Streaming Wars-- the Netflix's way


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An introduction of Netflix and strategic analysis for online streaming business.

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  • 因為實體 DVD 店的倒閉 , 郵寄 DVD 市場會持續成長 , 但線上影音串流最終會取代郵寄 DVD
  • Netflix 算是內容集結的平台 , 與播放設備合作結盟 , 並尋求最低成本的網路傳輸廠商
  • February 17, 2010 HBO Go is the new service launched this week to bring paying HBO subscribers HD quality streaming shows to your computer. HBO Go had been in Beta until this week when the announcement was made. It is apart of HBO’s TV Everywhere Strategy. The library is Currently at over 600 hours of streaming online content some of which can be watched live and even in HD.
  • 寬頻公司議價能力強 , 希望 Netflix 哄抬價格增加其獲利 Internet service provider ( ISP ), Pricing by per giga (Akamai:$0.15/G, $0.6/G ) Hulu: Disney, NBC, fox PPV 亦受限於片商的議價能力
  • Telco: 電信業者 , 電視高畫質的 VOD, 內容更多 70 美元的月費 Like EPIX
  • Epix (pronounced "epics") is an American premium television channel that is operated by Studio 3 Partners, a joint venture among Viacom (specifically its subdivision Paramount Pictures), MGM and Lionsgate. Viacom handles operational support, including marketing and affiliate services for the service through its MTV Networks division.
  • Streaming Wars-- the Netflix's way

    1. 1. Online Movie Rental Business P97843012P97843012 醫管所魏文一醫管所魏文一
    2. 2. Video-Video- streamingstreaming WarsWars “Unlimited choice, anytime we want it, on any device, for a reasonable monthly price”
    3. 3. Mail-based delivery • On February 25, 2007, Netflix announced the billionth DVD delivery. • On March 30, 2009 Netflix announced an increase in the monthly fee it would charge to customers who rent Blu- Ray discs, from $1 a month to $2 a month. • About 10% of the service’s 10 million monthly subscribers pay a premium to rent Blu-ray titles.(Apr 2010)
    4. 4. Can disks last forever?
    5. 5. The battlefield Streaming is huge potential marketStreaming is huge potential market 100millions USA households already pay for TV, plus several times that globally.
    6. 6. Many ways to enjoy TV shows and movies • Cable, satellite, telco TV/DVR/VOD • DVD sales and rentals • Movie theatres • Pay-per-view (PPV), cable & internet • Free over-the-air broadcast & free online • Piracy
    7. 7. Genesis level Content aggregation platform Devices Networks Brain/Content Production/Tech. $ Xbox, iphone, TV decoder billing Internet, digital cable, satellite, 3G Value chain of streaming market Consumer driven packaging Browser/ Internet Long Tail portfolio Possible future control points
    8. 8. Customer segments Download Mania 低 價 個 人 化 服 務 便利性 臨場感 CATV Mania VOD service Mania Home theater Mania Movie Goer
    9. 9. Competitor positioning 廣 ▲ 目 標 客 群 ▼ 窄 PC based TV based YouTubeYouTube HuluHulu YouTubeYouTube HuluHulu StarzStarz HBOHBO SHOWTIMESHOWTIME EPIXEPIX StarzStarz HBOHBO SHOWTIMESHOWTIME EPIXEPIX Apple TVApple TV TiVoTiVo Other Set-top boxOther Set-top box Blu-ray playerBlu-ray player Apple TVApple TV TiVoTiVo Other Set-top boxOther Set-top box Blu-ray playerBlu-ray player iTunesiTunes MovielinkMovielink CINEMANOWCINEMANOW iTunesiTunes MovielinkMovielink CINEMANOWCINEMANOW
    10. 10. What’s the true KSF in Video- streaming services? • 容種類內 • 會員數量 • 低價誘因 • 訂 忠誠戶 • 通路數量 • 容熱門內 • 傳輸速度 • 影音效果
    11. 11. Let’s streamLet’s stream !!
    12. 12. Netflix 的 Motorcycle 戰略 • At $9 a month, we augmented rather than replace the standard video package. – We’re a motorcycle, the standard video package is a car. – There are a few people with motorcycle only, but vast majority have a motorcycle in a addition to car. – Our motorcycle has to be great to get car owners to spend on us.
    13. 13. Ubiquitous Netflix • Video game consoles • Set-top boxes • Blue-ray players • Television • Hand devices • Netflix expecting to have the service on more than 100 different CE devices in 2010
    14. 14. What did the analyst say? • Shares of Netflix Inc. April 21 closed down more than 6% after an analyst warned . • Barton Crockett, analyst with Lazard Captial Markets, in a research note said the draw of Netflix’s popular Watch Instantly free streaming service could “be meaningfully eroded” in the near term as Hulu and YouTube aggressively bow free ad-supported content.
    15. 15. What did their subs say? • Two-thirds of Netflix customers have used the service's "Watch Instantly" feature .(Nov 2009) • But, over 60% of streaming movie watching is still done on a computer, Only 13% of respondents said they connect that computer to a TV.
    16. 16. What did their subs say?
    17. 17. New entry: Red box • The best part, or at least the most interesting comes in regards to the price — $3.95 a month. In addition, it was also said that those on the monthly plan would get four free kiosk rentals per month. (Apr 2010)
    18. 18. New Entry: HBO • Pay-TV juggernaut HBO has officially announced the launch of HBO Go, a video-streaming service. • HBO Go will be able to offer access to newer titles than Netflix • The cable industry's attempt to transfer the cable business model onto the Web.
    19. 19. Netflix Vs Hulu Netflix Hulu Members 13M subscribers $8.99/mo For free Hulu plans to charge $9.95 as "Hulu Plus". Titles 17,000 titles More 200 producers Revenues Subscription fee Ad-supported Format Netflix app (MS silverfox) hulu 、 hulu desktop(flash) Market Expansion Plan in second half of 2010 Abandoned in 2009 Distribution 100 devices in 2010 XBox360, PS3
    20. 20. Potential competitor-Epix • Epix is a cable channel with a streaming online companion service that looks to subsume both TV and computer-based movie-watching into one subscription. • Netflix could also suffer if a competitor figures out a less expensive way of providing streaming movies direct to a television.
    21. 21. What did Hastings say? • Netflix CEO Reed Hastings attributed his company’s decreased customer turnover and lower subscriber acquisition costs to increases in its streaming service. (Apr 2010) • “There are a lot of competitive threats… But cable, satellite, and telcos improving their products is probably the biggest threat,” • “We’ll see what Hulu do,” • “Redbox does many things incredibly well, but we’re not worried about them as a streaming competitor,” • “In the long term the iPad is a great device that has a lot of potential,”
    22. 22. What’s wrong withWhat’s wrong with ??
    23. 23. Netflix only in one content type • User-generated • News • Sports • Movie & TV shows (Netflix) • Music video • Adult • Instructional
    24. 24. Netflix only one revenue model • AD-paid free (YouTube, Hulu, ABC, etc) • PPV (Amazon, Apple, Sony, Microsoft, Wal-mart, Best Buy, etc ) • Consumer-paid subscription (Netflix) • ISP-paid subscription (ESPN3, etc) • Free, with $ 70 cable/satellite subscription (HBO-Go)
    25. 25. Netflix Strategy: Stay focused and run fast • Keep improving our services as rapidly as possible – Push streaming content spend up to get more content – Create amazing experience, especially on TV – Personalized adaptive UI to generate high satisfaction from broad catalog content • Avoid PPV, ad-supported, sports, news, adult, user-gen, etc • Low operating margins to drive large growth • Expand internationally
    26. 26. CanCan win?win?
    27. 27. Can Netflix win? 新加入者 ( 弱 - 中 ) HBO GO 、 RedBox 替代品 ( 強 - 更強 ) Piracy 、 VOD 、 CS T 、 DVD Rental 、 Kiosk 、 Set-top box 供應商 (弱 - 強) 內容提供者增加 向前整合 ( Hulu ) 內容授權談判力 ISP 公司哄抬價 格 客戶 ( 中 - 強 ) 供過於求 無轉換成本 現有競爭者 ( 強 - 更 強 ) YouTube 、 Hulu 、 Mo vielink(BBI) 、 PPV
    28. 28. Cable/ Satellite/ Telco (CST) • They’re improving their $70/mo service with more on- demand, better UI, more content, more HD, etc • Compelling directly with us $10/mo probably doesn’t make sense for CST because they aren’t national web brands, and it only furthers erosion of $ 70 price point • Netflix offer only a fraction of the content of CST, and no consumers leave CST for Netflix (CST 比 Netflix 更具內容優 勢 ) • Providing broadband is hugely profitable for cable/telco because no content costs and no satellite competitors, so internet video great for cable/telco profits – CST will be the major competitor of Netflix!
    29. 29. HBO, Starz, Showtime, Epix • They have strong brands and could go consumer over the internet • Netflix want to make money from these premium channels by distributing them on Netflix. • The more they value their content, the more they’re branded content producer, and Netflix are purely another valuable distributor.( 與電影電視頻道既競爭且合作 )
    30. 30. The giants • Amazon, Apple, Best Buy, Disney, Google, Microsoft, News Corp, Sony, Time Warner, Verizon, Wal-Mart, etc.
    32. 32. 參考資料 • 維基百科 • • 數位時代 Beta2.0 • 1111 商搜網 • MBA 智庫百科 • Netflix 網站 • Blockbuster 網站