Netflix was founded in 1997 in Scotts Valley California by Reed Hastings and Marc Randolph Specializes in DVD rental by mail and streaming media with monthly membership fees Available in over 190 countries ID: 639606
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Adrian ZaragozaSlide2
Background
Netflix was founded in 1997 in Scotts Valley, California by Reed Hastings and Marc Randolph
Specializes in DVD rental by mail and streaming media with monthly membership fees
Available in over 190 countriesSlide3
Business Model-DVD Rental
At its peak, Netflix operated 58 automated distribution centers
Receive the DVD in the DC, check if it works, and either ship it to another customer or store it
97% of the US customers would receive a new DVD in one
day
Many
Customers-Economies of Scale
Netflix: 23 million customers with an infrastructure of 300 million
Blockbuster: 1.3 million customer with an infrastructure of 300 millionSlide4
Business Model-DVD Rental
125,000 unique DVD titles
Long TailSlide5
Business Model-Streaming
In 2007, Netflix introduced streaming media
Media is delivered to the customers straight into the customer’s electronics via the Netflix app
Smart TVs, smartphones, game consoles, DVD players, PC, TV streaming adapters (Roku, Fire Stick, Chromecast, etc)
Netflix partnered with Amazon Web Services to grow without the need to add any data centers
3.14 petabyte and growing!
Netflix licenses media from the studios
CrowdsourcingSlide6
Data Data Data
Netflix has access to a tremendous amount of data!
DVD Rental Service
Cinematch
Netflix tracks the customer’s queue and rental history
Customer writes a review on the movie/show
Netflix is better able to recommend media to the customer
Helpful with demand planning for dvd copies
Streaming
Viewing history
Recommend media to the customer based on the viewing history
Target each customer with a specific trailerSlide7
Data Data Data
Investments
Looks at actors’ names and title genre to estimate the audiences in Netflix for a new show
Renewals
Original Content
Monitor customer attitudes toward a series over time to determine new original content investments
Flash Storage
Nightly analysis to determine which titles will be in high demand the next day and uses flash storage, more expensive but faster than hard drivesSlide8
Challenges
DVD Rental Service
Netflix vs Walmart vs Blockbuster
Dying service
Streaming
Competition from Amazon Prime, Hulu, Budu, Crackle, HBO, etc
Licensing costs and limited availability of movies/shows compared to dvd rental service
Longest tail to a long-enough tail
International license
Windowing
Bandwidth capsSlide9
Opportunities
Deals for complete ownership of the media
Generate more revenue streams
More original content
China would help Netflix increase its members
iQiyi licensing dealSlide10
Question 1
In the early stage, which company was becoming a threat to the DVD rental service?
A. Amazon
B. Comcast
C. Blockbuster
D. Red BoxSlide11
Question 2
Which software did Netflix use to gather and filter the media reviews?
A. Cinematch
B. Crowdsourcing
C. Amazon Web Services
D. iQiyiSlide12
Question 3
Where was Netflix founded?
A. Palo Alto, CA
B. Scotts Valley, CAC. Los Gatos, CA
D. Los Angeles, CA