Joelle Abi-Nader, Megan Quinn, Alex Ratajczak, Stephen Chen

Objectives•Company growth•Features•Technology•Competition•Future

12 Things You Probably Did Not Know

https://www.youtube.com/watch?v=Puv1lS00ho0

Past Five Years2010- Available on iPad, iPhone, iPod, Nintendo Wii

Canada

2011- Latin America and Caribbean

2012- UK, Ireland, and Nordic countries

Wins first Primetime Emmy Engineering Award

2013- Netherlands

Earns 31 primetime Emmy nominations for original

series

2014- Austria, Belgium, France, Germany, Luxembourg,

Switzerland

Wins 7 creative Emmy Awards for House of Cards

and Orange is the New Black

Interesting Statistics

● Total number of Netflix subscribers: 57.4 million

● Number of Netflix subscribers in U.S.: 39 million US subscribers

● Number of hours per month that users spend watching Netflix: Over 1 billion hours

● Percentage of Netflix users that binge-watch shows at least every few weeks: 61%

● Amount of storage that Netflix needs: 100 to 150 terabytes per server

Video

https://www.youtube.com/watch?v=5rMVOfZXQdI

Netflix Features ● 30-day free trial membership

● English subtitles

● Three planso Basic- unlimited streaming $7.99 / montho Add 1 disc DVD delivery additional $7.99 / montho Two DVDs at a time costs $11.99 / month

● Licensing deals with CBS, ABC, Fox, NBC, Starz, BBC, Sony

and DreamWorks

● Commercial-free platform

● Compatible with: PC, Xbox 360, PS3, Nintendo Wii,

Internet-ready TV, Roku, Android, Blu-ray player, Nook

or other e-reader tablet, and iOS devices

Original

Content

Discussion Question

How do you watch Netflix?

How do you personally feel about the “Recommended For You” List?

The Technology Behind It● Recommendations

o $150 Million/year, 300 Peopleo A/B Testingo No bad shows, only shows with

small audienceso Streaming from the cloud

● Profileso Different people get different

profileso Family filtering

Streaming Issues● DVD to Streaming

● Problems Behind Streamingo TV vs. Movieso Cost Increaseso Licensing Renewal

Tech Management

● Data Organization that Works with Businesso 3 Separate Teamso Collaboration

● Product Teams vs. Content Buyerso The right shows for the right people

Discussion Question

How do you feel about Netflix losing out on movie streams and going more towards television shows?

The Qwikster Debacle

• Split costs of DVD-by-mail plans and streaming plans

• Separated two services entirely

• Qwikster → DVD-by-mail plans

• Netflix → Internet streaming plans

• Required users to open two accounts and

pay two separate companies monthly

• Increased costs for consumers

• Before launch, Netflix cancelled Qwikster plans

Disruptive Technology?● 47% of all U.S. households subscribe to

an internet television service● 49% of households have at least one TV

connected to the internet● 78% of all Netflix subscribers watch their

videos on a TV● Number of people who cancelled pay TV

subscriptions who also subscribe to Netflix

rose from 16% in 2010 to 48% in 2014● 5 million U.S. TV households rely exclusively

on internet TV, but 10% of all TV households

may cancel that service in the next 10 months

Discussion Question

Do you think that pay TV will be replaced with internet TV in the future?

Would you ever consider cancelling your cable subscription and solely relying on Netflix for television? Why or why not?

SWOT AnalysisStrengths• Brand Recognition• Convenience• Original Content

Weaknesses• Cost of Content• DVD Subscribers• Qwikster Failure

Opportunities• International Expansion• Original Content• Advertising

Threats• Competition• Licensing Prices

Competitors

● $7.99 per month● Free 1 week trial● Up to date show selections● Mobile, tablet, TV, gaming devices● Limited movie selection

● $99 per year, approx. $7 per month● Free 30 day trial● Free two-day shipping● Commercial free● Mobile, tablet, TV, gaming devices● Decent movie selection

Discussion Question

Do you use Netflix, Amazon Prime, or Hulu Plus more? Why?

Netflix Culture

● Hiring only "A" players

● Logic and common sense work

better than formal policies

● No formal reviews

● Rethink compensation policies

● Clearly define "high performance"

Goals for the Future

● 2015, spend over $600M in marketing

to attract people around the world

● 2015, invest over $500M on technology

development to improve service and app

● 2015, over $3B on content for members

● End of 2016, available mostly everywhere

in world

● By 2020, grow to 60-90 million members in

the domestic market based upon trajectory