Netflix Public Relations Case analysis

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this is the analysis of the situation faced by Netflix in 2011. The major reasons being sudden price hike and lack of communication between company and consumers.

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Netflix Public Relations Case analysis

  1. 1. NETFLIX: The Public Relations Box Office Flop Presented by- Kuhu Pathak Abhijeet Thorat
  2. 2. Case Synopsis- • The world’s largest internet subscription service for watching movies and TV instantly with more than 25 million members worldwide. • Netflix is revolutionizing the way people watch movies and TV shows by streaming directly to them. • Netflix has become the preferred online provider of the entertainment experience in the U.S.A.
  3. 3. • Netflix streams on: • Microsoft • Xbox 360 • Nintendo Wii • Sony PS3 console • Blu-ray disc players • Internet-connected TVs • Home theater system • Internet video players: Apple iPhone, iPad and iPod touch, Android devices, as well as Apple TV and Google TV. • During the first quarter of 2011, sales and rentals of packaged DVDs and Blu-ray Discs plunged about 20 percent, and the sell-through of packaged discs fell 19.99 percent to $2.07 billion, with more money spent on subscription rentals than in-store rentals
  4. 4. Fast facts Spilt into two companies. Increased prices 60%. In 2003, 1st Operating profit achieved. Focused on Content Online Streaming.
  5. 5. 1997- Reed Hastings & Marc Randolph founded Netflix 1999- Change of plans-Monthly fee 2000- 300,000 subscribers(but still in losses) May 2002- released IPO 2003- 1st operating profit 2007- 1 Billionth DVD rented 2010- Global Expansion 2011, Sept- Prices Increased 60% 2011, Qwikster Timeline-
  6. 6. Lack Of Communication Price Increase Response time Lack of comparable selection between DVDs by mail and Instant Stream Customer’s dissatisfaction Not developed business strategy Brand Image Degradation
  7. 7. Netflix statistics 0 5 10 15 20 25 2007 2008 2009 2010 Members In millions 0 20 40 60 80 100 120 140 160 180 2007 2008 2009 2010 Net Income in $million
  8. 8. Recommendations: Alternative Business Models Bundle services with pay-tv packages. Less money from more customers = Revenue boost Less competition = Lower licensing fees Customers sign up for service directly on AppleTV & pay through iTunes. Reach more customers = Revenue boost Partner with gaming companies to offer on- demand video game services. New customer segment = Revenue boost Develop “HBO quality” original content. Lure & retain customers with content that’s untouchable by competitors = Revenue boost
  9. 9. Conclusion • Customers still enjoy Netflix capabilities Mostly good feedback Netflix performs well against competitors Supporters create social media buzz • Price, prompt delivery, communication method Main obstacles:

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