EBM Presentation

Netflix, Inc.

Giovanna Correa

10 December 2016

Carol Wonsavage

Entertainment Business

Models Full Sail University

• Mission of becoming the best

global entertainment distribution

service.

• Best way to watch anything

without needing to leave home.

• Treat their employees with respect

and help to develop their career.

Why I chose this company:

American multinational entertainment

company founded on 29 August 1997 in

California

In 2007, Netflix grew its

business by expanding

itself with the introduction of

streaming media.

Statistics say that on January

2016, Netflix was available in

over 190 countries.

Netflix entered the film and

television industry in

2013, debuting its first series called ‘House

of Cards’.

The company is releasing an estimated 126 original series

or films in 2016.

The monthly subscription has three different types: basic, standard and premium, with prices ranging from $8 to $12.

Netflix reported over

86 million subscribers worldwide.

Background Information

o Diversified mass market

• Based worldwide;

• Age range from 18 to 59 years;

• Very dynamic;

• Constantly changes;

• Follows technology innovations

and consumer behavior;

• June 2013 had 36.7 million people

subscribed to Netflix (spend 2

billion hours watching Netflix);

Customer Segments

Legal access to the rich movie database with

more than 20,000 episodes.

Customers’ ratings are used

for the recommendations

Rating enables a better use of

movies available on the website

Has one of the widest supported

devices ranges (mobile,

computer, game consoles)

Convenience and usability by the ease that is

having access to the service

Customized browsing gives customers full

control over their experience

Price is relative to the billions of

hours of content that Netflix can

provide on their streaming

service.

Value Proposition

• Online streaming service since

2008, using the website for

computers and its application

for smartphones, tablets,

game consoles and other

platforms.

• DVD and Blu-ray discs rental

by mail;

Channels of Distribution

Value of no-commitment; efforts to continue bringing

exclusive original high-quality content to get subscribers.

Chances of reaching a potential

subscriber are higher; those

specific people already spend some of their time on the

Internet.

Online subscription-based entertainment

video service = online advertising; social media and web-browsing.

Customer Relationships

• Contracts with Major

Companies;

• Providing Content;

• Marketing;

• Video on Demand;

Key Activities

Key Resources

Top-quality streaming media infrastructure:

mandatory requirement.

Staff: A well-trained staff able to function

each duty.

Licensing: Customers subscribes to be given the license required to stream on the multiple platforms.

• Internet Providers;

• Television Networks

and Motion Pictures;

• Amazon Servers;

Key Partners

• External content: must pay for the

license cost;

• Technology and Development Cost

o Fund the streaming processes;

o Improve the originality;

• Marketing;

• Administrative costs;

• DVD Warehouse Operation;

Cost Structure

Cost Structure

Monthly no commitment membership

fee:

62% of the total revenue for domestic streaming; 23% of the

total revenue from

international streaming.

Domestic DVD and Blu-

ray rental services:

Around 13% of the total revenue.

Declined from 31.5% in 2012

to 13.9% in 2014.

Revenue Streams$6.78 billion - 2015

• To grow its business and increase profitability,

Netflix should focus more on customer segments

and cost structure.

• Strategy to grow more of its streaming subscription

database both domestically and internationally;

• Small net profit compared to the billions of gross

revenue; these high expenses is the flaw in the

Netflix business model;

• To continue retaining the customers, focus also on

the key resources from the key partners as they

strive to reach customers through the various

channels.

Conclusion

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