Netflix-The Way Ahead

Case Code: BSTR678
Case Length: 13 Pages
Period: 2007-2022
Pub Date: 2024
Teaching Note: Available

Price: Rs.400
Organization : Netflix, Inc
Industry : Leisure & Entertainment
Countries : United States
Themes: Corporate Strategy, Business Environment, Business Level Strategies

Abstract Case Intro 1 Case Intro 2 Excerpts

Excerpts

Troubles Surface

During the Covid-19 induced lockdowns in 2020, people were confined to their homes. Their entertainment was limited to television and streaming services. People across the world subscribed for streaming services. Netflix with its reach and popularity was their first choice. Netflix started off the year 2022 on a positive note and analysts predicted that it would add 20 million subscribers during the year. In April 2022, an analyst from JP Morgan said that it would add around 18 million subscribers. In contrast to these predictions..

Revival Plans

Even in 2019, Hastings was against turning to advertisements for revenue. In 2019, the company announced, “When you read speculation that we are moving into selling advertising, be confident that this is false. We believe we will have a more valuable business in the long term by staying out of competing for ad revenue and instead entirely focusing on competing for viewer satisfaction.” But in 2022, with the exodus of subscribers, Netflix announced that it would go in for ad-supported subscription and hoped that it would be able to reduce prices for the service, and attract more consumers..

Is netflix on the right path?

For years, Netflix stayed away from certain things – Live TV, Live sports, advertisements, and weekly release of content. At the same time, it did not have other revenue streams like its competitors. Disney had theme parks, Apple had devices, and Amazon’s main business was e-commerce. They were all diversified companies whose stock price did not depend solely on one business. HBO and Paramount released movies in theaters and collected millions of dollars before giving them to the streaming services. Without theatrical releases, Netflix was losing out on this too..

Exhibits

Exhibit I:Using Technology to Connect with customers
Exhibit II: Netflix – Popular Shows
Exhibit III: Netflix – Consolidated Statement of Operations
Exhibit IV: Netflix Stock Price Chart
Exhibit V: Netflix – Competitors

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