Marketing Final Project Team 11
- 2. Who We Are “We are about the freedom of on-demand and the fun of indulgent viewing. We are about the flexibility of any screen any time. We are about fantastic content that is only available on Netflix. “ Reed Hastings, Netflix CEO Brand Value Through a Lean Approach they achieve a Global and High-Quality Brand Value Proposition • Originality • Convenience/usability Device/Platform accessibility Large variety of movie selection and series • Price: unlimited streaming for a relatively low cost Global Market Share • Online Streaming leader. • Over 40 countries with more than 50 million subscribers
- 3. Who We Are Online Streaming Disc by Mail • USA Market: 37.2 M subscribers • International Market: • Canada - 3 M • Latin America - 310,000 • Europe - 20% of Netflix’s total market • Future market - Asia • Operating systems - IOS, Android and Windows • Smart TVs • Media boxes - Amazon FireTv, Apple Tv • $7.99/ month - one dvd per time • $11.99/ month - 2 dvd per time • $7.99/month - unlimited streaming + through dynamically continuous innovations (since 2014) • $11.99/ month - unlimited streaming up to 4 screens Marketing Mix Price Place Product Core Product Augmented Product Actual Product • Access to video content • Unlimited streaming • Several users at the same time • Monthly fee subscription • No late or shipping fees • Movie recommendation/customization • Exclusive content • Online streaming • Disc rental by mail Promotion • Direct Response Marketing • Emotive Marketing • Word of Mouth • First-mover-advantage/Blue Ocean • Functional Area Strategy • In-house Content
- 4. Who Our Customers Are Traditional Disc Delivery • Older people • Willing to wait to meet their expectations • They expect a rich viewing experience • Niche market Online Streaming • Younger/ Internet savvy • Value easy/immediate access • Portability and accessibility of the product Geographical Segmentation Regional (US, Europe) Demographic Segmentation Age (18-59) Psychographic Segmentation Through the likes/interests specific genres can be recommended Behavioral Segmentation Occasional (special occasion, holidays, seasonal) User status (potential users, frequent user, first time users) Micro Segmentation “Each campaign is meant to target and appeal to the specified tastes, needs, wants, and desires of the small groups and individuals that make up the microsegment"
- 5. Who Our Competitors Are Traditional Disc Delivery Indirect Competitors Pros Cons Vudu Access to new movies as soon they are released on DVD Instead of $12 person Cinema you can get have everyone for $4.99 minimum Movie to movie basis is very expensive when compared to monthly fees models Target Ticket Similar to Vudu Itunes Similiar to Vudu GooglePlay Similar to Vudu Amazon Instant Video Similiar to Vudu HBO GO* Access to High quality HBO It requires cable connection • Redbox - >50% Market share • BlockBuster - Filled for bankruptcy (Netflix lost more than 50% of its customers since 2012) All of these compete in a slightly different market once it is paid per movie instead of monthly Online Streaming
- 6. Who Our Competitors Are Direct Competitors Pricing Market Share Amazon Prime instant video Both compete in a monthly fee basis Both produce original content 99$/year 2% “HBO Linear” HBO is known by the quality of its content NA Hulu $7.99 10% Netflix has 89% of the Online Streaming Market “…industry experts favor Amazon, citing the e-commerce giant’s scope, scale, and ability to crush competitors.” ”…Amazon Prime Instant Video marks a turn in the online streaming tide, a turn that could eventually be deadly for Netflix in the long run.” Forbes, 2014 “Starting back in 2011 we started saying that HBO would be our primary long-term competitor, particularly for content.” Reed Haastings, Oct 2014, variety.com
- 7. Strenghts Weaknessess Opportunities Threats Brand Recognition • The Netflix brand is very well known - best Brand equity of the Year 2014 for video streaming subscription • Fastest rate of brand equity increase (Harris Pol EquiTrend Brand of the Year 2014) Accessibility • Netflix is available on nearly all internet enabled devices Original Content • It allows customization • Increase customer acquisition to high quality content Cost of Content • High cost of mass licensing packages and the in-house original content production forced Netflix to have large amount of debt DVD Subscribers • More than 50% decrease since 2012 - 15M to 6 M Raising Subscription Prices • Customer satisfaction highly influenced by rising prices as proved in 2011 International Expansion • The ability to create original content will enhance international growth. Original In-House Programming • With many house-hold entertainment devices connected to the internet, there is an opening for internet tv and Netflix’s exclusive in-house content poises the company for that demand. Word-of-Mouth Campaigns • It is an effective method for customer acquisition - one of the main marketing goals of Netflix ISP’s • Netflix accounts for about 30% of daily internet traffic. With net neutrality laws struck down, Netflix may have to assume more debt or cut content. Competition (Amazon Prime, HBO,Hulu) • Both Amazon and HBO produce their own content and Hulu compete with Netflix on the online streaming platform market. Content Price • Lack of leverage makes the price of licensing and renewing those license agreements remain to be the largest threat to the company’s ability to operate at a profit. SWOT Analysis
- 8. NOT A BLUE OCEAN ANYMOREUNLESS
- 9. UNLESS Keep on the In-House Production • Keeps people subscribing for longer periods • Allows Netflix to raise its prices in the future • Hedge against rising content licensing costs - (700% increase in 2 years) Start New Promotion Strategies • International Expansion (Europe, Asia) - Product and Communications Adaptation • Direct Response Marketing - based on specific content - using social media • Allow sharing content on social media platforms • Uniform features globally • Enable access to all content in local languages (audio/subtitles)
- 10. UNLESS We Change the Vision of the Product Netflix is not an add-on anymore… or extension It is a Substitute If you have Netflix you don’t need anything else Imagine a platform where you have • “IMDB’s top250” movies + best series • The best Documentaries according to YOUR preferences • The best News that YOU are looking for • The imaginary link between YOUR culture and the rest of the world Just for $8/month
- 11. Special Thanks to Professor Nick Team 11 Marketing Final Project Joao Simoes Faateh Dhillon Roshni Rajput Maria Latronico Yu Yang Rohit Gite
- 12. References • http://www.businessweek.com/articles/2014-09-11/netflix-looks-to-europe-for-streaming-growth • http://www.statista.com/statistics/250937/quarterly-number-of-netflix-streaming-subscribers-in-the-us/ • http://www.statista.com/statistics/324050/number-netflix-paying-streaming-subscribers/ • https://pr.netflix.com/WebClient/loginPageSalesNetWorksAction.do?contentGroupId=10476&contentGroup=Company+Facts • http://www.pcworld.com/article/193972/will_netflix_suffer_from_delayed_gratification.html • http://news.yahoo.com/numbers-netflix-subscribers-205626746.html • https://pr.netflix.com/WebClient/Login.jsp • http://www.internetworldstats.com/stats.htm • http://www.pewinternet.org/three-technology-revolutions/ • www.vudu.com • www.hulu.com • www.netflix.com • www.hbogo.com • http://investazor.com/2013/11/15/netflix-saga-part-1-understanding-business-model/ • http://pt.scribd.com/doc/40684328/Netflix-Strategic-Marketing-Plan • http://www.forbes.com/sites/maggiemcgrath/2014/05/06/in-the-streaming-showdown-between-amazon-and-netflix-which-is-the-better- long-term-play/ • http://en.wikipedia.org/wiki/Microsegment • http://cable.tmcnet.com/topics/cable/articles/2014/10/15/391387-hbo-will-launch-stand-alone-us-streaming-service.htm • http://variety.com/2013/biz/news/redbox-now-controls-more-than-50-of-home-video-disc-rental-biz- 1200568295#u=http://variety.com/2013/biz/news/redbox-now-controls-more-than-50-of-home-video-disc-rental-biz- 1200568295;k=pmc-adi-31bb2464aad8b905af7a81e1d57b77ae • http://netflixreport.wordpress.com/2014/02/10/swot-analysis/ • http://marketography.com/2010/11/10/online-business-beyond-genius/