MARKETING

STRATEGY
PRESENTATION
(Team 1)
 AYUSHI GUPTA
- 20126
AALEKH
TAK
- 20118 PRESENTERS
OF THE CASE

AYUSH
AGARWAL
ASHUTOSH - 20124
SAHU
- 20123

AKASH SOIE
- 20119
 CONTENTS

SWOT, Approach &

Conclusion
PESTLE & Strategy
PORTER Qwikster
C Controversy Content
ompany’s Ov Marketing
erview

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 Overview

➢ Started in 1997
➢ Initially dealt in movie rental business
➢ Went public on May 23rd, 2002
➢ Launched online streaming services in 2007
➢ First company to offer streaming services on all devices (TV,
Mobile, Computers, Video Gaming Consoles)

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 Content Development
Content Development gave a major boost to
company's fortunes and there was no looking back
from this point.

Best quality content

What made Till date, Netflix spends billions of dollars

every year to make quality content
them big? worldwide. Company is known for its best
quality content like HBO was known in the
television industry.

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 Strengths
Threats • Range & quality of
• Competition
content
(Disney+Hotstar, • Brand
Amazon Prime etc) • Technology (Supports
• Competitive Pricing
on-demand streaming
• Piracy
service)
• Customer Base (167
million in 2019)

SWOT
Analysis Opportunities
• International Growth
Weaknesses
• Business Model (Easily
replicated)
(India, China & South • Green Credential
America) (Started to offset its
• Artificial Intelligence
energy use)
• Virtual Reality
• Rising Debt ($19 billion
• Acquisitions
in 2019)
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 Legal Factors
Environmental Factors
PESTLE Analysis In partnership with
In 2016 Netflix suffered a costly PR misstep over a
consumer lawsuit and Netflix was issued a class-action
lawsuit from customers who were angry, furthermore
Following the spread of coronavirus, as more and Greenpeace, Netflix is the company received widespread media criticism for
more people around the world are staying indoors, beginning to look at solutions their confusing customer contracts
the demand for its services has grown fast abruptly. to lessen their carbon footprint.
As the consumption of digital services grows At current usage rates, tech
companies are being told by
worldwide driven by increased use of the internet
global governments to pay part
and mobile devices, Netflix continues to enjoy
of an environmental bill
growth in popularity and sales.
upwards of $11 trillion by E L
2025.

Social Factors
Social trends are showing that
young customers are moving to
watch video content on their
smartphones rather than
traditional larger screens. In 2015
US viewers watched 24 minutes
S T
on average on smartphones, in
2016 it grew to over 40 minutes.
Political Factors
With an increase in internet usage,
US telecom giants AT&T have
gone to the Federal P E
Communications Commission to
insist on stricter usage regulations
which would threaten the business
model of Netflix's streaming
service.
Technological Factors
Netflix's R&D Labs have also
developed new software
codenamed 'Hermes' which
automatically grades a translation
of a Netflix show. This
innovation will allow for faster
recommendation engine and
higher quality translation efforts
Economic Factors
for Netflix to serve its
In a current global recession
where many customers spending
programming to its 190
countries.
budgets are tight, services like
Netflix are more attractive due
competitive pricing against
traditional television services.
 Porter’s Five Forces

Bargaining Power of Bargaining Power of Threat from New Threat of Substitutes

Suppliers Buyers or Customers Entrants Product Competitive Rivalry

HIGH HIGH ∙ Medium High Medium-High

•Suppliers own •Customer loyalty is •Low industry •Alternative methods of • Many competitors
content weak (price changes) barriers. receiving content • Few emerging
•Licensing Deals •Majority of revenue •On demand, players
•Industry leader
Legal Issues is from consumers purchasing • Trying to maintain
Customer loyalty is
content,movie theaters
dominance
low. etc
Qwikster Controversy

● In July 2011, Netflix announced about splitting its plans

into two parts: streaming video and DVD rentals.

● Those who wanted both streaming and DVDs had to pay

60% more per month. Previously they’d been able to
bundle both for just $2 more. This scheme was released
when people were still reeling from the 2008 Financial
Crisis.

● The company tried to portray it as offering subscribers

choice. But, it became a headache for the customers.

● Instead of reworking on the scheme, Netflix renamed the

DVD rental side as Qwikster.

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 1 2

Customers bailed out Netflix’s stock price

almost immediately tanked, from $300 a
following the share in mid-July to $78
announcement. Effects of in late October, and
sinking further from
QWIKSTER there.

35 4

Analysts described it as Now, a skilful strategy was

a “nuclear winter” for required to recover from this
Netflix. loss and rebuilt the loss trust of
customers.
Netflix uses its own social media handles for promotion. Cool,
Isn’t it?

“Reed, thanks for reminding me that I should go

somewhere else for my DVD rentals. It was an
insult enough that you raised the price on me last
month, right in the middle of the biggest recession
since the Great Depression, but now instead of a
sincere apology, all we get is excuses and a flimsy
new name”

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 NETFLIX’S APPROACH
1. Navigating the change from Netflix as a DVD rental site to Netflix as a streaming
video destination. Statistics: Between Q3 and Q4 2011, DVD-by-mail
subscriptions dropped
20%, from $13.93M to $11.17M. Meanwhile, streaming-only subscriptions
increased
slightly, netting just $52M on $476M in sales in Q4.

2. Winning back the trust of its subscribers.

3. Key Factors to be considered:

● listening to its customers.
● reducing risk by moving fast into streaming video ahead of the competition.
● turning the company into a unique creative force.

1. Removing the legacy part of the business would be the best strategy in the long-term
for Netflix. But it was a delicate balancing act to convince subscribers to move
towards streaming. Here’s what had to happen:
● The viewing public had to see Netflix in positive terms once again
● Streaming subscriptions had to increase
● DVD subscribers had to be shifted into a separate business area.
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 In 2012, Netflix planned to remove DVDs from the
company’s core offerings. It was also a subtle push to get
more streaming customers on board.

By the end of 2012, the company’s streaming subscriber

numbers surged, adding nearly 10 million globally.
Meanwhile its losses continued on the DVD side, with
around 400,000 dropping out.

These losses were no longer a bad sign: in fact, they were a

good one. This meant that their plan was taking shape.

Not only did streaming continue to increase, but the

company’s profits from streaming began to overtake DVDs.
Netflix’s Strategy The stock price rebounded as analysts and investors
realized that the company was on the right track after all.
There was no more talk of a “nuclear winter.” By October
2013, the stock price reached an all-time high of almost
$400 a share.

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Comparison b/w DVD vs Streaming Services

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 CONTENT INNOVATION
Netflix knew as early as Netflix became a competitor.
2011 that to keep its Its partnership with Starz
place at the top of the which forged in 2008 ended in
streaming food chain, 2012. (Starz was owned by
they would have to Liberty Media, a large cable
create content of its own. operator with a number of
channels under its control)
Netflix posed a direct The company once again
threat. Thousands of had to make a choice.
movies and TV shows The team had learned
disappeared from Netflix that the safest route was
virtually overnight. to reduce risk by moving
Customers weren’t faster than the
happy. Meanwhile, the competition. They had to
cost and complexity of reinvent Netflix. And they
acquiring titles from couldn’t afford to back
Hollywood was becoming into it. They’d have to go
unsustainable. big.
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Insights from Netflix’s Marketing Strategies
● Humour in advertising is the next best thing, Dare to be Different
● Memes are the biggest gift for social media marketing
● Never fail to engage with your customers
● Adopt quality content and relevant marketing strategies
● Find out more about your customers and personalise your messaging
● Let Data Show You the Secrets to Better Customer Service

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 1. BINGE WATCHING

➔ Netflix has a strategy of releasing complete

seasons of web series in one go.
➔ This develops a culture of binge watching
among its subscribers.

2. CONTENT RECOMMENDATION USING

Netflix’s Content ➔
➔
AI
Netflix keeps a track of user’s watch history.
AI based algorithms are used to know consumers’ taste
Promotion ➔
and preferences.
This information is used to give recommendations to

Strategies users while streaming content.

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 3. A PLAN FOR EVERYONE

➔ Netflix keeps a wide range of subscription plans

in order to widen its consumer base.

➔ Users can choose any of the weekly, monthly or

yearly plans.

Netflix’s Content ➔ In each segment there is an option of mobile,

basic,standard, and premium plans according to
the budget of the users.
Promotion ➔ There is also a provision of group plans, where

Strategies multiple users can share costs.

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WHAT MAKES THEIR CONTENT BEST?
REGION SPECIFIC CONTENT

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 PRODUCT DIVERSIFICATION

MOVIES WEB SERIES SHORT FILMS

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Net Income Generated by Netflix from 1st Quarter 2011 to 2nd Quarter 2020

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 Netflix’s Foothold in India in COVID-19

Netflix has added 10.1 million new paid subscribers as people stayed home, as the
company reported net earnings of $720 million over $6.15 billion in revenue for its second
quarter (April-June period). Netflix is also ramping up its original content programming in
India at a time when video streaming services are witnessing a surge in content
consumption with people confined to their homes due to the pandemic-induced lockdown.

Overall, Netflix has commissioned about 50-60+ productions in the country, its largest
investment in original programming outside the United States. Of this, around 19+ films
and 14+ original series have been released on the platform as of now. In December, the
service had announced plans to spend Rs 3,000 crore on content programming in India in
2019 and 2020. While the company doesn't provide a country-wise breakdown, it added
2.66 million subscribers in the Asia Pacific region for the quarter ended June 2020 and
generated revenues of $569 million for the period.

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Conclusion
Netflix made a name for
A itself in 1997 as pioneer
of the DVD mail-order
business. Qwikster Controversy did
bring losses for the
company, but it can be a
Netflix is continuously
B using its Big data and
viewed as a blessing in
disguise. It enabled
data analytics effectively
to generate actionable
D Netflix to switch to
streaming platform and
insights.
bring a revolution.
C It has established its
name in Binge watching
domain. F Its original content and
personalized
recommendations have
become its USPs.

G Netflix is constantly
working to adapt to
newest technologies and
provide its consumers
with the best content.
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Thank
You