Case Study on

Case Study on Netflix
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Case Study on Netflix
Table of Contents
Abstract……………………………………………………………………….3
Executive Summary…………………………………………………………..4
Situation/Problem Analysis……………………………………………………8
Creative Strategy………………………………………………………………10
Media Strategy…………………………………………………………………12
The Results…………………………………………………………………….13
Comments …………………………………………………………………….16
References…………………………………………………………………….17
Case Study on Netflix
Abstract
Developed by Michael Treacy and Fred Wiersema, Netflix has proved its autonomy in the entertainment industry. It has reigned ever since 1997 and continues to depict its influence by competing with different movie companies. In exploring its advertising campaigns, there is information about Netflix and its partnership with organizations in the same business. Readers will understand the competitive relationship between Netflix and various companies. A discussion about Blockbuster and its significance in the Netflix case will augur enlightenment on the importance of strategies and policies. By developing its own content, Netflix surpassed Blockbuster due to the organization’s unfeasible approaches.
The paper will also address the challenges faced by Netflix in establishing itself as a suitable company for the provision of movie services. In conjunction with this, the readers will be equipped with knowledge about the challenges facing this company. Netflix, as seen in its campaigns, counteracted the effects of competition emanating from companies such as Amazon, Hulu, Comcast and Time Warner, among others.

As the paper will portray, these challenges are important in assisting the forward trend of Netflix apropos of the entertainment industry. Exposure to stiff competition also plays an indistinguishable role in strengthening Netflix as a digitized company. Additionally, it will touch on the in-depth details that depict Netflix’s achievement in the world of entertainment. Some ideas about the competitive organizations are integrated into the paper; to acquire a deeper understanding of the Netflix case study. The conclusive parts of this paper offer an exploration of the results and comments related to the advertising campaigns apropos of Netflix, a prominent movie company.
Executive Summary
The case study report will delve into Netflix’s recent advertising campaign. There are different articles, documents, reports and press releases about the campaign. Various proponents have also offered information to media houses; in an attempt to alleviate Netflix’s campaign. Apart from TV, Netflix has also ventured into social media platforms as tools for marketing its services. The company utilizes various promotional materials to reach a wide audience. Netflix dwells mainly on social channels to spread the message about their products. The report will also depict Netflix’s non-affiliation with third-party advertisements in its campaigns. It will offer an in-depth analysis about Netflix’s primary competitors such as Hulu Plus, Home Box Office (HBO) and Amazon.
As mentioned, the report will also explore Netflix’s advertising strategies and its incorporation of news coverage in improving the company’s campaign. There is an in-depth examination of the situation analysis, creative strategy, media strategy and its results, among other significant details concerning the Netflix’s advertising campaign. A clear analysis of statistics is required so as to bring about conciseness in the report. These figures and data are useful in ascertaining the working nature of the advertising campaign posited by Netflix (Keating, 2013). The goals and objectives of Netflix will also be discussed in the report as a validation of its advertising campaign. This case study is, therefore, essential in assisting Netflix to distribute its products to the public. Its unique nature of advertising, as depicted in the report, ensures that the organization is differentiated highly with its potential competitors. Finally, this report will integrate various results augured from the in-depth analysis of Netflix’s advertising campaign strategy. They will, therefore, offer insight into the personal reactions elicited through the report.
Situation/ Problem Analysis
As it is one of the fastest growing movie companies, delving into its campaign analysis is important. Netflix revolves around three principles including operational excellence, product leadership, and customer intimacy. They believe that customers are always right thus; the latter are given greater priority as the company makes decisions. Customer intimacy, as portrayed by Netflix, is essential as it enhances the relationship between employers and employees.
In every enterprise, it is inevitable to meet various trends in the external environment. They may be related to cultures, demography, economics, and technology, among others. There are various business trends affecting the conception of Netflix. The organization has combined with the Charter Communication (CHTR) and Time Warner Cable (TWC) merger so as to acquire free services for streaming its videos. In addition to affordability, Netflix relied on the merger for quick and efficient delivery of services. There are other companies such as AT &T (T) and Verizon (VZ) which offer network services; despite their focus on the fee charge. Apropos of trends, even if CHTR and TWC deliver free services, there are certain bills that would be catered by Netflix. The merger, despite offering powers to Netflix, has a right to hinder the effects of network traffic. According to these trends, an increase in traffic interferes with the economic stability and overall success of Netflix. The current situation oversees a failed relationship between Netflix and the merger.
Delving further into an understanding of the trends facing Netflix, the audience observes its inclination toward the production of original material. After this initiative, according to Keating (2013), the company received formidable membership requests, thereby, showing the influential nature of this new trend. Its collaboration with Disney also places Netflix at an upper hand due to the former’s influential nature in the TV entertainment industry (Keating, 2013). Offering original content to the viewers ensures their utter indulgence in the company; a directive useful in eradicating the prevalent competitors. The initiative captures numerous viewers with original content for countless hours and financial affordability. Evidently, it is a trend that assists in attracting more customers to the company and its prominence in the entertainment world, as a whole.
Unlike most services, Netflix satisfies its customers hence; it is considered to be customer-oriented. Since the company’s rivals are at par with initiatives, Netflix is still classified as the topmost in satisfying its customers and clients. Daidj reiterates that the company ensured its service costs, reliability, content, communicative processes, reliability and high performance were in line with all the customers’ requirements (Daidj, 2015). According to these metrics and performance measurement, against companies such as Hulu, Amazon, Walmart and Apple, Netflix emerged the best apropos of customer satisfaction. The issue about safety is also clearly addressed by the Parental Guidance option; ensuring that children do not view adult content. Utilizing this option assists different viewers in understanding the positioning strategy of Netflix. Exploring the demographics in Netflix, it is evident that a certain group of people indulge in the streaming process (Daidj, 2015).
Individuals that are over 35 years old often concentrate simply on shows and content on TV. Netflix’s ability to attract customers affects its overall growth and development in the entertainment industry. As seen, Netflix faces stiff competition from various companies. In addition to HBO, Hulu and Amazon, there are other companies such as Time Warner (TWX), Verizon and Comcast that are considered threats to Netflix. Netflix’s online streaming portrayed systematic tendencies as it started on a workable note. It is unfortunate that the online streaming business, however, did not manage to succeed due to a failure in 2011. Depending on digital owners of videos, Netflix was unable to flourish as a video streaming business. These barriers did not stop the company from striving to succeed and developing further into the world of entertainment. Fortunately, the company was capable of utilizing various skills for improving the video streaming business. They stopped depending on these video owners and managed to create their content, as mentioned earlier. It was these decisions that led to competition with companies such as HBO, Hulu, and Amazon, among others. Netflix commenced with the three web series; Arrested Development, Orange is the New Black as well as House of Cards (Keating, 2013). Even if they used a large amount of money, Netflix managed to regain profits through the success of their content. The creativity and organizational strategy showcased by Netflix was considered successful because the company managed to receive fourteen Emmy nominations.
Blockbuster is an online rental company that has subtly competed against Netflix. It was, however, subtle in opposing Netflix’s strategies because Blockbuster was not a visible competitor before 2004. The company accrued its profits by imposing fines on people that did not return the DVDs in good time. It was a strategy that ascertained their financial and economic wellness. Blockbuster’s CEO was drawn toward Netflix’s strategies thus strived to develop an online streaming business as well. Unlike Netflix, Blockbuster suffered huge losses in an attempt to set up an online organization. The company became bankrupt; forcing Blockbuster to relieve the CEO of his duties. Due to his incompetence, Netflix managed to surpass Blockbuster’s efforts in achieving recognition in the entertainment industry.
There was an overall disadvantage tied to Blockbuster because its CEO’s incompetence interfered with potential customers and clients. While Reed Hastings and Marc Randolph advertised Netflix, it is essential for individuals to understand the scope of its conception. It commenced in 1997 when the two founders realized the potential of incorporating data in a plastic disc. Simply put, Netflix’s creative strategy was notable since its conception. The company, before setting up an online streaming business, delivered DVDs through mails to people’s houses.
Creative Strategy
From the discussion, it is clear that Netflix has experienced both positives and negatives. After competing successfully with Blockbuster, the company underwent complications with the Qwikster organization. As a result of the organization’s newly develop content, as mentioned earlier, Netflix managed to secure over 60 million customers and subscribers. The number, however, does not cease to increase due to Netflix’s proper delivery of customer services. However, the prominence of Netflix as a company is largely attributable to the digital campaign it has embarked on over the years. It is important to note that the campaign is characterized by different strategies which ensure proper functioning of the company. Fore mostly, Netflix applies logarithms that offer specified content to consumers through its “Recommended for You” sections of its application and website. The directive allows for better customer engagement by targeting each customer’s specific interests. Moreover, Netflix adopted a playful voice on its social media networks which shows consumers that it can “speak their language” and makes the company more likable and approachable. Additionally, Netflix uses data to offer requisite elements to its customers. According to a survey carried out recently by Netflix, the company realized that about 76 percent of individuals often watched numerous episodes in one sitting. As a matter of fact, customer reviews about Netflix informed the organization about the enjoyable nature of watching countless videos within a short time. Delving further into Netflix’s principles, people observe that the company treasures its customers and offers them satisfaction. They used the customer reviews and creatively, commenced releasing the episodes in bulk. Knowing and understanding the customer taste and preferences has indeed alleviated Netflix and its significance in the entertainment industry.
Their newly developed creative strategy, therefore, assisted them in improving productivity and delivering quality to trusted customers and clients. By initiating change, Netflix continued to compete with companies such as HBO, Blockbuster, Amazon and Hulu, among other entertainment platforms. These derogatory patterns of innovation interfered with Blockbuster’s success and development. Instead of partnering with the CEO of Netflix, Blockbuster resorted to utilizing its own poor strategies. It is unfortunate that Blockbuster failed to accrue enough profits simply because the company did not collaborate with Netflix.
As seen, the collaboration between Netflix and Blockbuster would augur perfect results. The latter’s decision of depending on its directives interfered with its financial and economic stability. The bankruptcy foreseen in Blockbuster’s reign is, therefore, justified in a holistic manner. Even if they acquired returns from delayed movies, it was impossible for the company to simply survive with these profits. Netflix’s creative strategy, unlike Blockbuster’s, appears feasible due to the former’s focus on achieving original content. While Blockbuster spent a great amount of time imposing fines on their customers, Netflix was endowed with returns from marketing their own content. The approaches and policies utilized by both companies delineate disparities due to the success and decline of Netflix and Blockbuster, respectively.
Media Strategy
Over the years, Netflix has been nominated and won different awards. The company secured “The Best in Social Media” award for their creative use of technology as a marketing strategy. Additionally, Netflix has amassed millions of followers spread out across the major Social network sites on the internet; 1.7 Million followers on Instagram, 2.03 Million on Twitter and about 23 million fans on Facebook. Despite the fact that the strategies applied on each platform vary, the end results are indistinguishable. On Facebook, Netflix applies geo-targeting so as to provide relevant information to different audiences around the world on a regular basis. In point of fact, humor is a strategy that is affiliated greatly with Netflix, as an entertainment company. On Twitter, for instance, Netflix takes on a friendly stand with its followers by often providing them with words of wisdom laced with humor and open to engagement. Influencer strategy is another method that has proved helpful to the success of this company’s campaign. The use of the well-known celebrities to help promote its content has proved successful as a marketing strategy which its social media engineers have mastered and perfected to their utmost benefit (Reinders & Freijsen, 2012).
Another strategy, involving providing proper content, ensuring constant engagement and taking advantage of the right influencers, has propelled Netflix to the entertainment giant that it is today. The assertion is evidenced clearly by the number of subscribers it has gained over the years. As of now, Netflix boosts having over 80 Million subscribers. Reinders and Freijsen (2012) detail the newly developed policies and strategies of Netflix that have clearly taken over the concept of traditional television (Reinders & Freijsen, 2012). By engaging users at their level, Netflix has been able to cultivate a friendly relationship that promotes loyalty which ensures their growth and continued success. The use of humor makes the company more likable and approachable to its audiences and any potential subscribers. Netflix has undoubtedly dedicated time and energy to understand its target customer which in itself is a strategy for success (Keating, 2013).
The Results
It is evident, from the growth in subscribers and expansion to various countries across the globe, that Netflix’s social media campaign has proved quite successful. Being an influential entertainment company globally, in 2007, Netflix witnessed the streaming finances move from 1.2 billion U.S dollars to 6.8 billion U.S dollars today. In 2016, there was good news when Netflix announced that its services have spread throughout over 130 nations. After the development of its own content, Netflix’s productions have also accumulated over the years. At the close of the market in October 2016, the company reported a twenty per cent growth in subscriptions which is equivalent to 3.75 million streaming subscribers. The turn of events was quite the reassurance to investors that had previously expressed concerns of stagnation in the company’s growth (Treacy, Michael & Frederik, 1995). In the third quarter, revenue increased by thirty-two per cent while net income increased by seventy-five per cent. The number of U.S. subscribers gained was 45 million more than the expected average while that of international additions increased by 3.75 million against the 3.1 million estimated figure.
However, the company still faces challenges with the slow growth of subscriptions. It is observed that the streaming of Netflix’s videos has approached its saturation point in terms of markets and the targeted audience-affluent young-to-middle-aged people- delineating clearly that further growth will be more difficult to attain. Even so, it was quite shocking for these investors to understand that in July, the company has acquired about 160,000 subscribers from the U.S. However, with continued marketing and customer engagement Netflix can still grow despite its target market attaining its maturity by focusing its growth on per-subscriber revenue (Ricci & Shapira, 2015).
Comments
Despite its documented success, Netflix is struggling and battling to exist in the entertainment industry. It is unfortunate that the company suffered a crisis indistinguishable to the one between 2007 and 2010. The crisis revolved around its original DVD business and the redundant nature of this business. It is clear that Netflix, as a company in the entertainment industry, is at the topmost position. As television broadcasting managed to surpass radio during the early 20th century and as cable television overrode broadcasts in the late 20th century, streaming is the next preferred form of accessing videos and clips in the media industry (Keating, 2013).
After the conception of Netflix, it is unfortunate that Cable providers have their subscribers to the company. As a result, most of the U.S. citizens reduced their television watching and turned to streaming videos from Netflix. It is clear that streaming is taking over the entertainment industry and as such it is expected that Netflix should be highly profitable in the future as ABC, NBC, and CBS are today. Their success is attributed to television broadcasting and the influence placed in marketing the medium (Ricci & Shapira, 2015). However, in as much as the stock price reflects this, without a change in strategy, Netflix will not realize these profits accrued by other companies.
The heights of profitability affiliated with Television Networks’ approaches and strategies emanates from the acquisition of power achieved from costs and economies of scale. As only a limited amount of broadcasting and cabling networks have the financial power to build a network of local television stations and offer requisite cable to function countrywide, this gives them free reign to charge customers as well as advertising high prices for their services. With online streaming, however, there are few scale economies (Ricci & Shapira, 2015. As detailed earlier, Netflix managed to develop its network of delivering original content to different locations. However, that form of investment depicts minimalism comparing it to TV or cable networks. Additionally, as Netflix subscribers increase, the “personalization,” these algorithms powering its recommendations appears to be complex in nature. However, it is illogical for the company to depend on these premium payments because consumers do not believe in them. There are subtle reasons to ascertain that Netflix’s competitors such as Amazon and Hulu will undergo consolidative experiences. It is essential to note Netflix’s position and role apropos of internet traffic in America. The company takes up 1/3 of internet traffic and congestion in the U.S.
Unlike its competitors such as Blockbuster, Netflix managed to survive even after being exposed to the public. It is important to understand the human brains involved in alleviating the significance of Netflix in the entertainment industry. Marc Randolph and Reed Hastings managed to develop and mold Netflix into the company that it is today. Even if Hastings was not well-versed with the skills of managing this company, Netflix is a clear indication of the dedication and focus in achieving an organization’s goals and ambitions. Instead of deteriorating, the company continued to grow and develop; even surpassing firm competitors such as HBO. Different companies should acquire information from the situation portrayed by Blockbuster. Their incompetent and inconsistent strategies led to the company’s failure. While people assume that the organization deteriorated because of poor leaders, research offers an in-depth analysis of the relationship between Blockbuster’s failure and its strategies (Ricci & Shapira, 2015.
Instead of emulating Netflix in its creative strategies, the company thrived on already established idea, thereby, interfering with its conception and ultimate success. The case study is a clear indication of the workable advertising strategies portrayed by Netflix. As the company uses social media platforms primarily, it is important to explore them in detail. Its existence is seen on Facebook, Twitter, Instagram and other social media platforms. Creative strategies and media strategies are requisites in ensuring success in advertising campaigns. Without employing these policies, Netflix would still be in constant competition with HBO, Blockbuster, Amazon, Hulu and other related companies. Their integration, as observed, is important so as to monitor Netflix’s progress in the movie and entertainment industry.
References
Daidj, N. (2015). Developing strategic business models and competitive advantage in the digital sector.
Keating, Gina. (2013). Netflixed: The Epic Battle for America’s Eyeballs. Print.
Reinders, A., & Freijsen, M. (2012). The E-Factor: The 10 Highly Effective Habits. Dallas: BenBella Books, Inc.
Ricci, F., Rokach, L., & Shapira, B. (2015). Recommender systems handbook.
Treacy, Michael, and Frederik D. Wiersema. (1995) The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market. New York: Basic Books. Print.