Netflix started in 1997 as a DVD rental service founded by Reed Hastings after being charged a late fee for Apollo 13. It transitioned to a subscription model in 1999 and began streaming movies online in 2007. Netflix now has over 40 million subscribers in the US alone and is the dominant streaming service, though it faces competition from services like Hulu and Amazon. Netflix operates in both the technology retail and retail sectors and has reached maturity, focusing on expanding its streaming content and devices to continually improve the customer experience.

1. Jesse Baxter
3/28/16
Netflix Corporate Profile
Company History-Netflix, like most great ideas, started with a problem that needed solving. In
1997, Founder and CEO Reed Hastings were stuck with an extraordinary late fee of $40, for a
copy of Apollo 13. Embarrassed to face the employee at the store about the large fee, Hastings
began doing research on how movie rentals and how they could be done by mail. This was at a
time when DVD was on the brink of release and Hasting believed they would be perfect for
envelopes. To test his idea, Hastings drove to Santa Cruz to ship himself DVD’s to make sure
they could survive the journey. Being pleased with the results, Hastings developed a rental by
mail service. While keeping an eye on his competitor activities, Hasting realized Netflix was
simply a rental by mail and he wanted to change that. Netflix at the time was also too slow to
make any profit so a change to the model was made and Netflix turned into a subscription
service in 1999. Starting a free trial, in which only 20% didn’t move to the full paid service. It
wasn’t until 2007 that Netflix began streaming movies online. The service began as almost a pay
per view idea, being that you would pay for a certain amount of time, anywhere from 6 to 18
hours at a time. In 2011 Netflix decided to split its subscription service into 2 categories, DVD
renters and online streamers. Starting 2012, Netflix announced that it now be creating its own
original content which was a huge change to the system.

2. Stakeholder and Publics-Netflix has become a household name these days. Netflix has many
different stakeholders. Aside from the obvious stake holder like the owners and employees,
Netflix now has to take care of its customers first and foremost. As for its stakeholders, a large
portion these days are movie companies. Now with its original content, multiple movie studios
now have a stake in Netflix’s future. Huge companies like Marvel have started creating its series
to through Netflix. Another large stakeholder for Netflix are their suppliers. Like Marvel, many
companies have flocked to the golden egg laying goose that is Netflix, whose show are actually
winning awards. Mega companies like Sony, LG, and even Google have a stake in Netflix. The
final and most important of Netflix’s stakeholder and publics are its customers. In the U.S, alone
there are over 40 million subscribers at the beginning of 2016. Netflix has had a rocky
relationship with its stakeholders that will be explored more in depth in the issues and public
outlook section.
Sector- Netflix belongs in both the retail industry and technology retail sectors. With both a
DVD rental service and online streaming, Netflix wears two hats so to speak. The DVD rental
service provides DVD directly to the customer’s home. While back in the early 2000s this service
seemed very convenient, today everyone is looking for instant entertainment and as a result,
the DVD rental subscriptions have dropped dramatically. But where Netflix is losing DVD service
subscribers it is more than making up for it with its online streaming. With people becoming
increasingly dependent on technology, it’s no surprise that the streaming service has taken off.
Stage of Development- Currently, Netflix is at the stage in its development where it has
reached its maturity. Being very well established, even to the point where “Netflix and Chill” is a
common household activity. The daily amount of hours spent watching Netflix is around 100

3. million hours of viewing time. Netflix is currently staying relevant with a full schedule of both
exclusive and original movies and series.
Characteristics:
Sector- Netflix is an organization that is very open with its customers and stakeholders. Netflix
belongs to both the technology retail sector and retail industry. Today the retail industry is
slowly decreasing thanks to the influx of online retailers. This hasn’t stopped Netflix since it can
just switch “hats” and focus on its bread and butter, technology retail. The market for
Technology retail is only increasing as new emerging technologies make streaming movies even
more convenient.
Competitor Activity- Today Netflix’s main competition is other streaming services such as Hulu
Plus and Amazon. While currently Netflix is the dominant form of streaming (taking 36% of the
market). Services like Hulu Plus and Amazon are trying to creep their way into the market by
creating their own original content like Netflix. Hulu Plus is the cheapest of the three at $8
dollars a month and offer new episodes as they air on television, but for the price you must sit
through sponsored ads, which is what many trying to stream TV are trying to avoid. Amazon is
the only streaming service of the three that has an annual fee of $99 rather than monthly. This
large price and commitment can scare away potential subscribers and leaves Amazon at the
bottom of the three streamers with only 6.5% market share.

4. Mission- Netflix’s mission is to grow its streaming subscription business domestically and
globally. Netflix also wants to continuously improve the customer experience, by focusing on
expanding its streaming content, enhancing their interface, and increase streaming on more
devices.
Size and Structure- Netflix, being the world’s leading internet streaming company and internet
television network. While starting as simple DVD rental business, it has evolved into much
more. Today Netflix isn’t only renting DVD’s, but streaming and even more impressive, creating
original content. This has definitely changed from what was a simple structure to a large
conglomerate of different levels. While it started with a simple structure, Netflix to keep
relevant has had to change with emerging technologies and competitors.
Nature of organization- Netflix today is not only a DVD rental or online streaming service, but
also an internet television network. Netflix now is creating and outsourcing for original content.
Netflix is operating in multiple sectors, Technology Retail and Retail industry.
Traditions and History- While the company has been around since the late 90’s, its popularity
and brand jumped when they introduced the streaming service. It’s original hook for when it
did DVD rentals was their promise of no late fees. They value their subscribers now more than
ever.
Reputational History- While having a slow start, Netflix’s use and popularity have been
increasing as the company matured. While they have had a few issues with new competition
and decisions that subscribers weren’t pleased about, Netflix has rolled with the punches and
still remains the highest used streaming service.

5. Types of Employees- Netflix has a large mix of different leveled jobs
Issues- Netflix’s main issue are new emerging streaming services. Netflix seems to have its two
greatest competitors under control, any new streaming service could pose a huge threat. To
beat these emerging services, Netflix has to find a way to stay relevant and change with the
evolving market, something that Netflix is already excelling at.
Public Outlook- with Netflix being as popular as it is, it’s hard to imagine people having a
negative outlook towards it. This is not the case however, as Netflix found out in 2011 when
they announced to increase the subscription price, this created an uproar of angry subscribers
and even caused many to flee as well as drop the stock price. This lead to the CEO Hasting to
make a public apology and cancel the increase. While Netflix is a powerhouse of a company, in
2011 they found out how important their customers are to the survival of their company.
Deadlines- Being a streaming service, Netflix has many deadline both internally and externally
that it must keep track of. As streaming service, Netflix has to keep on top of the release of new
movies and shows, to keep its content fresh. With Netflix being an internet network, they must
keep track of when the content is being made and when it will be released.
Public Relation: Netflix has more than a few PR issues to deal with as it grew. Most of these
issues stemmed from the company’s lack of transparency when it came to huge decisions, like
separating the DVD and streaming services or increasing the price of membership. With almost
20 years’ worth of public relation experience, Netflix continues to show that while they still
control the market, it still has to work on its ability to handle problems. Today, Netflix is now
worth more than CBS, so the problem lies in the department, not the budget.

6. Recommendation: Netflix does many things right. They’re great at changing and staying
relevant, and Netflix continues to be number one streaming service. While you can’t argue the
success of the company, this success is not without overcoming some substantial issues. The
biggest issue Netflix currently has been its public relation skills. The largest issues Netflix has
faced, is its ability to disclose information. I’d strongly recommend Netflix invests in a new
Public Relations team, one better suited to dealing with news to stakeholders. With at least two
counts of people complaining about the company’s transparency, it’s clear that they need to be
more open to their stakeholders.

7. Bibliography:
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Retrieved March 28, 2016, from http://spiderbook.com/netflix-suppliers.html
2. Moskowitz, D. (2015, March 12). Who Are Netflix's Main Competitors? (NFLX) |
Investopedia. Retrieved March 28, 2016, from
http://www.investopedia.com/articles/markets/051215/who-are-netflixs-main-
competitors-nflx.asp
3. Smith, C. (2014, January 7). 70 Amazing Netflix Statistics and Facts. Retrieved March 28,
2016, from http://expandedramblings.com/index.php/netflix_statistics-facts/
4. Honorof, M. (2016, February 19). Best Streaming Services - Netflix, Hulu, Amazon and
More. Retrieved March 28, 2016, from http://www.tomsguide.com/us/best-streaming-
video-services,review-2625.html
5. Abkowitz, A. (2009, January 28). How Netflix got started. Retrieved March 28, 2016,
from
http://archive.fortune.com/2009/01/27/news/newsmakers/hastings_netflix.fortune/in
dex.htm