NETFLIX

Business Strategy and Product

Essedova Aiman
Bekmuradova Diana
Bizhan Rakhat
Shaukharova Raiymnur
 OUTLINE

About Netflix
product
NETFLIX
innovation

Netflix Netflix's
innovation business
process strategy
 Netflix Inc. is an American subscription-based video streaming
platform.

The platform is used internationally to stream movies and TV

shows from numerous different countries and genres. Other than
About NETFLIX operating as a streaming service, Netflix is also a production
company producing movies and television series under the
Netflix Originals brand name.

Netflix is available in 190 countries, in 30 different languages

The company's mission is to 'entertain the world'

 Netflix Product
Innovation

In 1997, the founders of Netflix had an idea to rent DVDs by mail and tested out whether
the idea would physically work. They sent a DVD in the mail and once it arrived intact, the
company was born. A year later they launched the netflix.com website where customers
could rent DVDs which would then be mailed to their house. This is an example of
disruptive innovation that the company undertook, as the company developed a completely
new service that added significant value to customers.
In the following year, the company developed a subscription service whereby customers could rent
an unlimited number of DVDs per month.

Shortly after, the company introduced an algorithm that assessed customers' previous ratings of
movies they have watched to predict which movies they would choose to watch and rate highly in
the future.
In 2003, the company announced that there are over 1 million Netflix subscribers. To protect its
innovation and intellectual property, the company issued a patent for its subscription rental
services.

In 2007, the company introduced streaming which allowed its customers to watch movies and
series instantly (rather than waiting for the rental DVD to arrive).
 As seen throughout the service and product innovation process, the
strategic direction that Netflix took was to innovate its service, to achieve
their overall purpose of making it convenient and accessible for
consumers to watch TV shows, movies etc.
 Netflix innovation process

The innovation strategy that Netflix pursues is gaining a competitive advantage through producing
high-quality content and being accessible to a majority of people.

1997 1999 2000 2003 2006 2007 2011

Video
Subscription Netfli Issuing Video First Netflix
DVD start up recommendation
model x patent algorithm Streaming original
queue
 Netflix's business strategy

Subscription Model Original Content Production

Netflix operates on a subscription-based model,

Netflix heavily invests in producing original content,
providing users with access to a wide range of content
including movies, series, and documentaries.
for a monthly fee.

Global Expansion

Netflix operates on a subscription-based model,

providing users with access to a wide range of content
for a monthly fee.
 Technological Innovation

Continuous improvement in streaming

technology and user interface enhances the
overall user experience. Features like offline
viewing and personalized recommendations
contribute to customer satisfaction.

Streaming Services

The core product is the streaming service,

providing on-demand access to a vast library of
movies, TV shows, and original content.
 revenue stream
Basic Standard Premium
$9.99/month $15.99/month $19.99/month

Almost 90% of all its revenue ($32 billion in 2022) comes from subscriptions and
partnerships, while ~10% comes from advertising.

Total Revenue for 1 year in December 31, 2022, was $31.616 billion, a 6.46%
 Challenges and Future Outlook
Problems:

• Increasing competition
The emergence of new streaming services (Disney+, HBO Max)
The struggle for the attention of the audience

2. Financial burden of content

High costs for the production of original content

3.Outflow of subscribers
Price increases or Content fatigue
 Challenges and Future Outlook

Prospects for the future:

• Global expansion
Active penetration into markets with high growth potential

2. Investing in a variety of content

Creating a wide range of content of different genres

3.Technological innovations
Improving recommendation algorithms and experimenting with formats
 Conclusion

NETFLIX continues to lead the entertainment industry through its

ongoing innovation strategy. Their adaptability, diversity of content and
technological innovations make the company a leading player determining
the future of streaming content.
Thank you for your
following