Netflix: Leveraging Big Data to Predict Entertainment Hits
| Case Code: ITSY075 Case Length: 18 Pages Period: 2009-2013 Pub Date: 2013 Teaching Note: Not Available |
Price: Rs.500 Organization: Netflix Industry: Service, DVD Rental, Online Video Streaming Services Countries: US, Global Themes: Information Technology, Big Data, Market ResearchBusiness Intelligence |
Abstract Case Intro 1 Case Intro 2 Excerpts
Background Note
Netflix was started in 1997. In 1999, the company introduced a DVD subscription service, providing unlimited rentals on a monthly subscription basis. In 2000, it introduced the personalized movie recommendation mechanism that employed subscribers' ratings to forecast the preferences of all Netflix subscribers. Toward the close of 2007, Netflix was shipping around 1.6 million DVDs on a daily basis. In 2007, the company also launched its video streaming services in the US, and, in 2010, began the global expansion of this business. As of March 2013, Netflix, Inc. functioned in three categories: Domestic Streaming, International Streaming, and Domestic DVD.
The Domestic DVD business provided DVDs-by-mail subscription services in the US. Under the streaming services, Netflix provided an Internet television network service that allowed subscribers to stream TV programs and films directly on TVs, computers, and mobile gadgets in the US and globally.
As of December 31, 2012, Netflix had 27.15 million subscribers for its streaming service in USA. Subscribers in other parts of the world totaled 6.12 million. The subscribers to Netflix's mail order business totaled 8.22 million. As of November 2012, Netflix accounted for 33% of the peak period video streaming traffic in North America. As of March 2013, the company's subscribers in nearly 40 nations were viewing close to 1 billion hours of TV shows and movies on a monthly basis.
As of March 2013, Netflix was charging US$ 7.99 per month from each of its video streaming subscribers in USA. For the year ended December 31, 2012, Netflix had generated revenues of US$3,609.3 million and net income of US$17.1 million (Refer to Exhibit I for Netflix's financial performance from 2005 to 2012).
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