Section seen, and much more. Currently Netflix provides

Topic: BusinessGoogle
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Last updated: September 13, 2019

Section1: Company ProfileReedHastings and Marc Randolph are the founders of the very popular and well-knownmovie streaming service Netflix founded on August 29, 1997 (forbs). Netflixofficially opened for business on April 14, 1998 with 30 employees behind itand around 925 different DVD selections (cite).

It is headquartered out of LosGatos, California (forbs). Netflix didn’t start off as a big success, but wouldeventually get its claim to fame. Netflix offers online movie and tv-showstreaming for viewers around the world. Accordingto Forbes, as of mid 2017 Netflix employs over 4,700 people. A huge jump fromthe previously mentioned 30 employees at the start of the company.

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Theirwebsite, http://netfix.com, offers a user-friendly site easy to navigate, allowsyou choose movies/tv shows to watch, rate ones you’ve already seen, and muchmore. Currently Netflix provides domestic and international streaming, anddomestic DVD (forbs). They are backed by over 117 million streaming subscribersin over 190 countries (About Netflix).

The initial monthly subscription back inxx was priced at 21.99 soon dropping to 17.99, to compete with competitors,eventually leading to the current price offered at 7.

99 (youtube:Netflix fullstory). As for their goal in terms of business and popularity “In their ownwords, Netflix wants “to become HBO faster than HBO can become Netflix”.(needscitation)”  And they may just get theirwish with Netflix passing the $100 billion  mark for market capitalization during thefirst quarter of 2018.(CNBC) Hastings,the CEO for Netflix, has gone on record stating the idea behind the start ofNetflix came after he was charged with a $40 late fee from Blockbuster for notreturning a movie in on time (Netflix Inc). This got him started on the idea ofa service that could ship DVDs around the country for a small monthly fee withno late fees, allowing for an easier and more enjoyable movie rentingexperience.  Back in 1998 the companystared as just a simple online DVD rental by mail until eventually evolvinginto the massively successful online video streaming service that millions ofpeople from around the world use on a daily. During the start of the companythere were a few setbacks.

The main one being the amount of DVD players ownedby people in the United States which at the time (1997-1998) was only around 1in 100 households due to the sheer cost of a player ranging from $600 to $1000 (BusinessCasual).  Since the whole point ofNetflix was the distribution of DVDs this posed a little hiccup to the wholeidea of the company. Luckily in 2001 the price for DVD players plummeted goingfor around $100.

This was a major win for Hastings and his company. In 2003Netflix hit its 1,000,000 subscriber mark and finally began to turn a profit.By 2005 Netflix was shipping over 1 million DVDs a day to customers.

Then, beganoffering streaming of movies and tv shows in 2007(cite). “Netflix obtains content from various studios and othercontent providers through fixed-fee licenses, revenue sharing agreements anddirect purchases. It markets its service through various channels, includingonline advertising, broad-based media, such as television and radio, as well asvarious partnerships.” (Forbs). The top Netflix partners that I know of includebut are not limited to: Marvel, Sony, LG, Google, Facebook, and Samsung. Tokeep from losing money from paying big time movie industries and studiosNetflix began development on its own original content in 2012 (cite).

Thiswould prove to be a good move for the company. In Feb 2013 Netflix’sfirst original show House of Cards was released (cite). It was a huge successdue to the fact that the whole first season was released all at once to thewebsite not to mention the gripping story line and the A-list actors starringin it. The availability of the full season all at once was something completelynew at the time.

Most people were used to waiting for the one new episodereleased every week from their favorite shows on various television networks.Now they had the ability to watch a whole season right then and there, leadingto the new way people consume their television, BINGE WATCHING.(datamanagement) Section 2: Digital and Social Media UseNetflixuses all the main stream social media sites as expected of any business nowdays that wants to keep up with and stay ahead of the competition. There areTwitter, Facebook, and Instagram pages for Netflix.

These pages allow Netflixto “keep in touch” with their subscribers and also allows them to be able toget some good marketing out into the world. After just checking Facebook alonethey have well over 42 million followers, Instagram has 6.4 million, andTwitter has 4.6 million. On their social media sites, they post information onupcoming season release dates for popular series and promote new shows soon tobe released. They also advertise trailers, sneak peaks, and suggested showsthat are currently trending. I was surprised but there was even a Pinterestpage that had pictures on things such as: decorating for the holidays usingNetflix themed decorations and show-themed baked goods just for the family.

Thereare company and tech blogs at media.netflic.com that write about which InternetService Providers have the best and fastest streaming capabilities. Also, underthe tech category on this website people are able to read more technical blogswritten on advances Netflix is making, what new applications are supported by Netflix,and much much more.

They’ve really reached out to almost every social media anddigital avenue available to be able to communicate with their client base.  Also, keeping in touch with what theirfollowers respond to the most gives them even more insight into which shows aremost popular, what kind of response new ideas for shows will have, and opens upa line for the outside world to give opinions on shows and movies that may notbe promoting the way they would like them to (revise).  **Need a reference for this section**Section 3: Analysis”By not being advertising dependent, Netflix’s profit isdirectly proportional to the number of paying subscribers.”( Fernández-Manzano). Netflixis a smartly run company, and they know how to appeal to their customer basekeeping the subscribers happy and drawn in.

When subscribers are happy andentertained this leads to a more stable client base and builds a strongfoundation for it to grow even more. Each Netflix account is monitored in a wayto appease its viewers by displaying personalized recommendations for trailers,tv shows, and movies (cite). “Netflix employees routinely look to existing dataviz tools to tweak algorithms, garner new insights, and solve pressing businessissues.” (Simon P) Thus alluding to how Netflix continues to keep its customerbase with the use of “Big Data”. Even the color scheme (displayed in thepicture below) for show covers such as House of Cards was analyzed byalgorithms on the site to tailor the viewing experience for each individualperson based on what they click on or watch. Netflix actually compares thetitles being clicked on the most by viewers, but it’s not just the titles theylook at it’s even as fine tuned as comparing the color schemes for the coverpictures being advertised for that particular show. These algorithms figure outwhich colors are more appealing to its customers, processes the data, andchanges its display to match with the results it’s getting. The trailers forshows are even being picked to suit the right people.

“Netflix made 10different cuts of the trailer for House of Cards, each geared toward differentaudiences. The trailer you saw was based on your previous viewing behavior.” (SimonP) One thing Netflix could do better to proceed on the bountiful track thatthey’re on would be to allow viewers the ability to choose which genrespopulate on the main profile. The genres when I access Netflix on my computerare different than the ones that show up when using other devices like a TV.The personalization the Netflix already offers is great but a few minor thingshere and there would add to the experience in an even better way. Some articleseven hit on the same point I’m making. Business Insider has one article thatpoints out customization flaws. All very minor yet they still stand out.

Thingssuch as summary view, automatic trailer play, customizing the home screen, andspecific actor-based movie recommendations (business insider). Even with thesesmall annoyance’s Netflix is still continuing to expand its number ofsubscribers and this can only be due to the satisfaction that consumers havewith this service. Netflix has added an extra 850,000 subscribers in the UnitedStates alone and their shares grew to over 64 percent in 2017(Kafka P). Asurvey showed that a massive 58% of viewers continue their subscriptions forthe originals produced by Netflix (Team T). With more subscribers means more money,in turn leading to increased funding for these on demand shows. Another graphis included below, this one to show the steady rise of subscribers domestically(bright red), internationally (dark red), and total (black). Netflix’suse of Big Data doesn’t really concern me. Other than the slight grievous Istated above for the choice to customize the genres on the home screen, I’mfine with the personalization and suggested movies/tv shows that Netflix givesme.

Each new recommended show sent my way hasn’t been wrong for me yet. Thealgorithms are definitely doing what they’re put in place to do. Most people Iknow ae happy with their service and from what I gather will continue to use itwell into the future.

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