Marketing principles report analysis of netflixs marketing strategy

In 2013, Netflix expanded into producing, programming, anddistributing online.. As of 2017, Netflix''''s headquarters are located in Los Gatos,California, USA.Netflix''''s initial business mod

VIET NAM NATIONAL UNIVERSITY HO CHI MINH CITY UNIVERSITY OF ECONOMICS AND LAW

MARKETING PRINCIPLES

Report: Analysis of Netflix's marketing strategy Lecturer: Mr Phùng Thanh Bình Course code: 222FB9108

GROUP NAME: NHÓM 06 MEMBER’S NAME:

1 Truong Cong Minh Khang (K214132027)

2 Tran Thi Phuong Lan (K214132031)

3 Nguyen Thi Hong Loan (K214132032)

4 Tran Thi Thao Tien (K214132047)

5 Nguyen Thanh Tan Tue (K214132051)

HO CHI MINH CITY – 2023

Table of Contents

I OVERVIEW 3

1 Overview of Netflix 3

2 Goal, Vision and Mission 5

3 Business model Canvas 8

4 Overview of Netflix website and app 8

II ANALYSIS OF ENTERPRISE 10

1 Netflix's market analysis 10

1.1 Market Segmentation of Netflix 10

1.2 Targeting of Netflix 16

1.3 Positioning of Netflix 18

2 SWOT model analysis 19

2.1 Strengths 19

2.2 Weakness 20

2.3 Opportunities 21

2.4 Threats 21

3 Competitor analysis 22

3.1 Amazon 23

3.2 Hulu 24

3.3 Disney + 25

III MARKETING STRATEGY ANALYSIS 27

1 Netflix's Marketing Strategy on Product 27

2 Netflix's Marketing Strategy on Price 31

3 Netflix's Marketing Strategy on Place 34

4 Netflix's Marketing Strategy on Promotion 35

IV NETFLIX ISSUES 37

1 Quality issues 37

2 Issues with customer experience 39

2.1 Lack of local television programs 39

2.2 Dependence on internet connectivity 40

2.3 No support for Vietnamese subtitles or dubbing 40

2.4 Payment methods are still quite "Western" 40

V CONCLUSION 41

VI REFERENCE 42

Netflix's initial business model included selling and renting DVDs, althoughHastings stopped DVD sales about a year after realizing that Netflix wouldfocus on DVD rental through email In 2007, Netflix expanded its business byintroducing online streaming media, while retaining its DVD and Blu-ray rentalservices In 2008, the company expanded globally, marking the provision ofstreaming services in Canada As of January 2016, Netflix's services operate inmore than 190 countries worldwide.

The history of formation and development

Netflix was founded on August 29, 1997 in Scotts Valley, California byMarc Randolph and Reed Hastings The idea came to Hastings after he had topay a large fee to rent a movie He wanted to provide a rental service that wasnot only low-cost, but also easy to access Randolph suggested applying theinternet to Hastings' idea They agreed to rent DVDs over the internet, and sendthe discs through the mail or email They started a business with that idea, alongwith 30 employees, and gradually forced the modern entertainment industry toadapt to the new model

Netflix was first introduced on April 14, 1998 with just 925 DVDs availablethrough a pure rental model: rent first - pay later, with fees similar to their

launched a monthly subscription service and at the beginning of 2000, Hastingsdecided to cut the single rental model Since then, Netflix has gained areputation for its business model that not only offers unlimited access but alsofree shipping, rental for each individual viewing.

In 2000, Reed Hastings proposed selling Netflix to Blockbuster for $50million, but the offer was rejected by John Antioco, the then-CEO ofBlockbuster

On May 29, 2002, Netflix went public, selling 5.5 million common shares at

a price of $15 per share On June 14, 2002, the company sold an additional825,000 common shares at the same price After several years of losses, Netflixannounced its first profit in 2003, earning $6.5 million in net income on $272million in total revenue By 2005, Netflix had a library of 35,000 different filmsand was shipping millions of DVDs each day

Netflix developed and maintained a personalized video recommendationsystem based on customer ratings and reviews On October 1, 2006, Netflixawarded a $1 million prize to the first developer of a video recommendationalgorithm, beating out the Cinematch algorithm at the time

By February 2007, Netflix had shipped billions of DVD discs, and fromhere, the company began to shift away from its core DVD disc business model

to introduce on-demand video streaming over the internet

However, in 2011, Netflix faced a serious crisis Prior to that, over a span of

4 years, internal disagreements between Hastings and many senior leaderswithin the company led to Netflix losing a series of dedicated and talentedpersonnel, who were the "cong than" who contributed to building the Netflixempire from the beginning The company's stock price fell by 77%, and they lost800,000 subscribers Things started looking up when Netflix decided to expandits investment into the production of exclusive TV shows and movies In 2013,the 13-episode TV series "House of Cards" produced by Netflix was nominatedfor 9 Emmy Awards and won 3 Moreover, it is the highest-rated TV show inthe United States up to this point All 13 episodes were released at the sametime, and viewers were not interrupted by any advertisements In Netflix'sJanuary 2013 report, an additional two million U.S customers had signed up forNetflix in Q4 of 2012, bringing the total number of users to 27.1 millionglobally out of 29.4 million customers

Additionally, revenue increased 8% to $945 million during the same period.That number increased to 36.3 million subscribers (29.2 million in the U.S.) inApril 2013 As of September 2013, Netflix reported in its Q3 report that the totalnumber of global subscribers had reached 40.4 million (31.2 million in theU.S.) By September 2014, Netflix had subscribers using their service in over 40countries and was planning to expand to countries worldwide At the 2016Consumer Electronics Show, Netflix announced that it was expanding its service

to 150 more countries Netflix stated that with this expansion, the companywould operate in most countries in an official and legal manner Also in January

2016, Netflix announced that it would begin blocking virtual private networks(VPNs), which are networks used to connect computers with each other via apublic Internet network Computers that participate in a virtual private networkwill "see each other" as if they were on an internal network

Netflix reported having 74.8 million subscribers and predicted that thisnumber would increase by 6.1 million by March 2016 By the end of 2016,Netflix had added a new feature allowing customers to download and streamselected movies and TV shows even when offline

In February 2017, Netflix signed a music publishing contract with BMGRights Management, where BMG would oversee Netflix's audio copyrightissues outside the US On April 17, 2017, the number of Netflix subscribersreached nearly 100 million On April 25, 2017, Netflix announced that it hadreached a licensing agreement in China with Baidu's online service iQiyi,allowing for the distribution of Netflix's original content on the platform OnAugust 7, 2017, Netflix announced on its website that it had acquired thepublishing company of comic book author Mark Millar According to The NewYork Times, Netflix announced that they had signed an exclusive developmentdeal with Shonda Rhimes in mid-August 2017

2 Goal, Vision and Mission

Goal

Netflix's main goal through its marketing campaigns is to increase salesrevenue However, increasing sales revenue is not just about selling more

14

and TV programs, and pricing that is appropriate for customers At the sametime, the company also needs to enhance interaction with current customers bymeeting and providing for their entertainment needs To increase brandawareness, Netflix needs to focus on building a reliable and reputable brand,while conveying the company's values and vision Creating a strong brand willhelp Netflix attract potential customers and retain current customers Drivinguser engagement through marketing campaigns, the company can use marketingcampaigns to encourage users to sign up, download the app, and order movies,

TV shows, and other online content Additionally, Netflix can also usemarketing campaigns to increase reach and strengthen sharing Netflix canintroduce new, prominent content to attract the attention of audiences andencourage them to share their experiences with others This will help thecompany increase access to new customers, while enhancing the contributionand interaction of the user community with Netflix's content Creatingmotivation for users to try new products, one of Netflix's advantages is theability to release new and exclusive movies, TV shows, and online content.However, introducing these new products is sometimes not enough to attractnew customers Netflix can use marketing campaigns to create excitement andpassion for customers to try the company's new products

Vision

“Becoming the best global entertainment distribution service Licensingentertainment content around the world, creating markets that are accessible tofilmmakers and helping content creators around the world to find a globalaudience.” The vision statement is all about what the company wants toachieve It stresses the desire to set a quality bar in the provision of on-demandvideo services

The approaches adopted by Netflix in its operations confirms that thecompany is not looking to settle being a conventional entity In fact, it hasalready set itself a growth pace higher above the normal To stay abreast of thisscale, Netflix remains vibrant adopting the latest user-friendly features that giveits customers the best experiences with the content they love These are notlimited to entertainment, as it also ensures investors are comprehensively

Giao dịchthương… 100% (1)Trading HUB 3Xác suấtthống kê 96% (28)

36

approaches In this way, Netflix has elevated itself as a company for the rest toemulate.

Through its integrated and customer-oriented approaches, Netflix haspositioned itself as a global establishment as a way of fulfilling this component

in its vision statement The major aspect that draws attention to this feat is thestrategic incorporation of inclusion and diversity in its operations Theunderstanding of the varied member base the company serves is a strengthNetflix exploits in ensuring that the content it produces accommodates all thecultural backgrounds innovatively

Mission

“We promise our customers stellar service, our suppliers a valuable partner,

our investors the prospects of sustained profitable growth, and our employeesthe allure of huge impact.” The statement resounds what the company is bestknown for providing outstanding and unparalleled video entertainment services

It also shows how the company balances the satisfaction of its customers withthe financial needs of its other stakeholders An analysis of this missionstatement:

Improving lives: The commitment towards having an impact on societiesover and above entertaining them is a factor that Netflix holds with high regard.The company links its operations to programs that ensure it satisfies itscorporate social responsibilities by contributing to the overall improvement ofpeople, environment, and economies For instance, Netflix has been recognizedfor stimulating a sustainable model adopted by other companies across the globewith worthwhile impacts on communities and the environment

Exceeding expectations: It is true Netflix does not take its customers forgranted The stability and reliability that characterize its platform, together withthe accompanying services proves beyond doubt that Netflix is a distinguishedcompany What’s more is that, in comparison to the subscription charges, theservices it offers its customers are definitely a ‘bumper-like harvest’ for theclients And, there is no compromise on quality either

Delivering excitement and entertainment: Netflix acknowledges the changing dynamics of entertainment in the contemporary era, especially with ashift away from linear TV To fill this gap, the company brings its customers

ever-and investors a dynamic system that meets all their entertainment needs Forinstance, Netflix brings a variety of entertainment options including internetentertainment apps and other online systems Through these channels, thecompany feeds its customers with limitless content to keep them excited andenjoying every moment.

3 Business model Canvas

4 Overview of Netflix website and app

Netflix on the Web

Netflix's web interface adopts a dark background with white text andprominently features large media thumbnails, providing an elegant and easilynavigable user experience The top menu sections include Home, TV Shows,Movies, Recently Added, and My List, while the upper right-hand corner offerssearch functionality, profile management, account settings, and access to

options, including email communications, closed captions, parental controls, andplayback settings, surpassing those offered by most other video streamingservices Additionally, users can view their recent viewing and streamingactivity, detailing devices used and timings We encountered no performanceissues with the web interface.

At the Home tab, prominent content is displayed at the top, and the rest ofthe page presents a multitude of horizontally scrolling lists of shows and moviesclassified under categories such as New Releases, Popular on Netflix, andTrending Now However, when hovering over any content, a video preview withsound plays, which we find bothersome and would appreciate the option todisable Further details, such as available episodes, a percentage-basedrecommendation based on viewing history, and the ability to rate content withthumbs up or down, are revealed upon clicking on an entry Users can also addcontent to My List to save their desired shows and movies

Users can broadly sort the Shows and Movies sections by genre and filter thecontent lists based on recommendations, release year, and alphabetical order.Curiously, Netflix's originals have no dedicated category in the TV Shows orMovies genre lists; instead, users must scroll down to a horizontally scrollingsection to find them As Netflix's library is continually evolving, the inclusion ofinformation on when a particular show or movie is available would bebeneficial, along with an option to set reminders for the expiry of such content.Netflix runs a site called Tudum that offers companion content for itsoriginal shows and movies, but recently experienced layoffs that have hinderedits ability to create online communities Although HBO Max already providescompanion podcasts for its original content, Netflix's initiative seems gearedtowards replicating the community features of Mubi, which encourages memberconversations and provides supporting editorial content, such as interviews andlong-form features

Netflix on Mobile

We encountered no issues while installing or logging in to Netflix's Android

or iOS apps on our test devices The app closely resembles the web interface andfunctions seamlessly Navigation within the app is carried out via five iconslocated at the bottom of the screen, including Home, Search, Extras, Downloads,

and More Netflix's iPhone app offers the same features as its Androidcounterpart and looks similar, although with minor navigational differences Forinstance, the iOS app lacks the Extras icon in the bottom menu bar.

Netflix's download feature, which allows select titles to be downloaded foroffline viewing, is also available on the mobile apps The Downloads tab showsall content designated for offline viewing, but no search functionality isavailable During our testing on PCMag's fast Wi-Fi network, it took less thantwo minutes to download a 50-minute episode of Planet Earth II in high quality.However, some titles may expire after 48 hours, and others may haverestrictions on the number of downloads

The Home tab enables sorting by TV Shows or Movies, in addition toaccessing My List entries The Extras section showcases previews of new andnoteworthy content based on the user's viewing history The More tab houses allessential app settings, including Netflix's Smart Downloads feature, whichfacilitates binge watching Upon completion of a downloaded episode, Netflixautomatically removes it and initiates the next download in the series In ourtesting, this feature performed well Users can also manage network streamingpreferences and profiles from this section

II ANALYSIS OF ENTERPRISE

1 Netflix's market analysis

1.1 Market Segmentation of Netflix

Netflix's business community is always seeking indications of innovationand customer behavior changes According to a survey conducted by Hannah,over 2.7 million Australians use Netflix for watching movies and TV shows.Multiple methods are available for segmenting markets in the videostreaming sector However, customers have a highly diverse range of age,wealth, location, and viewing preferences, leading to a variety of marketsegmentation approaches over time No two divisions will be the same in terms

of properties such as quantity, generosity, openness, distinguishability,notability, and, crucially, productivity

1.1.1 Netflix Demographic Segmentation

Geographic segmentation involves dividing the market based on differentgeographic units like countries, states, cities, and neighborhoods It isparticularly useful for Netflix in international markets because customers havedifferent cultural preferences and administrative systems Additionally, iftransportation cost is a crucial factor in delivering value, geographicsegmentation is advisable as serving customers in different locations can havevastly different costs

In the United States, Netflix is significantly more popular among youngerconsumers than older generations According to a recent survey, approximately75% of respondents aged 18 to 34 had a Netflix subscription as of mid-2021,compared to only 44% of those aged 65 or above

Netflix predicts further subscriber loss

Netflix, the leading subscription video-on-demand (SVOD) service globally,

is currently experiencing a decline in its subscriber base Despite its vastpresence in over 190 countries, with millions of users from various age groupsand backgrounds accessing its platform daily, Netflix has reported a subscriberloss of approximately 200 thousand in the first quarter of 2022 This is the firsttime in over ten years that the company has experienced a decline in usernumbers, and according to the company's reports, this trend is likely to continue

in the second quarter of the year, with an expected loss of two millionsubscribers by mid-2022

Cracking down on password sharing

Sharing login credentials has become a fundamental aspect of the demand (VOD) experience In today's competitive streaming market, companiesdifferentiate themselves by enabling users to create multiple profiles and dividesubscription expenses with others in their household, which appeals to youngeraudiences in particular Although Netflix was one of the first services to offervarious subscription options at different price points, the company recognizesthat millions of individuals share their login information without paying foradditional accounts In 2021, Netflix suffered an estimated loss of $1.07 billion

video-on-in revenue due to password sharvideo-on-ing As a result, the company announced video-on-in

2022 that it would charge extra sub-account fees for people streaming contentoutside the primary account holder's residence.

Figure : Share of adults with a Netflix subscription in the United States as ofAugust 2021, by age group Source: Statista 2023

1.1.2 Netflix Geographic Segmentation

In the past, the majority of Netflix users were in the United States, but this is

no longer true Currently, the number of Netflix subscribers is almost evenlydistributed between North America and Europe, Africa, and the Middle Easttogether Latin America and the Asia Pacific region have fewer subscribers incomparison

Figure : Number of Netflix paying streaming subscribers worldwide as of1st quarter 2022, by region Source: Statista 2022

It is noteworthy that the Asia Pacific region has experienced the mostsubstantial rise in the number of Netflix subscribers in the last few years In

2020, there was a 65% surge in subscribers, accompanied by a 62% increase inrevenue On the other hand, Netflix has already achieved significant marketpenetration in the US, with 70% of households with broadband subscribing tothe streaming platform This indicates that the US market is fully developed andhas limited potential for growth, unlike emerging markets such as Asia

Figure : Number of Netflix Subscribers in 2022/2023: Growth, Revenue,and Usage Source: CNN 2021, Variety 2020

1.1.3 Netflix Behavioral Segmentation

Buyer segmentation based on behavior divides consumers into differentgroups based on their attitudes, product knowledge, usage, and other responses

to a product Many marketing experts believe that behavior variables are aneffective starting point for creating consumer segments For instance, in the case

of a service, a Freemium model is a more efficient segmentation strategycompared to geographic, demographic, or psychographic variables Thissegmentation based on behavior can help an organization focus on essentialfeatures and provide customers with the features that they are more likely to use.Consistent engagement results in higher customer satisfaction rates and a highnet promoter score

Netflix has used usage rate segmentation based on visits to understand theplatform's usage in every country This segmentation created categories such asLight users, who visit Netflix once or twice a month, Medium users, who visitapproximately two to ten times a month, and Heavy users, who visit Netflixmore than ten times a month The findings of this segmentation are presented inthe following chart:

Figure Source: Vanessa Castro, Netquest 2019

In the United States, 35% of the panelists are categorized as Light users,indicating that they access the platform only once or twice a month Mediumusers constitute 45% of the panelists, while Heavy users, who access theplatform more than ten times a month, make up almost 20% of the panelists.Similarly, in Spain, 35% of the panelists are Light users, 45% are Medium users,and 20% are Heavy users In the UK, 38% of the panelists are Light users, 42%are Medium users, and 20% are Heavy users

According to Netquest (2019), they are unable to utilize the personalinformation of Netflix panelists to obtain further insights about them However,Netquest possesses an "identifier" that identifies the individual responsible foreach online visit: the panelist ID As these visitors are Netquest panelists, theyhave access to abundant profile data that they can utilize, all associated with adistinct panelist ID.

Figure Source: Vanessa Castro, Netquest 2019

1.1.4 Netflix Psychographic Segmentation

Netflix has a vast target market, encompassing all age groups andsocioeconomic levels To appeal to a broad range of psychographicsegmentations, Netflix offers a diverse range of content on its platform,including children's entertainment, documentaries, rom-coms, action movies,and comedy The streaming service has a diverse consumer base consisting ofpeople from various backgrounds and age groups Netflix strives to attract abroad range of psychographic markets, catering to different genres such asromantic comedies, action-adventure films, documentaries, and comedies Thepandemic-related restrictions have led to a substantial increase in Netflixviewership, with the platform holding the largest share of streaming minutes inthe U.S at 34%, as per Daniel's report in 2022

Psychographic variables are a set of lifestyle-oriented interests, activities,and opinions that are used to categorize individuals in the marketing world.Netflix can utilize psychographic segmentation to categorize potential buyersinto different segments based on their personality traits, consumption patterns,opinions on social issues, hobbies, and many other dimensions Psychographicsegmentation is effective because individuals in the same demographic groupmay have diverse psychographic characteristics based on their life experiencesand upbringing VALS is one of the most commonly used consumer behaviorframeworks to conduct consumer psychographic analysis This segmentationmethod classifies America's adult population into eight distinct subgroups,namely Innovators, Thinkers, Achievers, Experiencers, Believers, Strivers,Makers, and Survivors.

1.2 Targeting of Netflix

Netflix, a leading online television network, has over 100 millionsubscribers in 190 countries who view more than 125 million hours of TVshows and movies every day The company uses demographic, behavioral, andpsychographic segmentation to target its consumers In terms of demographics,Netflix primarily targets young adults, teenagers, and low-to-middle-incomefamilies The streaming service's broad selection of foreign and internationalfilms also attracts viewers from diverse cultural backgrounds Behavioralsegmentation is used by Netflix to provide personalized content to over 100million users each day The streaming service employs Machine Learning tolearn about its subscribers based on their usage patterns Netflix stores thisinformation and uses it to segment its users into groups based on their behavior,allowing the company to provide a more customized viewing experience.Netflix is the top internet TV network globally, with 100 million subscribersacross 190 countries who watch 125 million hours of TV shows and movieseach day Netflix focuses on target customer analysis using demographics,behavioral intentions, and psychographics Demographically, Netflix targetsyoung adults, teenagers, and low to middle-income families Its diverse selection

of foreign and international films also attracts a wide range of ethnic and racialgroups Netflix uses behavioral segmentation, powered by machine learning, topersonalize content for its 100 million subscribers by learning about their

behavior on the streaming platform This allows Netflix to segment customersbased on their actions and provide them with a more personalized viewingexperience For instance, Netflix can recommend content based on thecustomer's viewing history In terms of psychographics, Netflix targets threemain groups:

- Individuals who have a busy lifestyle and cannot make time to go to thecinema or shop for DVDs

- Movie enthusiasts who frequently rent movies and seek a diverse selection

of content, from major Hollywood productions to lesser-known internationalfilms

- Customers who prioritize getting the best value for their money Thesevalue seekers seek affordable prices and convenience, and want to watch movieswithout any interruptions from advertising Since its inception, Netflix has beensuccessful in attracting customers who are value-conscious, and they make up asignificant portion of the company's subscriber base

Furthermore, Netflix primarily focuses on targeting the younger generation

of viewers, particularly the millennial age group However, in addition toindividual users, it also aims to appeal to middle and high-income families Overthe past decade, people's lifestyles and entertainment preferences have evolvedsignificantly Nowadays, most individuals seek entertainment that is easilyaccessible anytime and anywhere A considerable number of millennials accessentertainment through the internet, with social media being the most popularplatform for engagement Nevertheless, other online entertainment channels,including Netflix, have also succeeded in attracting a significant number ofmillennial users

As per the Netflix Annual Report (2017), the biggest revenue generator forthe company is the US market However, the company operates in threedifferent segments including domestic streaming, international streaming, anddomestic DVD Netflix is also investing heavily in the creation of new andoriginal content, having spent $981.3 million on research and development in

2017 In addition, the company uses paid marketing channels to promote itsservices In 2017, Netflix spent approximately $1.28 billion on advertising, with

$1.1 billion going towards advertising expenses

Netflix utilizes social media platforms as an essential marketing tool tointeract with its loyal customers and to showcase its latest programs to a globalaudience Facebook plays a significant role in its social media marketingstrategy, alongside Twitter, YouTube, and other platforms to promote itsproducts and brand The company's multichannel marketing approach has beensuccessful as its number of subscribers has exceeded 139 million As of the firstquarter of 2019, over 148 million paid subscribers across more than 190countries enjoy Netflix's services, with around 60 million paid streamingmembers in the US and approximately 88 million internationally Netflix hascreated a highly desirable online experience and offers audiences more thanwhat they expect.

1.3 Positioning of Netflix

Netflix offers a vast library of legitimate movies and TV shows, coupledwith a personalized recommendation algorithm and a smooth service that doesn'tinterrupt with ads With 24/7 streaming, users can enjoy high-quality contentfrom anywhere, whether at home or on the go Netflix offers a plethora ofoptions, including thousands of movies and TV shows, as well as originalcontent It can be accessed on a variety of devices such as PCs, TVs, mobilephones, and game consoles Another unique feature of Netflix is its "userprofiles," which allows users to personalize their account and preferences.Admin-users have the ability to modify or restrict certain users One of Netflix'skey differentiators is its release of new and exclusive series as full seasons,rather than episode-by-episode, keeping users engaged

Netflix's main objective in terms of its positioning strategy is to become theforemost subscription-based streaming platform in the global media andentertainment industry It has achieved this by providing premium quality TVshows and movies along with various functions, features, and services Currentsubscribers and potential customers view Netflix as a provider of the following:Convenience: you can watch Netflix content on your smartphone or tabletanytime and anywhere

Compatibility: Netflix content can be accessed through various devices,including smartphones and tablets running on Android or iOS operatingsystems

Fair Pricing: Netflix has designed its pricing strategy to cater to the budgetconstraints of low to middle-income subscribers globally.

Customization: Netflix offers personalized content and services to all users,regardless of their demographic or interests, making it a user-friendly platform High quality: Netflix offers high-quality content with clear audio and video.Moreover, the platform's library is regularly updated with the latest shows,series, documentaries, and Netflix Originals

2 SWOT model analysis

2.1 Strengths

Netflix's strengths enable it to plan its expansion effectively, which is anessential component of SWOT analysis The company's strengths make it one ofthe leading streaming services, including:

Brand Reputation: Netflix has quickly gained recognition and become awell-known brand in a short time In 2021, Interbrand ranked Netflix #36 with abrand value of $15.0 billion Other notable competitors on the list includeDisney at #10 with a brand value of $44.1 billion, Youtube at #26 with a brandvalue of $20.9 billion, and Spotify at #66 with a brand value of $9.8 billion.Global Customer Base: Netflix has a wide-reaching global customer base,serving over 190 countries worldwide With more than 167 million subscribers,the company has a strong bargaining power when it comes to securing exclusivecontent from studios

Affordable Pricing: Netflix's pricing strategy has provided it with anadvantage over its competitors The plans offered by Netflix are reasonablypriced and provide excellent value to subscribers For a low cost of $8.99 permonth, subscribers can watch unlimited movies on DVD or through streaming.This option is cheaper than cable movies or cinema tickets and also offers awider selection For subscribers who want a higher quality Ultra HD (4K+HDR)streaming, premium plans are available at $15.99 per month

Award - Winning Shows: Netflix's original shows have been increasinglypopular, which is not surprising Moreover, Netflix has been surpassingtraditional TV networks such as HBO and NBC in award nominations In 2020,Netflix received 160 nominations at the Emmys, while traditional TV networks

like HBO received 107 nominations, NBC received 47 nominations, and ABCreceived 36 nominations.

2.2 Weakness

While most companies have both strengths and weaknesses, they oftendevelop strategies to address their weaknesses Even though Netflix is one of theleading companies, it has a particular weakness that is impeding its growth:Limited Copyrights: Netflix's lack of ownership over most of its content ishaving a negative impact on the company The rights to the content obtainedfrom other studios expire after a few years, which means that the contenteventually becomes available on other websites

Lack of Green Initiatives: Netflix has yet to adopt renewable energy andlacks a sustainable business plan to promote environmental conservation Incontrast, other tech giants such as Amazon, Google, Apple, and Facebook havealready begun utilizing renewable energy to support environmentalsustainability and have pledged to use 100% renewable energy for theiroperations Netflix's failure to embrace green energy has a detrimental effect onits brand reputation

Growing Operational Costs: Netflix gains a competitive edge by increasingits content offerings, however, the expenses associated with supporting thiscontent continue to rise In 2019, the cost of streaming amounted to $14.61billion, surpassing the previous year's spending of $12.04 billion

Source: Statista, 2019.

2.3 Opportunities

The market is continually changing with increased demands, which helpsany company aspiring for substantial growth The need for OTT platforms isalso rising, which is a good sign for Netflix So, some of the significantopportunities that the firm can grasp from the current market are:

Exploit Ad-Based Model: Several service providers, including Google,Amazon, and Facebook, generate billions in revenue through advertisements.Netflix could increase its revenue by implementing an advertising-basedbusiness model

Expand Global Customer Base: Netflix has a substantial existing subscriberbase, making it well-positioned to extend its services to other countries andattract new subscribers The company could focus on targeting countries where

it is currently unavailable Netflix has already expanded its operations to severalnew countries, but it is still not accessible in regions such as China, Crimea,North Korea, and Syria

Refresh Content Library: To broaden its content offerings, Netflix couldenhance its licensing agreements with multiple movie distributors As the

company now produces its original content, it should also consider updating itscontent library.

Alliances: Netflix could potentially collaborate with different telecomproviders to offer bundled packages in various countries Partnering with othercompanies could prove advantageous for Netflix The company has previouslyjoined forces with Channel 4 and could explore forming additional strongpartnerships with local broadcasters

2.4 Threats

In the market, all companies face particular risks and threats With numerousOTT services available, customers have various options to choose from based ontheir preferences To maintain its position as the leading service provider,excelling in multiple parameters is crucial for Netflix However, even with thisstrategy, the company may face potential threats to its expansion As one of thelargest OTT companies, Netflix is not immune to these risks and faces thefollowing threats:

Competitive Pressure: Netflix faces stiff competition in the global digitalstreaming market, with numerous service providers increasing each year.Competitors like Disney+, Apple TV+, HBO, Amazon, Hulu, and YouTubecontinually vie for subscribers by offering a vast array of new and originalcontent

Government Regulations: Governmental regulations and policies in severalcountries can pose a significant threat to service providers like Netflix Forinstance, the company's expansion into China is unlikely due to strict restrictions

on foreign content enforced in the country

Piracy: Digital piracy remains prevalent worldwide, as thousands of peopleseek ways to download media content due to the high monthly costs ofstreaming services they cannot afford This poses a significant threat to Netflix.Account Hacking: The number of Netflix user accounts that were hackedincreased significantly in the first and second quarters of 2020, as daily userssurged during lockdown If this trend of account hacking persists, Netflix usersmay become frustrated and switch en masse to rival companies

3 Competitor analysis

Netflix products to beat the competition

Netflix makes money by offering different viewing options by region, giving

it an edge over its competitors Every month, the organization rotates throughoriginal and new titles There are tons of movies, documentaries, cartoons and

TV shows to choose from, including original Netflix titles Stranger Things andOrange Is the New Black are two of the company's most popular titles And thelist continues to expand

Financial report

Netflix posted revenue of $5.77 billion for the first quarter of 2020, in linewith the company's predictions due to the strengthening of the US dollar againstother currencies For the year, net income was $0.71 billion Those numbers are

up from the same time last year, when revenue was $4.52 billion and net incomewas $0.34 billion The Company allocates financial results for the quarter due tothree factors:

- Membership growth due to home confinement due to Covid-19precautions,

- Foreign sales fell due to a strong dollar,

- Content creation investment is postponed due to production stoppage

The landscape is changing

The streaming service of Hulu, Amazon and Walt Disney, launched inMarch 2019, as well as the subscription service of several cable channels, areamong the competitors threatening to eat Netflix's market share, includingcompetitor analysis