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Netflix

Netflix-logo.jpg

Netflix, Inc. is the world's largest company which is an American provider of on-demand Internet streaming media. It is available to viewers in North and South America, the Caribbean, and parts of Europe (Denmark, Finland, Ireland, the Netherlands, Norway, Sweden, and the United Kingdom). Flat rate DVD-by-mail service in the United States is mailed DVDs are sent via Permit Reply Mail. [1] [2]


History

The company was founded in 1997 and is headquartered in Los Gatos, California by by Marc Randolph who was a co-founder of a computer mail order company, MicroWarehouse, and Reed Hastings. Its website was began on August, 1997. The company introduced the monthly subscription-based digital distribution service in September 1999. Single rental model was launched in 2000. Their partner, USPS sent out 1 million DVD everyday in 2005. In 2007, the company announced a billionth DVD delivery and online video streaming service started.In April 2011,they announced 23.6 million subscribers in the United States and over 26 million all over the world. Today, the company is one of the biggest Internet video streaming service. Service is assessable on smart TV, computer, mobile device, game console, and TV set-top box. They have over 48 million members and provides one billion hours of TV shows and movies to over 40 countries per month. [3]


A Brief History [4]

  • 1997

Reed Hastings and fellow software executive Marc Randolph co-found Netflix to offer online movie rentals.


  • 1999

Netflix launches the subscription service, offering unlimited rentals for one low monthly subscription.


  • 2000

Netflix launches the personalized movie recommendation system that uses Netflix members’ ratings to accurately predict choices for all Netflix members.


  • 2002

Netflix ends the year with 857,000 members, up 88 percent from 2001. Netflix makes its initial public offering (IPO) of 5,500,000 shares at $15.00 per share on Nasdaq under the ticker “NFLX.” Total Netflix members at the time: 600,000 - May 22, 2002


  • 2003

Netflix ends the year with 1,487,000 members, up 74 percent from 2002.


  • 2004

Netflix ends the year with 2,610,000 total members, up 76 percent from 2003.


  • 2005

Netflix ends the year with 4.2 million members, up 60 percent from 2004.


  • 2006

Netflix launches the Netflix Prize, promising $1 million to the first person or team who can achieve certain accuracy goals in recommending movies based on personal preferences. The company releases 100 million anonymous movie ratings ranging from one to five stars, the largest such data set ever released. Netflix ends the year with 6.3 million members, up 51 percent over 2005.


  • 2007

Netflix introduces streaming, which allows members to instantly watch television shows and movies on their personal computers. Netflix ends the year with 7.5 million members, up 18 percent over 2006.


  • 2008

Netflix partners with consumer electronics companies to stream on the Xbox 360, Blu-ray disc players, TV set-top boxes and the Apple Macintosh computer. Netflix ends year with 9.4 million members, up 26 percent over 2007.


  • 2009

Netflix partners with consumer electronics companies to stream on the PS3, Internet connected TVs and other Internet connected devices. Netflix awards the $1 million Netflix Prize to the "BellKor's Pragmatic Chaos" team of seven researchers from four countries; over three years the contest has attracted more than 40,000 teams from 186 countries. Netflix ends the year with 12.3 million members, up 31 percent over 2008.


  • 2010

Netflix is available on the Apple iPad, iPhone and iPod Touch, the Nintendo Wii, and other Internet connected devices. Netflix launches in Canada. Netflix ends year with 20 million members, up 63 percent from 2009.


  • 2011

Netflix launches throughout Latin America and the Caribbean.


  • 2012

Netflix surpasses 30 million members globally Netflix wins first Primetime Emmy Engineering Award Netflix launches in the United Kingdom, Ireland and the Nordics


  • 2013

Netflix original series House of Cards launches Netflix launches in the Netherlands House of Cards wins three Primetime Emmy Awards Netflix now has over 40 million members globally


Competitors

Hulu, Redbox instant, Amazon instant video, Vudu, HBO GO etc. Hulu Plus, Amazon Video, and other instant-streaming also offer similar services. Some of them are not easy to access to watch TV shows or movies anytime such as Netflix. However, others like Redbox or Amazon Instant Video provide you to pay one time fee for one movie, this is convenience for people who don't often watch movies or TV show every month.


Services

Only New Members: starting from $8.99 a month Current Member, joined before May 1st, 2014: starting from $7.99 a month The company offers a different level service with several pricing option. [5] [6]

Internet Video Streaming In addition to disc rental service, the company offers an internet video streaming service. Members can access to Netflix's online content library and select movies. Disc rental have more movies available.

Disc Rental In the United States, the company offers a monthly flat-fee service($8.99) for renting DVD and Blue-ray Discs. Its delivery service is mailed by the United States Postal Service with shipping free.

Opportunities and threats for Netflix

Opportunities for Netflix

• International venture into the countries like England, Canada and Netherlands has opened up a lot of market for Netflix

• Current reputation has helped the company to manage a positive growth in stock price. Netflix stock price.jpg

The stock price trend of Netflix over 10 years is shown in the above chart. The chart shows that the stock price has consistently increased since 2012.

• Introduction of huge number of online streaming facility enabled electronics devices has opened up a lot of potential market for the company.

• Reasonable and transparent pricing strategy along with low fixed cost has made Netflix a very viable option for the customers.

Threats for Netflix

• Social media as well as other entertainment industries has shifted their focus on, that leads to a fierce competition from the players like Amazon, Google, Hulu, Redbox, YouTube.

• The business got affected by the global financial problems.

• Premium service is very expensive as compared to other players.

Threats for Netflix

1. https://pr.netflix.com/WebClient/Login.jsp

2. http://www.fundinguniverse.com/company-histories/netflix-inc-history/

3. http://www.nbcnews.com/id/17331123/

4. "Netflix Media Center".

5. http://netflixreview.com

6. http://www.usatoday.com/story/tech/2014/05/09/netflix-price-increase/8891399/

7. "Nemcick-Cruz , Margie . "The Makes Sense Road to Wealth: Netflix SWOT Analysis- Strengths and Weaknesses. Valuation too high." The Makes Sense Road to Wealth: Netflix SWOT Analysis- Strengths and Weaknesses. Valuation too high. N.p., 1 Jan. 2012. Web. 09 July 2014. <http://obvious-stock-picks.blogspot.in/2013/12/netflix-swot-analysis-strengths-and.html#!/2013/12/netflix-swot-analysis-strengths-and.html>.

8. "Faruk , Ishfaque . "Netflix: A SWOT Analysis." . N.p., March. 2014. Web. 09 July 2014. <http://beta.fool.com/ishfaque/2013/03/14/netflix-a-swot-analysis/26968/>.