UNITEDWORLD SCHOOL OF LAW

PRINCIPLES OF MANAGEMENT (21UWSL01C03)

TOPIC

ENTERTAINMENT AND MEDIA: FILM, TELEVISION, MUSIC, PUBLISHING,

AND OTHER FORMS OF MEDIA-NETFLIX

Submitted To:

Dr. Deepa Khatwani

(Assistant Professor)

Submitted By:

Dwip Chandnani

(202304010010)
 Table of Contents
.......................................................................................................................................... 1

INDUSTRY ANALYSIS ...................................................................................................... 3

INDUSTRY INTRODUCTION ...................................................................................... 3

RECENT CHANGES IN THE INDUSTRY ................................................................... 4

PESTEL ANALYSIS........................................................................................................ 5

POLITICAL FACTORS .............................................................................................. 5

ECONOMIC FACTORS ............................................................................................. 5

SOCIAL FACTORS ..................................................................................................... 5

TECHNOLOGICAL FACTORS ................................................................................. 6

ENVIRONMENTAL FACTORS ................................................................................. 6

LEGAL FACTORS ...................................................................................................... 6

COMPANY INTRODUCTION .......................................................................................... 7

COMPANY OVERVIEW ................................................................................................ 7

ORGANIZATIONAL STRUCTURE OF NETFLIX ..................................................... 8

SWOT ANALYSIS........................................................................................................... 9

STRENGHTS ............................................................................................................... 9

WEAKNESSES ............................................................................................................ 9

OPPORTUNITIES ....................................................................................................... 9

THREATS .................................................................................................................. 10

BCG MATRIX ............................................................................................................... 10

STAR .......................................................................................................................... 10

CASH COWS ............................................................................................................. 11

DOGS ......................................................................................................................... 11

QUESTION MARK ................................................................................................... 11

REFERENCES .................................................................................................................. 12

2
 INDUSTRY ANALYSIS

INDUSTRY INTRODUCTION

The media and entertainment (M&E) business in India is growing rapidly and is a rising star
in the economy. The industry has benefited greatly from higher salaries, more affordable and
faster internet, and an increase in consumer durable purchases. The media and entertainment
sector in India is distinct from that in other markets. The industry is known for very high
volume and steadily increasing Average Revenue Per User (ARPU).

This greatly benefited the country's industry and elevated India to the top of the digital adoption
charts, and gave businesses access to continuous, rich data that improved their understanding
of their customers. As attention has turned worldwide to India as a favored content creator, the
country has also seen increasing prospects in the VFX business.

The Indian M&E business, which has shown the world that it is resilient, is about to enter a
robust growth phase supported by increasing consumer demand and increased advertising
revenue. A FICCI-EY analysis projects that the ratio of advertising to GDP will increase from
0.38% in 2019 to 0.4% in 2025.

Here is the list of dynamics and some facts:

With a compound annual growth rate of 10%, the media and entertainment sector in India is
predicted to reach Rs. 2.83 trillion (US$ 35.4 billion) by 2025 from Rs. 2.34 trillion (US$ 29.2
billion) in 2025. By 2024, it is anticipated that advertising revenue will total Rs. 394 billion
(US$ 5.42 billion). In 2022, traditional media—which includes radio, print, television, filmed
entertainment, out-of-home (OOH), music, and film—accounted for 58% of industry sales. By
2027, the entertainment and media sector is predicted to have grown by 9.7% yearly and
generate US$ 73.6 billion.

With Disney+ Hotstar, Netflix, and Amazon Prime Video leading the way, the Indian video
over-the-top (OTT) industry is expected to grow from US$ 1.8 billion in 2022 to US$ 3.5
billion by 2027. It is anticipated that the Indian digital market will expand by 29% to reach a
market size of Rs. 35,809 crore (US$ 4.35 billion) by the end of 2023, contributing 38% to the
overall advertising industry in India.

The audio-visual industry and services are expanding at a rate of about 25%, while the
Animation, Visual Effects, Gaming, and Comic (AVGC) sector is developing at a rate of about

3
29%. There are 119 million active paid OTT subscribers in India, out of 424 million people
who make up the country's OTT audience universe.

By 2024, it is anticipated that advertising revenue in India will amount to Rs. 394 billion (US$
5.42 billion), while subscription revenue will increase at a compound annual growth rate of 2%
to reach Rs. 432 billion (US$ 4.94 billion). Affordably priced subscription packages and
growing user demand for content are important growth factors.

RECENT CHANGES IN THE INDUSTRY

• India’s creative economy has grown significantly in the last few years, and in June 2023
the nation will take part in the Annecy International Animation Festival in France.
• The streaming service Jio Cinema, which is owned by Viacom18, has extended its
collection of premium content with NBCUniversal through a multi-year agreement.
• This year, print media income is predicted to rise by 13–15% as a result of higher
business and government advertising expenditures.
• Shemaroo Entertainment intends to bolster its broadcast and over-the-top (OTT)
businesses by investing Rs. 75 crore in FY24.
• PVR Inox intends to invest Rs. 700 crore to remodel current screens and add up to 175
new ones.
• In April 2023, Prime Minister Narendra Modi put Low Power FM Transmitters into
service, expanding the All India Radio transmitter network from 524 to 615.
• In April 2023, Amazon India and the Ministry of Information & Broadcasting
announced a partnership.
• In 2022, the Indian market for online gaming expanded by 35% to reach Rs. 135
billion.
• Over the past four years, South Indian music has experienced the fastest increase in the
vernacular.
• DisneyStar obtained the exclusive rights to televise the Indian Premier League from
2023 to 2027.

4
 PESTEL ANALYSIS

POLITICAL FACTORS
Stability in politics is crucial for the entertainment sector. Since it is a significant source of
income for many nations, including India. Since tax laws are primarily applied to large-scale
events, celebrity or sponsor stage concerts, festivals, etc., they have a significant impact on the
business. The entertainment sector encompasses more than just movies and television shows;
it also includes theatre, horse racing, amusement parks, and exhibitions. As a result, the
government is crucial in this. The government will determine what kinds of entertainment
venues to offer the general public, as well as the costs and taxes associated with them. More
than most political considerations affecting this industry are trade obstacles, intellectual
property protection, taxation, and environmental protection.
ECONOMIC FACTORS
In the entertainment sector, this is extremely important. The GDP growth, employment rate,
income distribution, inflation, demographics, and other economic factors all have a significant
impact on the entertainment industry’s earnings. Since they have more disposable money, those
with higher disposable incomes typically spend more on entertainment. Price sensitivity is
common in developing nations, when people would rather spend less on amusement.
Nonetheless, given its large youth population, India needs to expand in the children’s category
even if it has one of the greatest media businesses in terms of movies and theatres.
SOCIAL FACTORS
Since most individuals spend their time on social media or watching television, even when they
are working, the entertainment sector is heavily reliant on its viewership. People play games,
watch the lives of other influencers, watch dramas, and do other things. Our social culture is
being shaped in part by the entertainment business. For instance, sharing everyday routines on
Snapchat is essential to prevent followers from starting to view content from other influencers.
We attempt to unconsciously emulate the things we see in dramas in our everyday life. The
media and television must be used to raise any awareness. The entertainment business either
directly or indirectly controls our culture. Media also influence people behaviour nowadays. It
can also influence the people behaviour to either positive or negative way.

5
 TECHNOLOGICAL FACTORS
The entertainment industry and technology are inextricably linked. From television in black
and white to vibrant images, technology is the driving force behind the media industry. The
products, cost structures, and distribution have all been redefined. Companies all over the world
are being compelled to increase their investments in technology and integrate it into their core
business plans due to the increasing usage of digital media. The future generation of content
makers will be different as a result of the growing usage of technology, which will connect
more people than ever before and make high-speed internet connection mandatory. with the
help of VFX and green screen it has made many things easier in entertainment industry.
ENVIRONMENTAL FACTORS
There has been some environmental impact from the entertainment business. As we previously
covered, the entertainment sector encompasses a wide range of leisure pursuits, such as media,
amusement parks, and so on. As a result, creating amusement parks with rides might have a
negative environmental impact. The transportation that people will use to get to the park
pollutes the environment and causes significant harm. But in order for a large audience to hear
and act upon the message, the media is utilized to educate people about the need to conserve
the environment as much as possible.
LEGAL FACTORS
The entertainment sector is subject to strict implied laws and regulations. Businesses can
purchase patents and copyrights to safeguard their information, and infringement on these
rights can result in costly fines. Furthermore, tax laws are quite stringent. Everything will go
according to the agreement and contract. All candidates will be hired in accordance with the
contract. Every economy has a legal structure in place to safeguard the nation's entertainment
sector. Some examples of legal factors are censorship etc. Another law is entertainment law
and intellectual property rights. If anyone tries to copy any patented or copyright scene it has
to bear criminal punishment. A real-life example of such act is nowadays trending deep fake
video of public figure. (FernFort university, 2023), (MBA Skool, 2023), (Mishra p, 2023)

6
 COMPANY INTRODUCTION

COMPANY OVERVIEW

I have chosen Netflix as my company in entertainment and media industry as analysis.

Netflix has a long history of breaking new ground and being one of the first companies in the
media and entertainment sectors. Netflix was the pioneer in DVD-by-mail at first, but it quickly
overtook its competitors in other markets as well, such as the DVD subscription plan and
streaming service. Currently, more over 50% of American adults have a Netflix subscription.
Although Netflix has long been at the forefront of the streaming market, other competitors have
entered as a result of their success. Disney+ is a recent arrival that is sweeping the streaming
market. Even though Netflix is still incredibly successful and well-liked, it could lose its hold
on the market if new features and content aren’t added on a planned basis. Now let’s understand
the history of Netflix. It was in 1997 that Reed Hastings and Marc Randolph founded Netflix
in California. Hastings and Randolph had the notion to launch a mail-order DVD rental
business. The first DVD rental website was founded in 1998 and was called Netflix.com. A
year later, Netflix launched its monthly membership service, allowing users to rent unlimited
DVDs. Under the NASDAQ ticker NFLX, Netflix made its initial public offering (IPO) in 2002
at a price of one dollar per share. By 2003, one million accounts had been reached, and
throughout the following several years, the number of subscribers doubled. Netflix launched
its streaming service in 2007. For Netflix, the launch of the streaming service marked an
enormous shift. They rose to fame in the entertainment and media industry After seeing great
success with its postal system, Netflix experienced rapid growth with its streaming service.
Netflix demonstrated innovation by providing a completely new method for watching movies
and TV shows. Eventually, they gained so much popularity that established DVD rental giants
like Blockbuster were forced to declare for bankruptcy because they could no longer compete.
A few years later, Netflix began to provide its service in Canada as part of its global expansion.
2013 saw Netflix grow and start creating original series, such as “House of Cards” and “Orange
Is the New Black.” Netflix was nominated for 31 primetime Emmy awards that same year.
They were the first internet television network to get a Primetime Emmy nomination. For the
next five years, Netflix kept growing into a lot of new areas and also offering content in 62
different languages. There Mission and vision are as follows:
Mission- “We want to entertain the world”

7
Vision- “Become the best global entertainment distribution service” (Netflix, 2023), (SWOT
and PESTEL Analysis, 2023), (Scribd, 2023)

ORGANIZATIONAL STRUCTURE OF NETFLIX

(Databhn, 2023)
Ted Sarandos, co-CEO and chief content officer, and Netflix founder Reed Hastings lead the
company today. A larger group of twenty executives, including those in charge of Global Film,
Communications, Product, Latin American Content, and Global TV, provide support to the two
co-CEOs. Over the years, as Netflix’s business model changed to match the demands of its
users and the latest trends, the company's organizational structure saw several significant
modifications.

When Netflix added streaming to its conventional DVD rental strategy in 2007, it underwent
one of the most significant organizational shifts. Within three to four years, streaming emerged
as the company's main area of focus.

Unlike many major corporations with global operations, Netflix does not function with a
traditional hierarchical or divisional structure, despite its size. Rather than using a hierarchical

8
structure to retain executive authority, Netflix uses a unitary, or “U-form,” structure that is
comparatively flat. Which means all the executive needs to report the CEO. (organimi, 2023)

SWOT ANALYSIS

STRENGHTS
Netflix is a global media and entertainment giant with over 193 million subscribers, dominating
the video streaming space. With exponential growth over the last 20 years, Netflix’s scale and
recognizable brand have earned it the respect of users. The company offers competitive prices,
with a focus on providing a cheap monthly subscription. Netflix's growing output of original
programming ensures that content never expires. The company also excels in customer support,
using technology to recommend new movies and shows. Additionally, Netflix offers the option
to download videos for later viewing. One of its main advantages is its ad-free streaming, as
CEO Reed Hastings believes that there is more growth in the consumer market than in
advertising. Overall, Netflix's success is attributed to its commitment to providing quality
content and customer support.
WEAKNESSES
Netflix faces a significant threat from the loss of original content from creators entering the
streaming market, such as Disney and WarnerMedia. This loss of content, including popular
programs like “Friends” may weaken Netflix’s influence and threaten its long-term viability.
Additionally, Netflix's long-term debt is a significant issue, as they continue to take on new
debt to acquire new content, potentially increasing subscription costs. The North American
market is also a significant vulnerability, as Netflix relies heavily on it for revenue, receiving
half of its revenue from this region, which is almost at saturation. Therefore, Netflix must
address these issues to maintain its market position and profitability.
OPPORTUNITIES
Netflix is aiming to differentiate itself from rivals by maintaining its competitive pricing. By
offering lower yearly subscriptions, Netflix can maintain its appeal and ensure customer
loyalty. Additionally, the company can create original content tailored to specific locations. By
producing its own films and TV series, Netflix can cater to specific target audiences and
increase its content offerings without violating agreements. With eighteen years of successful
original content, Netflix has numerous opportunities to produce content that meets the needs
of its clients. Overall, Netflix’s competitive pricing and unique content offerings make it an
attractive option for streaming platforms.

9
 THREATS
Netflix faces several challenges in the streaming industry, including the introduction of new
rivals like Disney+ and the increasing cost of subscriptions. Disney+, introduced in 2019, poses
a significant challenge to Netflix, even before considering other streaming services like Hulu
and HBO Max. Additionally, market saturation in North America, particularly in North
America and Canada, can impact Netflix's influence in other countries. Government rules and
environmental factors like carbon emissions also pose a threat to Netflix’s success and
expansion into new foreign countries. As the growth in American and Canadian subscribers
reaches an endpoint, Netflix’s influence in other nations is severely impacted. Additionally,
environmental concerns are gaining popularity, making it difficult for Netflix to maintain its
position at the top. (Research methadology, 2023)

BCG MATRIX

Star Question Mark

• Stranger Things • Netflix Gaming
• The Crown • Netflix Live Events
• Netflix Original Movies
Cash cow Dog
• Netflix Streaming Service • VR Content
• Netflix Originals • Cost of upgrading ultra HD
• International Markets

STAR
They are the products which have high growth and high market share. Netflix has certain
products which are has follows:
• Stranger Things: It is one of the most watched shows on Netflix, it has 64 million
estimated views in first four week of season 3. That’s why it is in the list of star products.
• The Crown: It is another film was with 74 million views in the first month of its release.
This is the reason why it is a star product.
• Netflix Original Movies: It is also star product because they have gained popularity
among viewers. Some of the examples of this original movies are Don’t look up, The
harder they fall, Red Notice etc.

10
 CASH COWS
These are the products which are having high market share but low growth, here are the list of
products of Netflix as follows:
• Netflix Streaming Services: It is a cash cow because it generated revenue of $29.6
billion with profit margin of 11% in 2022. It has market share of 68% in streaming
services, that’s why it is market leader and cash cow product.
• Netflix Orignal: It has a revenue of $4.6 billion and having profit of 20%. As a result
it is also considered to be the next Hollywood and is kept in cash cow of Netflix.
• International Markets: Netflix is spread over 190 countries and is generating revenue
of $26 billion with profit of 8.5%. It has low profit but because of high market share it
has been kept in cash cow list
DOGS
These are the products with low market share and low growth, this are the products which are
at the urge of closing or company should not waste money on them here are the list of products
of DOG that the company has:
• VR Content: It is kept here because it is a future concept and has low market share and
also the cost of making this content is higher that’s why it is kept in DOG.
• Ultra HD: It has low share in the market and Netflix has low subscribers of this content
thus it should close it and do not waste investment on this project or product.
QUESTION MARK
These are the product with low market share but high chance of future growth. It needs
investment in order to survive or else it would become a DOG product here are list of these
products.
• Netflix Gaming: In recent times, Netflix has announced expansion to gaming industry
for their subscribers for free but despite of high growth rate it can face competition from
companies like Apple and Google.
• Netflix Live Events: In 2022, Netflix has expanded their roots to live events, it has
good potential but requires cost. For example tudum fest of Netflix. (Discounted cash
flows, 2023), (Netflix Financials, 2023)

11
 REFERENCES
• (2023, november 20). Retrieved from FernFort university:
http://fernfortuniversity.com/term-papers/pestel/nyse4/6770-entertainment-one-ltd-
.php

• (2023, november 20). Retrieved from Mishra p: https://docuri.com/download/pestel-

analysis-of-entertainment-industry_59c1cf22f581710b2863ba27_pdf

• (2023, November 20). Retrieved from Netflix: https://about.netflix.com/en

• Databhn. (2023, November 20). Retrieved from

https://www.databahn.com/pages/netflix-organizational-structure

• Discounted cash flows. (2023, November 20). Retrieved from

https://dcf.fm/blogs/blog/nflx-bcg-matrix#Cash_Cows

• MBA Skool. (2023, november 20). Retrieved from https://www.mbaskool.com/pestle-

analysis/companies/18139-21st-century-fox.html

• Netflix Financials. (2023, November 20). Retrieved from

https://ir.netflix.net/financials/quarterly-earnings/default.aspx

• organimi. (2023, November 20). Retrieved from

https://www.organimi.com/organizational-structures/netflix/

• Research methadology. (2023, November 20). Retrieved from https://research-

methodology.net/netflix-pestel-analysis/

• Scribd. (2023, November 20). Retrieved from

https://www.scribd.com/document/29847179/PESTEL-ANALYSIS-OF-
ENTERTAINMENT-INDUSTRY

• SWOT and PESTEL Analysis. (2023, November 20). Retrieved from

https://swotandpestleanalysis.com/pestle-analysis-of-netflix/

12