewing history.

Usage-Based Segmentation-The usage parameters upon which this segmentation is

based are browsing behavior pattern etc.
 Geographical Segmentation-This segmentation is used for content localization and
ad targeting.

Active prospects can also be monetized using this form of client segmentation. For example,
armed with information about a prospect's most recent interaction with your company, you
can use targeted suggestions and discounts sent by SMS, email, or Messenger to entice them
to buy.

Lifestyle

Netflix is focusing on groups that need to unwind after a long day at work, or simply groups
that want to unwind. This group relaxes by watching television shows or movies. This
identifies some end-users as having a need for relaxation in their lives. Another lifestyle that
some end users may have is that of movie/series lovers, who enjoy watching a specific genre
and on which the Netflix service is based.

Personality
Netflix is a movie and television series streaming service that is structured to select the
best movie or series for its viewers. This essentially means that any personality preferences
are used to find the best options for the consumers. A potential user may exhibit a variety of
personality traits.

Demographics and Consumption Pattern

According to data published by Netflix itself, it currently has around 208 million subscribers.
On the other hand, Netflix statistics from other sources reveal that Gen Z makes up the bulk
of its subscribers. Most people appear to be satisfied with the service but are concerned about
price hikes.

 Netflix has around 208 million paying members as of the first quarter of 2021, up
14% year over year. (Netflix, 2021)

 Gen Z users make up 70% of Netflix’s subscriber base. In contrast, 65% are

millennials, 54% are Gen Xers, and 39% are boomers. (Morning Consult &
Hollywood Reporter, 2021)
 As of the first quarter of 2020, 46% of 13 million households in the United Kingdom
have a Netflix subscription. (Ofcom, 2020)

 In the UK, 25% of Netflix subscribers are aged 16 and above. Meanwhile, 22% of
subscribers are aged between 16 and 34. (Ofcom, 2020)

 According to a survey, 96% of Netflix subscribers in the UK plan to keep their

subscriptions. (Ofcom, 2020)

 As of June 2021, 58% of kids aged three to 17 in the UK use Netflix as their video-
on-demand service. (Ofcom, 2020)

 In July 2021, 34% of UK adults said they have used Netflix in the past seven days to
watch online videos. (Ofcom, 2020)

 54% of Netflix subscribers share their passwords with other people outside their
homes. 25% shared it with a family member who was not their immediate family
while 17.7% shared it with a friend. (Kill the Cable Bill, 2020)

 54.5% of Netflix subscribers don’t plan on canceling. In contrast, 25.7% are

considering canceling. (Kill the Cable Bill, 2020)

 36.6% of Netflix users complained about subscription price hikes. Meanwhile, 28.2%
complained about losing popular shows that they like. (Kill the Cable Bill, 2020)

1. TARGETING
 Netflix focuses on a mass market of people who buy Netflix memberships to watch
TV shows and movies, hoping to grab the biggest slice of the pie with the most number of
supporters possible, regardless of age, foundations, convictions, or inclinations. Despite the
fact that Netflix focuses on mass business sector enrolment, it focuses on individual supporter
demands in order to keep them for a long time. Because of the business and administration
model, the bigger the number of paying supporters, the more Netflix can achieve a return on
overwhelming interest in content and innovation.

Netflix is mostly aimed at a younger audience. The main target demographic for this
app is millennial users. It does, however, target middle- and high-income families in addition
to individual customers. People's lifestyles have altered dramatically during the last decade.
People's entertainment requirements have evolved as a result of their hectic lifestyles. Most
people nowadays demand entertainment that they can access whenever and whenever they
want it. The internet is used by a big percentage of millennials to find entertainment. While
social media leads the way in terms of millennial engagement, other online entertainment
sources are also attracting big numbers of millennials.

Netflix's main market is the United States, which accounts for the majority of the
company's revenue. Netflix's business, on the other hand, is split into three segments:
domestic streaming, international streaming, and domestic DVD. Netflix also invests in the
creation of original and fresh content. It spent 981.3 million dollars on research and
development in 2017. Aside from that, the brand uses paid marketing channels to promote
itself. It spent over 1.28 billion dollars on advertising in 2017, with around 1.1 billion dollars
going to advertising.

Netflix also uses social media to communicate with its devoted customers and
promote new shows to a worldwide audience. In terms of social media marketing, Facebook
has played a critical role. Netflix also promotes its products and brand on Twitter, YouTube,
and other social media platforms. Overall, Netflix's multichannel marketing strategy has paid
off, as the number of overall customers has surpassed 139 million. More than 148 million
paid Netflix users in more than 190 countries used the service in the first quarter of 2019.
(Around 60 million paid streaming members in US and around 88 million international). The
most essential point is that Netflix has built one of the most desired internet experiences,
providing the viewers.

Market analysis
With internet penetration and the smartphone market rising at an exponential rate, the market
appears to be in good shape and has a bright future as a pool of untapped market in
developing and undeveloped countries. When it comes to India, the government's emphasis
on Digital India and rural Internet penetration, as well as Jio's broadband revolution, has
resulted in a significant increase in user viewing time per month in our country. Netflix has
already co-produced a TV series called Sacred Games with a well-known brand like Phantom
Films in order to be competitive in the Indian market. Netflix intends to expand its inventory
to include material in regional languages such as Marathi, Punjabi, Tamil, Bengali, and
Gujarati in order to further penetrate the Indian market.

Customer analysis

The online video platform is becoming increasingly popular among young people,
particularly college students and early career professionals, because it is easily accessible on
the go and can be streamed on mobile phones and tablets at any time. Customers of the
company are primarily tech-savvy customers between the ages of 15 and 40, and those who
prefer to watch movies and TV shows on the internet rather than on television, which has a
lot of unpleasant advertising in between broadcasts.

Promotion strategy

Social media websites, such as YouTube, are a crucial source of brand promotion for
the company. Because they are a worldwide recognized brand, they have the advantage of not
having to spend as much money on advertising, therefore they prefer pop-up ads, banners,
hoardings, and other static ads on websites. Netflix has used high-profile celebrities in their
marketing videos in the past to boost sales and profits. One of their promotional strategies has
been to offer a month-long free trial to entice or rather acquaint users with the service by
allowing them to check it out. The business also uses teasers and trailers on YouTube to
market its original TV series, as well as strategically placing hoardings in public places to
inform consumers about their upcoming offerings.

POSITIONING
 The first stage for each new business is to consider how to occupy space in the minds
of potential customers, a process known as 'Brand Positioning.' It's also known as a
consumer's view of a brand in comparison to competitors.

Netflix has positioned itself in the minds of the users and future users as being the
most:

 Comfortable
 Reasoning
 Compatible
 Personalisation-friendly
 High quality
 User friendly
 Up-to date
portal for viewing television and web series, films, documentaries, Etc on a
number and variety of success.

Netflix prides itself on being a platform that has fundamentally transformed the
movie-going experience. Content production, content delivery, content promotion, and
customer involvement are four essential characteristics that set Netflix apart from competing
online streaming providers.

1. A great understanding of their users

Netflix's target audience is well-defined. They mostly target the 18-50 age bracket with their
content. Furthermore, an innovative algorithm aids in the understanding of their customers
and the provision of individualised service. Users are drawn to the site because of the
personalisation.

2. High-quality and original content

Netflix's top-notch programming and original programmes are two of the key reasons why its
customers keep coming back. Netflix's content accounted for more than a quarter of the top
TV series on Thrillist's list.

3. Minimalistic design
Netflix's top-notch programming and original programmes are two of the key reasons why its
customers keep coming back. Netflix's content accounted for more than a quarter of the top
TV series on Thrillist's list.

4. Content Promotion

The distinguishing high-quality content is the underlying basis for such a significant gain in
brand equity. This is combined with its own algorithm, which allows consumers to have a
completely tailored experience. Netflix's success can also be attributed to its particular brand
voice. Netflix's public relations staff maintains a positive relationship with its customers. As a
result, they create amusing polls to engage their clients across all social media platforms.

Netflix Logo

Netflix's vivid red logo draws the user's attention everywhere it is shown. Their logo
is straightforward but effective. Netflix was named the most basic brand in the Global Brand
Simplicity Index. Netflix thinks that a good user experience starts with simplicity.

Their stock performance improved and outperformed various indices, including the
Stamp;P 500, by sticking to their simple brand identity. Furthermore, by establishing itself as
a transparent brand with no disinformation campaigns or privacy breaches, Netflix was able
to achieve excellent subscription growth.

Netflix and brand loyalty

Netflix has over 130 million loyal subscribers by retaining 80% of its customers.

1. First-mover advantage

Netflix has a distinct advantage in retaining consumers because it pioneered the online
streaming sector. Customers are more acclimated to it. As a result, Netflix received a boost
that other streaming services did not.

2. Netflix Originals
Netflix creates original series such as "Orange Is the New Black," "Stranger Things," and
many others, in addition to being the first firm in the sector. The number of recurring
consumers grew as a result of Netflix Originals.

3. Emails and in-product messaging

Netflix illustrates that they are incredibly customer-oriented with smartphone notifications
and in-product messaging, which pulls customers back to the site to renew their subscription.

4. Customer-driven approach

Netflix pays close attention to the information it gathers from customer activity. Netflix
adheres to the strict belief that watching what people watch is more useful than asking what
they want to see. Furthermore, Netflix CEO Reed Hastings believes that listening to data is
critical for a successful product.

FACTORS OF MARKETING FRAMEWORK OF THE BRAND

ANALYSIS

SWOT analysis of Netflix

Strength:
As an essential component of SWOT, a company's strength is its asset to plan its expansion.
Netflix has several strengths that make them one of the top streaming services:

• Netflix has a strong brand reputation and has become a household name by substituting
some of the most popular television shows. In recent years, the company has grown at an
exponential rate.

• Netflix is available in many Southeast Asian countries and has a global presence. It has
given them an advantage in an ever-changing market scenario.

• Netflix's original movies and TV shows provide numerous opportunities to aspiring

filmmakers. The platform's mode of content is as appealing to the audience as their original
content.

• The company is highly adaptable. Netflix constantly modifies its service based on market
demand and viewer preferences. It's the reason Netflix is so popular right now.

Weakness:

Most companies have several weaknesses alongside their strengths. The companies may take
strategies based to work on their weaknesses. Though Netflix is one of the top companies,
there is a particular weakness that is working as a hindrance to their growth:

• Netflix has limited copyright, which has a negative impact on their revenue. The company's
debts are also increasing.

• Several countries suffer from a scarcity of original content. As a result, high-priced

subscriptions are less popular in some countries.

• The company is primarily reliant on its North American customer base. 

• Netflix lacks competent customer care executives, which harms customer service and leads
to lower customer satisfaction.

Opportunities:

The market is continually changing with increased demands, which helps any company
aspiring for substantial growth. The need for OTT platforms is also rising, which is a good
sign for Netflix. So, some of the significant opportunities that the firm can grasp from the
current market are:
• Because Netflix has a strong brand reputation, the current market's high demand for OTT
platforms may allow the company to grow.

• Because Netflix has agreed to sign up for exclusive Netflix-only content, they can bring in
other product lines such as video games, comic books, and so on.

• Netflix has already established a global presence.

• The company can choose to work on new concepts that are better than other OTT platforms
in order to strengthen their subscriber base through a strategic partnership with local markets.
Netflix has already rejected the traditional advertising-based business model, which presents
an opportunity for them to provide excellent customer service.

Threats:

For all the companies in the market, there are specific threats. The market has several OTT
services, and the customers may choose based on their parameters. Therefore, excelling in
almost all the possible parameters can be a solution to retain the position as the best. Even in
that case, the companies may have to face the threats posed in the way of their expansion. As
one of the biggest OTT companies, Netflix is not an exception. So, the threats and risks that
Netflix is exposed to are:

• The reproduction of new original shows and movies has been hindered by COVID-19.
Netflix, like the majority of the entertainment industry, is affected by the pandemic. The
condition will gradually improve as the situation normalises.

• Government regulations in some countries can prevent them from expanding.

• Netflix is heavily impacted by content piracy. Many people prefer to watch the pirated
version of the original series, which is available for free, endangering the company. Another
reason for fewer Netflix customers is that many people share a single account at the same
time.

References

 https://prezi.com/6yuqspn1oxo6/segmenting-targeting-amp-positioning-of-netflix/
 https://mpk732t22016clusterb.wordpress.com/2016/08/08/netflix-segmentation-targeting-
positioning/
 https://freepestelanalysis.com/pestel-analysis-of-entertainment-industry/
 http://fernfortuniversity.com/term-papers/pestel/nyse4/6770-entertainment-one-ltd-.php
 https://www.swotandpestle.com/netflix/
 http://fernfortuniversity.com/term-papers/pestel/nyse4/6770-entertainment-one-ltd-.php
 https://jessicawickens.weebly.com/blog/what-environmental-factors-may-affect-the-media-
industry-030415

 https://www.helplinelaw.com/business-law/LFME/legal-issues-faced-by-media-and-
entertainment-sector-in-india.html