Apple Netflix Pitch Team Yellow Doyle

7/22/2019 Apple Netflix Pitch Team Yellow Doyle

1/20

Alex Blatt, Vanessa Boys Smith, DrewFann, Brie Hunt-Augustine, Chris Mullican


2/20


3/20

Why Netflix?

Integrated Customer

Experience

Good Cultural Fit

Increased Market

Share

Streaming & Content

Synergies


4/20

Apple TVNot your typical TV

Id like to create an integrated television set that is

completely easy to use. It would be seamlessly syncedwith all of your devices and with iCloud. It will have thesimplest user interface you could imagine. I finallycracked it. Steve Jobs


5/20

Apple TV is Our New iOS Platform

Leveraging our Next Portfolio Product

integrated with iTunes and App

Store = new monetization opportunities

through capture of streaming market share

New User Experience

Fully integrated living room experience

Deeper content relationship

Leveraged synergies with a combined user

base


6/20

In House:MacOSx

iPhone,iPad, iPods

Solid StateFlash

Storage

Acquisition2011

TV as Platform

IntegratedUser

Experience

*AppleTV*

StreamingContracts

Acquisition NeedVertical

IntegrationOutcome

Design Efficiency

Production Cost

Savings

DistributionEfficiency

Design Efficiency

(Apple TV

Integration)

Production Cost

Savings

(Contracts)

Distribution

Efficiency

(Streaming &

Market Share)

Competitive

Edge


7/20

Movie Streaming on Apple TV:

Capturing Market Share

23.8 million subscribers

22 m il l ion s tream ing

70%

30%

The DVD Streaming

Market

Other

Netflix


8/20

Pricing Model

Basic Membership - $7.99 per month

Premium Membership - $14.99 per month

Conservative Year 1 2 3 4 5

Total 782$ 978$ 1,131$ 1,250$ 1,355$

Total 808$ 1,091$ 1,363$ 1,636$ 1,881$

Expected

Millions

Millions


9/20

Comparative Value with sensitivityanalysis

DCF Earnings Multiple

$17B

$16B

$15B

$14B

$13B

$12B

$11B

$10B$9B

$8B

$7B

$6B

$5B


10/20

Added Value

$17B

$16B

$15B$14B

$13B

$12B

$11B

$10B

$9B

$8B

$7B

$6B

$5B

Netflix Value Mem. Rev. iTunes Etc. Outside Me Total Rev.


11/20

Netflix current valueOur OFFER

$ 12.5 Billion

Divested owners Joining 50%cash/ 50%100% cash in Apple Stock


12/20

Current Value ChainContent &

Services

MobileMe

iCloud

Content

Aggregation

iTunes

iBooks

App Store

Hardware &

Software

Platforms

MacOSx

iWorks

Appliances

Mac

iPhone

iPad iPod

Apple TV

Retail &

Distribution

Apple Store

Telecom

Competitor

Hardware


13/20

Value Add: Vertical Integration

Content &

Services

MobileMe

iCloud

Content

Aggregation

Netflix Streaming

Technology

iTunes

iBooks

App Store

Hardware &

Software

Platforms

MacOSx

iWorks

Appliances

Mac

iPhone

iPad

iPod

Apple TV

Retail &

Distribution

Apple Store

Telecom


14/20

Apples Innovative Culture

o EverythingImportant Internally

Make a Dent in the

Universe

Control the

Message

Get

Marketing

Love &

Cherish

the

Creatives

Values,

not Rules

Do Whatis

Important

Freedom

&

Flexibility

ThinkDifferent

Empower Employees

to Make a Difference


15/20

o EverythingImportant Internally

Make a Dent in the

Universe

Control the

Message

Get

Marketing

Love &

Cherish

the

Creatives

Values,

not Rules

Do What

is

Important

Freedom &

Flexibility

ThinkDifferent

Empower Employees

to Make a Difference


16/20

Apple-Netflix Integration Team

Integration Change Management

COMMUNICATION ORGANIZATION CULTURE

Head of iTunes

HR, Apple

COO, NFLX

HR NFLX

Responsible for vision,

direction and prioritization

of all integration efforts

CEO, NFLX R&D Apple TV

Apple CEO


17/20

Integration Initiative

Communication Organization Culture

Facilitate integration

effectiveness

Align Apple and

Netflix to increase

efficiencies and realize

synergies

Minimize integration

risks due to cultural

differences

Organize all

stakeholders

Establish 2-way

feedback

Launch internalcommunication

campaign

External PR

Campaign

Maximize

stakeholder buy-in

and involvement

Set cross-

organizationalhierarchy

Monitor retention

rates

Develop cultural

transition strategy

Deploy cultural

progress surveys

Put extra emphasison gathering

informal feedback

Goals

Actions


18/20

February | March |October | September

Begin

integration

due diligence

Feb 1

Integration

Team

formed

Feb 8

Netflix is

acquired

Feb 1

Integration

Completed

September 1

Acquisition Timeline

Communication

Initiative

launched

Feb 8

Set cross

organizationa

l hierarchy

Feb 8

Monitor

retention

rates

March 1

Maximize

stakeholder buy-in and

involvement

March 1

Deploy

Cultural

Progress

Surveys

March 1

Gather informal

feedback

March - October


19/20

Netflix Will Benefit from theAcquisition

FiscalIncentives

Cultural Fit

CompetitivePositioning:

StreamingAdvantage &User Base

StrategicLeveraging:

AppleTV as aPlatform


20/20

Summary

Digital streaming experience unlike any other Netflix Digital Library & Subscribers

Seamlessly Synced Apple Platforms & iCloud

Service

Now: #1 Digital Video Streaming Market Share

Future:Streaming Content with Untapped Market Entry

Apple Netflix Pitch Team Yellow Doyle

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