Netflix Case

The brand that changed the rules of the game of

television and cinema on a global level
In recent years, Netflix has become one of the most important references in the
entertainment business, changing the way people consume content from
television. New terms such as series marathons are very common today,
especially among the youth. It changed the television and film business. Today many of the
Oscar-winning movies are produced by Netflix and do not go through theaters.
cinema. The world of audiovisual entertainment changed just like the television industry, the
which traditionally depended on advertising investments.

Netflix has profoundly transformed the film and television industry worldwide. Since its
incursion as an entertainment industry in 1997 in the US. Netflix and the rise of the internet
they have profoundly transformed the traditional forms of film distribution, as well as the
television industry. With an initial business model in the 90s based on rental of
DVD in the United States through the postal system became a great platform for
online distribution of movies, series, and documentaries, with a presence in 190 countries.

The company was founded in 1997 by Reed Hastings and Marc Randolph to offer rental of
DVD movies through an online request made by the user, whose shipping logistics
based on the postal system of the United States. Netflix was founded in 1997 in Scotts Valley,
California. Hastings provided the initial capital and invested $2.5 million in cash in the setup
march. Inspired by the e-commerce model of Amazon, the couple explored several
portable items that they could use to sell online in a similar way. Netflix is
launched in April 1998 as one of the first online DVD rental companies in the world.
They had very few staff and just under 1000 titles at that time.

The name Netflix is a combination of 'Net' (as in the abbreviation for 'internet') and 'Flix' (a
variation of "flick", the common abbreviation for a movie.

Netflix was born as an online DVD rental service by subscription. Its founder Reed
Hastings created a new business model, first through rental and later through
from streaming television services. Customers rented movies, mainly in
VHS format in a retail store for a specific period of time. The market leader was
Blockbuster. Similarly, in each country there were smaller competitors such as was the case with
Betatonio in the Colombian market.

Netflix was founded in 1997, when the video rental market was a business
fragmented, with a large number of family-type retail outlets. In this year
A large number of Internet-based companies began to emerge.

Hastings, after paying 40 dollars for the delay in the delivery of a movie, Apollo 13, began
to consider alternative ways to offer a movie service for consumers in their
homes that would better meet customer expectations. Starting with
movie rental companies that used the postal service in the United States to
deliver the DVDs to their subscribers. In 2006, customers could visit the website of
Netflix to be able to choose from a portfolio of over 70,000 movies, through 55 million
DVDs. The Netflix website included a search engine that allowed customers to locate
the movies by filters such as genre, title, director, actor. Their pricing strategy at the beginning was
similar to traditional video stores.

Netflix is entertainment; fun; originality; innovation and happiness

The main pain of Blockbuster shoppers was having to pay high fines for a
product that they were not using, for the company it was a big business but for the customers a
great headache. By the year 2006, they had 5194 locations in the United States.
Any movie not returned to the same location was subject to late fee charges.
representing in the year 2004 close to 600 million dollars (10% of its revenue). The
consumers saw this business model as normal, but in their minds, it always lingered the
bad taste of paying for a service "not requested".

They had 44 distribution centers across the United States. The main plan of
subscription offered unlimited monthly rentals, allowing customers to have up to three
movies at the same time for a monthly fee of 17.99 dollars. By the end of the year 2006
they achieved sales exceeding one million dollars offering nearly 2500 different titles for
store.
Its subscription-based business model was launched in 1999. Netflix premiered a service of
subscription that offers unlimited DVD rentals for a low monthly price. In the year 2000, one of
the most important news from this company was the introduction of the rating system and
recommendation of its users, which served as a reference for consumption for others. In fact, this
the modality is still maintained and perfected every day, through an area that is in charge
exclusively from the knowledge and behavior of the user and which is very coherent with the
new reconfigurations of the audiences, characterized by the personalization of the
contents.

Netflix went public in 2002 with a record membership of 600,000 dollars in the U.S.
Netflix makes its initial public offering (on Nasdaq, under the symbol "NFLX"). The shares are
They are initially offering at $15 per share, with an initial offering of 5,500,000 shares. The company
closes the year with around 857,000 registered Netflix accounts. Since then, Netflix has
has consistently been one of the best performing stocks in the S & P 500.

The company celebrates 1 million accounts in 2003 This year, Netflix reaches a new record in
number of members, with more than 1 million. The company also issues a patent with the Office
of Patents and Trademarks of the United States for its subscription rental service, with some
other extensions.

Video streaming was introduced in 2007: Netflix launched a streaming service called
Watch now, which allows members to instantly watch television shows and movies.
on their personal computers. This was a major shift in the company's business model.
Initially, the service was launched with only 1,000 titles and only worked on PC and Internet Explorer.
It also offered a limit on the amount of free broadcasting hours (with a maximum of 18
free hours per month), according to the users' subscription plan. Netflix also took care
to say that they felt that DVDs would be available for a long time. Despite these
limitations, it soon became clear that streaming was the future of entertainment. By the end of 2007,
Netflix had 7.5 million registered subscribers, nearly 20% more than the previous year.

Netflix first established itself as a distributor of third-party content and, since 2013,
as a producer of original content, what has revolutionized the film and television industry,
incorporating the internet and new screens; Smart TVs, tablets, and phones as the first window or
display platform, which has generated a complete break in the traditional business in the
industry of cinema.

Located in the entertainment sector, Netflix is responsible for showcasing third-party productions and,
since 2013, to distribute and produce its own audiovisual content such as series, movies
documentaries. By positioning themselves on the internet as the main distribution platform for their
services and content is considered an OTT (Over the top or above the cloud) company, which
has also enabled significant international expansion and incorporate innovations in the
provision of its online video service. In the same year, it premieres on the platform its
first series of its own production, House of Cards, and two years later does the same in format
movie with Beast of No Nation, released in this case simultaneously on the platform and in
the usual circuit of cinemas.

This is how Netflix challenges this traditional distribution scheme and bets on it in 2013.
launch of the first series for a high-quality and budget web platform: House of
Cards, and in the year 2015 it released its first original movie, Beast of No Nation, premiered
simultaneously in cinemas and on its online platform. These two Netflix productions
they consider then two major milestones that mark a new direction and new challenges for the
film and television industries in the world.
The value proposition

The main characteristics of the service are its ubiquity and customer autonomy, the consumer.
choose what you want to watch, when, where, and how. Additionally, customers can play, pause, and view
ad-free content, a monetization model completely opposite to television
traditional, which is funded through advertising from brand advertisers.

Contents: The variety of contents is the core of the value proposition with documentaries,
movies, third-party television series, local and regional content, and original series are the
alternatives that are distributed through its streaming system in the SVOD modality
(Subscription video on demand), where customers must pay a flat fee starting at 7.99
dollars for normal quality and one screen; $9.99 for HD 2 screens; or $11.99 for UHD quality
and four screens.

Netflix has adopted a strategy of a set of benefits for customers:

Enhance the streaming experience of its users through a wide range of content
series and movies, through major licenses and development of original productions
 Netflix continuously improves the service it provides by enhancing its interfaces, plans,
promotions
Extender streaming services to as many devices as possible
Allow that users can use the Netflix service outside their country of origin
Release the output restrictions on subscribers
Offer to its clients the possibility of having more than one subscriber per user
To grant one month free for new subscribers
Offer a help and support center for its customers, via web or remote access

Positioning and communication

Netflix aims to be the best global entertainment distribution service through content.
original and licensed. Netflix is one of the brands that has gained the most global notoriety in the
last years due to its strategic policy, business volume, communication policy, and
content offer. Netflix fulfills its main brand promise through a
online platform where the consumer has the possibility to access the best via streaming
market contents.

Original content that generates engagement with users and facilitates establishing
lasting relationships. Content that offers experiences and reflects the personality of the
brand, an innovative brand that always wants to stay one step ahead of the competition,
offering its clients the possibility to live and create their own experiences within the
platform.

The brand's promise is revealed in the following phrase:

We connect people with stories to love.

The branding agency Gretel establishes the global brand claim: "See what's next." Around
This sentence implicitly conveys the opportunity offered to the user to discover
permanently new stories through the great offer of very high quality content from
that the brand provides, creating engagement through the generation of unique experiences with its
users.

The communication strategy is implemented through the development of a plan forcommunications

integrated marketingwhere the efficient work of intelligence based on the use of big data stands out
data, user feedback through social media, the uniform and coherent narrative through
from storytelling work and branded content where proprietary content feeds back into the
brand promotions.

The brand is making an investment in marketing focused on establishing its global, regional, and local position.
adapting to local markets with advertising campaigns and communication actions
concrete actions that seek impact and virality, where the platform's content is the
main protagonists. Netflix's use of social media is very active and dynamic,
close to the user, using a casual tone where humor connects strongly
with their target through the activation of close and personalized conversations with their
users.
The main strength in theintegrated communicationsof brand within the case of Netflix is the
content marketing, and branded content. The content offered by the...
platform for all types of non-intrusive communication actions aimed at connecting
a relevant way with your target group. This strengthens recognition and
image of your brand, likewise manages to activate the promise of a unique and memorable experience.

Describing your great innovative, bold, and nonconformist spirit in the sector. Always seeks
new ways to improve satisfaction and engagement with its users. Its purpose is to
engage with stories through curiosity and expectation: What will happen next, in
the next chapter, in the next season...? What will Netflix bring us next?

A brand that expresses itself as it is in all its points of contact and interaction with
your clients.
Netflix Branding: MotionfromGretelonVimeo.
Know your customers

Netflix understands that the customer is at the center of the brand's actions in order to
satisfy their main needs for entertainment, socialization, and time use
free.

The basic idea of Netflix's value is to give the audience what they want. They know that their success and
stay depends on the satisfaction of the customers who hire their services. They use
algorithms that analyze viewing habits and attitudes of each registered profile.

These algorithms are capable of analyzing the type of content that each viewer prefers to watch, the
time spent watching it, sudden interruptions (stopping watching a program due to
boredom or tiredness…

All that information helps to decide which content each of the users likes.
what is used in recommendation lists.

At the content marketing level, this data helps the company to know its audience in depth.
clients and knowing who they are targeting, which is very useful when it comes to establishing
novelties and advertising campaigns.

Big Data helps Netflix analyze its customers, the market, and in this way, continue.
growing by improving the service to its subscribers through content, personalization,
usability and personality. With the management of information and user data, Netflix bets on the
technological development in order to offer a service that is completely adapted and personalized,
taking the brand throughout its existence to seek the best way to manage data and
gather feedback from its users. This fact has been decisive for having an offer
totally micro-segmented and personalized thanks to investments in big data, until reaching the
algorithm that the brand works with, which includes the proper use of artificial intelligence.
One of the uses that Netflix gives to artificial intelligence is the production of trailers.
'personalized'. For this, they compare large groups of information and produce fragments of
three minutes, directed at each user. Every time the user logs into Netflix and watches their series
favorite movie, the system collects that information and generates an analysis that is used either for
personify the interface, edit trailers or provide suggestions that match their tastes and
interests.
It also collects data such as playback frequency, the time of day, and the date.
the ones that viewers enter into the platform, as well as the location. The data is
anonymized to not compromise user privacy, but allow the company
identify key aspects about group consumption forms. For example, that users of
Netflix users prefer to binge-watch series or that the audience consumes movies faster.
of a director or an actor. The decision-making through the use of big data at Netflix guarantees the
efficiency of results in all its areas such as investment in external content, typology
themes of the contents, own content production and the development of their strategies
marketing and advertising.

The contents

Netflix is very clear that it is in the content business, with a wide variety and personalization.
of its offer. Netflix not only offers foreign series and movies (whose licenses it obtains), increasingly
they have a greater weight in their offer of their own productions. The marketing strategy of
Netflix is based on the quality of content seeking what most interests its users. Nowadays
in the audiovisual entertainment business, content is king, allowing for the creation of series and
movies tailored to their users. The brand channels its success through a bet
strategic for investing in the purchase and production of high-quality content that results
of interest to its customers. Netflix started its business as a distributor and over time transitioned to
become a producer of your own content, which gives you an important competitive advantage
and a seal of quality.

Original content

In July 2020, Netflix will reach the significant number of 59 new productions.
originals released at the same time, putting it at the forefront of the battle against its competitors.

The audiovisual content platform knows its users' habits like few companies do.
users, and can determine the chapter and scene in which someone gave up watching a series.
Directs great efforts and considerable resources to adapt its content to the person who
the consumers and their preferences in terms of language and device.

Competition

The last two years have not been easy for Netflix. From having control of the market, it has had to
face multiple competitors. This also affected the variety of their original catalog and
forcing them to remove numerous iconic contents.
The systematic cancellation of the Marvel series that Netflix co-produced was followed by the very public
HBO Max's strategy to remove Friends, which ultimately became a symbol of the
the ability of new competitors to confront the strong power and capacity of Netflix.

For Netflix, the arrival of Disney Plus, HBO Max, Hulu, Apple TV Plus, and Amazon Prime Video meant
a battle to maintain their position within the preference of the public and their participation in the
market. In addition to ensuring that its catalog, which until a couple of years ago depended on
third parties, increasingly the own content and autonomy will take on greater significance
relevance.

Television industry experts predict that Disney will overlook the channels of
distribution, in which movies and series traditionally premiere their content,
publish almost all their productions on their new platform. "They have a great ambition with Disney
+, as for the first time they will have the opportunity to connect directly with their consumers.
Disney, with the strength of its brand, its characters, and its content, will achieve in the short term.
an important market share.

Disney+ expects to have, by the end of 2024, between 60 and 90 million subscribers worldwide.
comparison with the 158 million that Netflix currently has. The subscription will cost 6.99
dollars per month, and will have exclusive access to the successes of Star Wars, Marvel, Pixel
and the Disney studios. By the year 2020, the company allocated 1 billion dollars for the
original programming. In 2018, Netflix spent 12 billion, while Amazon and Apple
they spent 6 billion.
Watch the video to complement the competitive analysis...
The barrier of 182 million paid subscribers was widely surpassed in April 2020.
These are distributed among the more than 190 countries in which Netflix operates: to put it simply, it is
everyone except China, North Korea, Iran, Syria, and the Crimean Peninsula. Their record of
original series and movies were produced in 2016: no less than 126 premieres throughout the year, it
which is equivalent to one every two or three days. It is impossible to give a total number of Netflix Originals, since
that figure keeps multiplying every week.
Netflix Timeline

1997 Reed Hastings and Marc Randolph co-founded Netflix to offer movie rentals.
online as a response to the service problems of the competition.
1998 Launch of [Link].
1999 Monthly subscription service that offers unlimited DVD rentals as great
differential
2000 Personalized movie recommendation system based on ratings of the
members. As a personalization strategy
2002 Public offering on the stock exchange.
2005 Subscribers total 4.2 million.
2007 Members can instantly watch TV shows and movies on their
personal computers. The streaming era begins.
2008 Transmission via Xbox 360, Blu-ray disc players, and set-top boxes.
2009 Transmission via PS3, TV connected to the internet.
● 2010 Available on Apple iPad, iPhone and iPod Touch, Nintendo Wii and other devices
connected to the Internet. Netflix launches the service in Canada. Global expansion begins
2011 Service in Latin America and the Caribbean.
2012 Available in Europe, including the UK, Ireland, and the Nordic countries. Netflix
wins the first Primetime Emmy award in Engineering. The competition for quality of the
contents.
2013 Netherlands. Netflix receives 31 nominations for the Primetime Emmy Awards, including
the best dramatic series, the best comedy series, and the best documentary or special of no
fiction for "House of Cards", "Orange is the New Black" and "The Square", respectively.
House of Cards won three Primetime Emmy awards. Netflix was the first network to
internet television nominated for a Primetime Emmy award.
2014 Service in six new countries in Europe (Austria, Belgium, France, Germany,
Luxembourg and Switzerland). Netflix won 7 Creative Emmy Awards for "House of Cards" and
"Orange is the New Black" has gained over 50 million subscribers.
For to know the history of Netflix from2015 to 2020, continue reading through this link