Lauren J Uphouse November 5 2012 CLICK Analysis SWOT Analysis Strengths Brand recognition Producing original TV series ex House of Cards with prominent actor Kevin Spacey Extensive customer data on file ID: 158317
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Slide1
Netflix
Lauren J. Uphouse
November 5, 2012Slide2
CLICK AnalysisSlide3
SWOT Analysis
Strengths
Brand
recognition
Producing original TV series ex:
House of Cards,
with prominent actor Kevin Spacey
Extensive customer data on file
DVD rental cost so low that competitors don’t bother trying to emulate that part of their business.
App is on all platforms – even the Kindle (device made by competitor Amazon)
Partnered with start-up
eyeIO
as their 1
st
customer – using their encoding technology to lower bitrate of their HD video streams, which helps them in the mobile market
Weaknesses
Older
titles
Expired contracts with Sony & Stars, resulting in lost videos
Lost video provider EPIX to Amazon.
Competition has more money
Damaged reputation after attempting to increase fees and separate DVD & streaming video memberships.
Revenue is still rising but streaming & subscribers are slowing = growth is slowing.
Opportunities
Collaborate with well
-known actors to create more original series
Bid for more popular TV titles
Target/market to kids & young adults
International expansion
Partner with companies to develop Netflix programs specific to their platforms that will come pre-installed on all their devices
Partner with cable & gaming companies to be an on-demand option for video & games.
AppleTV Partnership
Threats
Competitors offering streaming video
and bidding for exclusive rights ex: Amazon, HBO, TV networks
Competitor partnerships (ex: Amazon &
Epix
)
Higher licensing costs
Biggest competitor, Amazon, now developing original programming
Streaming video increasing; DVD rentals decreasing
Movie & TV industry less willing to make exclusive deals with online video services.
EPIX provides Disney videos to Amazon; Disney recently acquired
Lucasfilm
(& entire
StarWars
franchise).Slide4
Competitor AnalysisSlide5
ADVANTAGES
DISADVANTAGES
Customers rent DVDs thru mail;
Redbox
– Must rent from kiosks.
More older titles.
Offers streaming video service.
Offers TV shows
Low monthly subscription costs & no late fees attractive to customers;
Redbox
– DVD rental fee $1/day.
Website has a more advanced customer rating & recommendation system.
Developing original content.
More partnership opportunities.
Shipping costs for DVD rentals.
Redbox
has newer titles.
Redbox
offers video game rentals & event ticket printing.
Customers must make a commitment to use service.
Can’t profit from long-term rentals/late fees.
Customers must wait to receive DVDs;
Redbox
– Can get DVDs same day.
Company as a whole has more competition.Slide6
ADVANTAGES
DISADVANTAGES
More titles; DVD rental service.
No ads/commercials in video content.
Hulu
-Plus – Most videos contain ads.
Content available on all devices.
Hulu
currently doesn’t have rights to make all of their video content available on all devices.
Customer recommendation system.
Developing original content.Available on more devices. Hulu.com – PC environment only. Hulu-Plus – Accessible on fewer devices. Available in more countries.Charges fee for all content. Hulu.com offers limited content for free & offers more content thru Hulu-Plus for $7.99/month.Older titles. Hulu offers current TV shows – new episodes available day after airing.No social media integration.Slide7
ADVANTAGES
DISADVANTAGES
More titles; DVD rental service.
Monthly subscription that can be canceled/frozen any time. Amazon Prime - $79/year, paid in full.
Higher quality video playback.
Better customer recommendation system, user interface & organization.
Growth of international expansion.
Focused solely on video services = benefit to customers.
Partnership with Apple; soon possibly cable companies as well.
AmazonPrime
membership includes free 2-day shipping & instant access to e-books (on Kindle).Revenue only from video services. Amazon – Business model generates revenue many ways.Losing exclusive partnerships with online video distributors, some directly to Amazon Prime (ex: EPIX).Amazon offers additional online videos, including new movies & TV episodes, that can be purchased individually or as a package and are accessed from the same location as Amazon Prime videos.Slide8
KP
Key Partners
Apple
RADius
-TWC
Twentieth Century Fox
Hasbro Studios
Warner Bros
Stakeholders, such as Carl Icahn, & their affiliates
KA
Key Activities
DVD Rent-by-Mail Service
Online Video Streaming Service
VP
Value PropositionDVD Rent-by-Mail Service – Cost so low not worth competingExtensive customer database, 10+ years deep.Original contentPartnership with Apple; soon possibly cable companiesAccessible on greater number of devicesAdvanced technology for better quality video playbackCR Customer RelationshipsFree trials/sign-up dealsConvenient sign-up thru many devicesPre-installation on devicesAggressively working to improve content & playback qualityRecommendation SystemCS Customer SegmentsAppleTV ownersOwners of Windows 8 devicesAdults, families, kidsBenefits from long tail: Classic TV/Movies, Documentaries, Adult Animation, Stand-Up Comedy, Romantic Comedies, Action/Sci-FiKR Key ResourcesExperience of Management & Board of DirectorsStockholdersExtensive customer databaseCH ChannelsOnline, print, & direct mail marketingPre-installation on devicesGift subscriptionsOffers to friends/family of members
C$ Cost StructureR$ Revenue StreamsDVD Rent-by-Mail Plans (per month)1 DVD: $7.99 or $9.99 with Blu-Ray2 DVDs: $11.99 or $14.99 with Blue Ray3 DVDs: $15.99 or $19.99 with Blue Ray1 DVD (2 max per month): $4.99 or $5.99 with Blue RayVideo Streaming Plans (per month)Unlimited: $7.99Limited: $4.99FIXED PRICING STRATEGY; FREE TRIAL OFFERS
Business Model CanvasSlide9
Alternative Business ModelsSlide10
References
Roettgers
, J. (2012, February 01).
Eyeio
: Netflix's
secret
weapon against bandwidth caps?
. Retrieved from
http
://gigaom.com/video/eyeio-video-encoding-netflix
/Martin, S. (2012, October 12). Netflix rivalry with amazon heats up. USA today, Retrieved from http://www.usatoday.com/story/tech/2012/10/11/amazon-netflix/1621579/Bedigian, L. (2012, October 31). Netflix lost star wars 13 months ago. Retrieved from http://community.nasdaq.com/News/2012-10/netflix-lost-star-wars-13-months-ago.aspx?storyid=185982Holmstrom, M. (2012, October 31). Why you should not buy netflix. Retrieved from http://seekingalpha.com/article/964251-why-you-should-not-buy-netflixWarren, C. (2012, March 09). Netflix's apple tv deal could signal new business model. Retrieved from http://mashable.com/2012/03/09/apple-tv-netflix-subscriptions/(n.d.). Netflix_large_verge_medium_landscape. [Web Photo]. Retrieved from
http
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netflix_large_verge_medium_landscape.jpg
(n.d.). netflix-branded-xbox-360. [Web Photo]. Retrieved from http://learnfrenchsoftwarereview.org/wp-content/uploads/2012/01/netflix-branded-xbox-360.jpg(n.d.). Applenetflix. [Web Graphic]. Retrieved from http://1.bp.blogspot.com/-_iUTPj8GBuA/UEeY1qwdxcI/AAAAAAAAATo/2Htm5N8CQzA/s1600/AppleNetflix.jpg(n.d.). Prime_vs_netflix-650x163. [Web Graphic]. Retrieved from www.gadgetreview.com(n.d.). Hulu_vs_netflix_big-650x541. [Web Graphic]. Retrieved from http://www.gadgetreview.com/wp-content/uploads/2012/01/Hulu_vs_netflix_big-650x541.jpg(n.d.). Redbox_vs_netflix-650x129. [Web Graphic]. Retrieved from http://www.gadgetreview.com/wp-content/uploads/2012/01/Redbox_vs_netflix-650x129.pngwww.netflix.comwww.hulu.comwww.redbox.com