2. WHY NETFLIX
• NETFLIX INTRODUCED THE MONTHLY SUBSCRIPTION CONCEPT IN SEPTEMBER 1999,[31] AND
THEN DROPPED THE SINGLE-RENTAL MODEL IN EARLY 2000. SINCE THAT TIME (SEE
TECHNICAL DETAILS OF NETFLIX), THE COMPANY HAS BUILT ITS REPUTATION ON THE
BUSINESS MODEL OF FLAT-FEE UNLIMITED RENTALS WITHOUT DUE DATES, LATE FEES,
SHIPPING AND HANDLING FEES, OR PER-TITLE RENTAL FEES
• IN 2000, WHEN NETFLIX HAD JUST ABOUT 300,000 SUBSCRIBERS AND RELIED ON THE U.S.
POSTAL SERVICE FOR THE DELIVERY OF THEIR DVDS, THEY WERE LOSING MONEY AND
OFFERED TO BE ACQUIRED BY BLOCKBUSTER FOR $50 MILLION. THEY PROPOSED THAT
NETFLIX, WHICH WOULD BE RENAMED AS BLOCKBUSTER.COM, WOULD HANDLE THE ONLINE
BUSINESS, WHILE BLOCKBUSTER WOULD TAKE CARE OF THE DVDS, MAKING THEM LESS
DEPENDENT ON THE U.S. POSTAL SERVICE. THE OFFER WAS DECLINED.
• REJECTED VHS TAPES THEY TESTED THE CONCEPT OF SELLING OR RENTING DVDS BY MAIL
3. ORIGIN
• NETFLIX, INC. IS AN AMERICAN MEDIA-
SERVICES PROVIDER AND PRODUCTION
COMPANY HEADQUARTERED IN LOS GATOS,
CALIFORNIA, FOUNDED IN 1997 BY REED
HASTINGS AND MARC RANDOLPH IN SCOTTS
VALLEY, CALIFORNIA.
IDEA GENERATION
•CEO Reed Hastings originally said he
got the idea for Netflix after having to
pay $40 in late fees for returning a
movie late.
•They came up with the idea for Netflix
while commuting between their
homes in Santa Cruz and Pure Atria’s
headquarter in Sunnyvale while
waiting for government regulators to
approve the merger.
Reed Hastings
Marc Randolph
4. BUSINESS MODEL
• OUR BUSINESS MODEL IS
SUBSCRIPTION BASED AS OPPOSED
TO A MODEL GENERATING REVENUES
AT A SPECIFIC TITLE LEVEL.
THEREFORE, CONTENT ASSETS, BOTH
LICENSED AND PRODUCED, ARE
REVIEWED IN AGGREGATE AT THE
OPERATING SEGMENT LEVEL WHEN
AN EVENT OR CHANGE IN
CIRCUMSTANCES INDICATES A
CHANGE IN THE EXPECTED
USEFULNESS.
• THE COMPANY HAS THREE BUSINESS
SEGMENTS:
DOMESTIC STREAMING: REVENUES FROM
MONTHLY MEMBERSHIP FEES FOR SERVICES
CONSISTING SOLELY OF STREAMING CONTENT TO
OUR MEMBERS IN THE UNITED STATES.
INTERNATIONAL STREAMING: REVENUES FROM
MONTHLY MEMBERSHIP FEES FOR SERVICES
CONSISTING SOLELY OF STREAMING CONTENT TO
OUR MEMBERS OUTSIDE THE UNITED STATES
AND DOMESTIC DVD: REVENUES FROM MONTHLY
MEMBERSHIP FEES FOR SERVICES CONSISTING
SOLELY OF DVD-BY-MAIL
6. INVESTORS
The Vanguard Group which owned more than 30.7
million shares, or 7.04% of the company.
Capital Research Global Investors owned more than
25.7 million shares, or 5.88% of the company.
Fidelity Management and Research owned 25.0
million shares (5.72%)
Blackrock claims 18.4 million shares (4.21%)
7. CURRENT STATUS
• Netflix has grown into one of the most influential
media streaming services in the world.
• The company was one of the first to see the potential of
streaming technology and began to transition to a
subscription video-on-demand model in 2007. Since this
transition,
• annual revenue has grown from 1.36 billion to around
15.8 billion in just ten years.
• number of Netflix subscribers has followed a similar
trend, growing from less than 22 million in 2011 to nearly
150 million in 2019.
• The service is becoming so popular that an estimated 37
percent of the world’s internet users use Netflix.
Total number of subscription
Video-on-Demand Households
worldwide in 2018
250m
NETFLIX Annual revenue in
2018
15.79bn USD
No of NETFLIX paying
subscriber as of 2019
158.33mn
8. REVENUE
• Video Streaming giant Netflix had a total net income of
over 1.21 billion U.S Dollar in 2008. The Company
annual revenue reached 15.79 U.S Billion Dollar 2018.
• The number of streaming Netflix subscriber worldwide
has continued has continued to grow in recent year
reaching 148.46 million in the fourth quarter of 2018,
Three year earlier in the fourth quarter of 2015, the figure
stood at 74.6 million subscriber
9. WS
O T
Strength
• Brand Name(48m)
• Own Original
Series
• Good Delivery
platform
Opportunity
• Innovation to cloud
• Online game streaming
• Marketing/Advertising
Weakness
• Take debt to fund extreme
content licensing
• Technical errors
• User accessibility
• Not available in Europe and
other countries due to legal
issues
Threat
• Illegal downloading
• Competitors
• Content pricing
10. SOCIAL IMPACT
• Binge watching not good for youth
• Netflix you get a wide variety of entertainment content that you can watch with your
family friends and colleagues and it can be a good stress reliever.
![WHY NETFLIX
• NETFLIX INTRODUCED THE MONTHLY SUBSCRIPTION CONCEPT IN SEPTEMBER 1999,[31] AND
THEN DROPPED THE SINGLE-RENTAL MODEL IN EARLY 2000. SINCE THAT TIME (SEE
TECHNICAL DETAILS OF NETFLIX), THE COMPANY HAS BUILT ITS REPUTATION ON THE
BUSINESS MODEL OF FLAT-FEE UNLIMITED RENTALS WITHOUT DUE DATES, LATE FEES,
SHIPPING AND HANDLING FEES, OR PER-TITLE RENTAL FEES
• IN 2000, WHEN NETFLIX HAD JUST ABOUT 300,000 SUBSCRIBERS AND RELIED ON THE U.S.
POSTAL SERVICE FOR THE DELIVERY OF THEIR DVDS, THEY WERE LOSING MONEY AND
OFFERED TO BE ACQUIRED BY BLOCKBUSTER FOR $50 MILLION. THEY PROPOSED THAT
NETFLIX, WHICH WOULD BE RENAMED AS BLOCKBUSTER.COM, WOULD HANDLE THE ONLINE
BUSINESS, WHILE BLOCKBUSTER WOULD TAKE CARE OF THE DVDS, MAKING THEM LESS
DEPENDENT ON THE U.S. POSTAL SERVICE. THE OFFER WAS DECLINED.
• REJECTED VHS TAPES THEY TESTED THE CONCEPT OF SELLING OR RENTING DVDS BY MAIL](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)