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NETFLIX CONSULTING PROJECT The Battle to Control Entertainment in the Living Room Kris Chamrernlaksa, Tysen Cole,  Eric Le...
Agenda <ul><li>Introduction </li></ul><ul><li>Problem Definition </li></ul><ul><li>Industry Analysis </li></ul><ul><li>Com...
Introduction <ul><li>Launched in 1998 by CEO Reed Hastings </li></ul><ul><li>Originally very similar to brick and mortar <...
Problem Definition <ul><li>Who is Netflix’s biggest competition? </li></ul><ul><li>How should Netflix respond to competito...
Industry Analysis <ul><li>Drivers </li></ul><ul><ul><li>Distribution Channels </li></ul></ul><ul><ul><li>Platforms </li></...
Industry Analysis <ul><li>Trends </li></ul><ul><ul><li>Automation </li></ul></ul><ul><ul><li>Physical Stores </li></ul></u...
Industry Analysis <ul><li>Porter’s Five Forces </li></ul><ul><ul><li>Supplier Power: High </li></ul></ul><ul><ul><li>Buyer...
Competitive Analysis
Competitive Analysis CURRENT COMPETITORS Pricing Plan Archive (TV shows/Movies) Interesting Fact $7.99/Month, Stream $9.99...
Competitive Analysis FUTURE COMPETITORS Pricing Plan Archive Interesting Fact Free 400 Full-length movies 2 billion people...
Consumer Analysis <ul><li>To learn about Netflix consumers </li></ul><ul><ul><li>Usage and perceptions of ‘Watch Instantly...
Results <ul><li>Balanced Sample, 51 responses </li></ul><ul><ul><li>43.5% Male, 56.5% Female </li></ul></ul><ul><ul><li>61...
Categories of Adopters
Conclusions <ul><li>Most subscribers have used ‘Watch Instantly,’ and they use it a lot </li></ul><ul><li>Nearly all subsc...
Kano Map
Recommendations <ul><li>1. Premium Pricing for New and Early Releases </li></ul><ul><ul><ul><li>Content is a “must have” f...
Recommendations <ul><li>3. Cross-Promotions and Referrals </li></ul><ul><ul><ul><li>Airlines and airports </li></ul></ul><...
THANK YOU! <ul><li>Any questions? </li></ul>
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Netflix Consulting Project

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Netflix Consulting Project

  1. 1. NETFLIX CONSULTING PROJECT The Battle to Control Entertainment in the Living Room Kris Chamrernlaksa, Tysen Cole, Eric Le Duc, Teo Tertel
  2. 2. Agenda <ul><li>Introduction </li></ul><ul><li>Problem Definition </li></ul><ul><li>Industry Analysis </li></ul><ul><li>Competitive Analysis </li></ul><ul><li>Consumer Analysis </li></ul><ul><li>Recommendations </li></ul>
  3. 3. Introduction <ul><li>Launched in 1998 by CEO Reed Hastings </li></ul><ul><li>Originally very similar to brick and mortar </li></ul><ul><li>Patented its envelope delivery system and business model </li></ul><ul><li>Launched ‘Watch Instantly’ in 2007 </li></ul><ul><li>Today: More than 16 million subscribers </li></ul>
  4. 4. Problem Definition <ul><li>Who is Netflix’s biggest competition? </li></ul><ul><li>How should Netflix respond to competitors? </li></ul><ul><li>What do customers like/dislike about Netflix? </li></ul><ul><li>How can Netflix convert its DVD-by-mail customers to streaming users? </li></ul><ul><li>What should Netflix’s future strategy be? </li></ul>
  5. 5. Industry Analysis <ul><li>Drivers </li></ul><ul><ul><li>Distribution Channels </li></ul></ul><ul><ul><li>Platforms </li></ul></ul><ul><ul><li>The Internet </li></ul></ul><ul><ul><li>Consumer Behavior </li></ul></ul>
  6. 6. Industry Analysis <ul><li>Trends </li></ul><ul><ul><li>Automation </li></ul></ul><ul><ul><li>Physical Stores </li></ul></ul><ul><ul><li>Complementing Hardware & Software </li></ul></ul><ul><ul><li>Instant </li></ul></ul><ul><ul><li>No late charges </li></ul></ul>
  7. 7. Industry Analysis <ul><li>Porter’s Five Forces </li></ul><ul><ul><li>Supplier Power: High </li></ul></ul><ul><ul><li>Buyer Power: Strong </li></ul></ul><ul><ul><li>Threat of New Entrants: Low </li></ul></ul><ul><ul><li>Threat of Substitutes: High </li></ul></ul><ul><ul><li>Competitive Rivalry: Intense </li></ul></ul><ul><ul><li>Complementors: Favorable </li></ul></ul>
  8. 8. Competitive Analysis
  9. 9. Competitive Analysis CURRENT COMPETITORS Pricing Plan Archive (TV shows/Movies) Interesting Fact $7.99/Month, Stream $9.99/Month, Mail 100,000 20 % of bandwidth during peak hours $7.99/Month TV Show Episodes Full Series Runs but still watching ads? $.99 - $1.99/TV show $4.99-$9.99/Movie 75,000 Disc+ On Demand digital copy $4.99 ($1+ HD)/ 2-day Rentals 100,000 1 st TV provider with mobile app manager $1.99 - $3.99/Rent $7.99 - $15.99/Buy 95,000 Viewable on 100 different devices $3.99 - $4.99/Rent $7.99 - $17.99/Buy 25,000 Comcast cable box subscription= Free? $2.99 - $3.99/Rent $9.99 - $19.99/Buy 10,000 Download content using BestBuy.com $4.99 - $5.99/Rental, Subscription plans 400 new releases 4,000 TV shows and movies free
  10. 10. Competitive Analysis FUTURE COMPETITORS Pricing Plan Archive Interesting Fact Free 400 Full-length movies 2 billion people watching videos each day Rentals: $.99/TV Show $3.99-$4.99/Movie Extensive collection Access to Netflix, iTunes, and YouTube Free (commission on ad sales) Collaborating with Studios/TV networks Netflix available on Google TV, Android Remote Control Subscription TV shows (new/old) and movies Bundled with Amazon Prime $3.95/Monthly unlimited streaming 200 new releases 1 billion DVDs rented
  11. 11. Consumer Analysis <ul><li>To learn about Netflix consumers </li></ul><ul><ul><li>Usage and perceptions of ‘Watch Instantly’ </li></ul></ul><ul><ul><li>Detractors/Enticers of ‘Watch Instantly’ </li></ul></ul><ul><li>Questionnaire in </li></ul><ul><ul><li>Supplemented with personal interview data </li></ul></ul><ul><li>Survey link distributed in team networks </li></ul><ul><ul><li>Contacts, Facebook, Class forum </li></ul></ul><ul><ul><li>Netflix Community forum, Netflix Topix forum </li></ul></ul>
  12. 12. Results <ul><li>Balanced Sample, 51 responses </li></ul><ul><ul><li>43.5% Male, 56.5% Female </li></ul></ul><ul><ul><li>61.7% of ages 26-35 </li></ul></ul><ul><ul><li>82% from CA, 80.9% have at least a Bachelors Degree </li></ul></ul><ul><ul><li>91.5% have adequate internet connections </li></ul></ul><ul><li>Key Findings </li></ul><ul><ul><li>82% have used ‘Watch Instantly’ </li></ul></ul><ul><ul><li>‘ Good Quality’ ratings, avg 4.17 of 5 </li></ul></ul><ul><ul><li>Attracted to convenience, Detracted by lack of content </li></ul></ul><ul><ul><li>Average user streams 12 times per month </li></ul></ul><ul><ul><li>Average users rents 5 DVDs per month </li></ul></ul><ul><ul><li>Average users rents less than 1 Blu-Ray per month </li></ul></ul><ul><ul><li>29% are willing to pay $10 premium for earlier releases </li></ul></ul>
  13. 13. Categories of Adopters
  14. 14. Conclusions <ul><li>Most subscribers have used ‘Watch Instantly,’ and they use it a lot </li></ul><ul><li>Nearly all subscribers have a capable device and internet connection </li></ul><ul><li>Subscribers like the convenience and quality of ‘Watch instantly’ </li></ul><ul><li>Subscribers want fresh content, and nearly 30% are willing to pay extra for it </li></ul>
  15. 15. Kano Map
  16. 16. Recommendations <ul><li>1. Premium Pricing for New and Early Releases </li></ul><ul><ul><ul><li>Content is a “must have” factor </li></ul></ul></ul><ul><ul><ul><li>30% of polled subscribers are willing to pay more </li></ul></ul></ul><ul><ul><ul><li>Survey current customers </li></ul></ul></ul><ul><li>2. New Content </li></ul><ul><ul><ul><li>Current season television programming </li></ul></ul></ul><ul><ul><ul><li>Leverage existing relationships </li></ul></ul></ul><ul><ul><ul><li>Video games </li></ul></ul></ul>
  17. 17. Recommendations <ul><li>3. Cross-Promotions and Referrals </li></ul><ul><ul><ul><li>Airlines and airports </li></ul></ul></ul><ul><ul><ul><li>Streaming-capable devices </li></ul></ul></ul><ul><ul><ul><li>Scholarships to film schools and contests </li></ul></ul></ul><ul><ul><ul><li>Customer referral program </li></ul></ul></ul><ul><li>4. Converting DVD Users to Streaming </li></ul><ul><ul><ul><li>Only 5.28% of existing subscribers are unaware of ‘Watch Instantly;’ Laggards </li></ul></ul></ul><ul><ul><ul><li>Grow overall user base </li></ul></ul></ul>
  18. 18. THANK YOU! <ul><li>Any questions? </li></ul>

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