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NetflixMarketLine.pdf
COMPANY PROFILE
Netflix Inc.
REFERENCE CODE: 0F65E223-CCF4-4CBF-A37F-BA7C747C2040 PUBLICATION DATE: 03 Mar 2020 www.marketline.com COPYRIGHT MARKETLINE. THIS CONTENT IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED OR DISTRIBUTED
A Progressive Digital Media business
Netflix Inc. TABLE OF CONTENTS
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TABLE OF CONTENTS
Company Overview ........................................................................................................3 Key Facts.........................................................................................................................3 Business Description .....................................................................................................4 History .............................................................................................................................5 Key Employees .............................................................................................................32 Key Employee Biographies .........................................................................................33 Major Products & Services ..........................................................................................35 SWOT Analysis .............................................................................................................36 Top Competitors ...........................................................................................................40 Company View ..............................................................................................................41 Locations And Subsidiaries ........................................................................................43
Netflix Inc. Company Overview
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Company Overview
COMPANY OVERVIEW
Netflix Inc. (Netflix) is an online television network streaming TV shows and movies. The company offers DVDs and Blu-ray titles to subscribers, apart from a separate library of movies. Netflix subscribers can watch unlimited TV shows and movies streamed over the Internet to their TVs, computers and mobile devices and also as receive digital versatile discs (DVDs) delivered to their homes. The company also offers free-trial memberships to new members and certain rejoining members. Netflix uses the services of third-party cloud computing providers such as Amazon Web Services, and other content delivery networks to stream the content over the internet efficiently. The company primarily operates in the US. Netflix is headquartered in Los Gatos, California, the US.
The company reported revenues of (US Dollars) US$15,794.3 million for the fiscal year ended December 2018 (FY2018), an increase of 35.1% over FY2017. In FY2018, the company’s operating margin was 10.2%, compared to an operating margin of 7.2% in FY2017. In FY2018, the company recorded a net margin of 7.7%, compared to a net margin of 4.8% in FY2017.
The company reported revenues of US$4,923.1 million for the second quarter ended June 2019, an increase of 8.9% over the previous quarter.
Key Facts
KEY FACTS
Head Office Netflix Inc. 100 Winchester Circle Los Gatos California Los Gatos California USA
Phone 1 408 5403700 Fax Web Address www.netflix.com Revenue / turnover (USD Mn) 15,794.3 Financial Year End December Employees 7,100 NASDAQ Ticker NFLX
Netflix Inc. Business Description
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Business Description
BUSINESS DESCRIPTION
Netflix Inc. (Netflix or ‘the company’) is an internet television network that offers movies and TV shows. It also delivers original series, documentaries and feature films on its screens. The company's subscribers can instantly watch content streamed to their TVs, computers and mobile devices and receive DVDs delivered to their homes as well. The company has a subscriber base of more than 139 million members across 190 countries globally.
The company operates through three reportable business segments: Domestic Streaming, International Streaming and Domestic DVD.
Netflix’s Domestic Streaming segment derives revenues from membership fees for monthly subscription services consisting of streaming content to the members in the US. As of December 31, 2018, the segment had 58.4 million paid memberships and 5.7 million net membership additions. In FY2018, the domestic streaming segment reported revenue of US$7,646.6 million, which accounted for 48.4% of the company’s total revenue.
The company’s International Streaming segment derives revenues from membership fees for monthly subscription services consisting of streaming content to members outside the US (such as Canada, the UK, Ireland, Sweden, Norway, Denmark, Finland, the Netherlands, Belgium, Luxembourg, France, Germany, Japan, Austria, Switzerland, Cuba, Australia, New Zealand, Spain, Italy, South Korea, Singapore, Hong Kong, Taiwan and Portugal). As of December 31, 2018, the segment had 80.8 million paid memberships and 22.9 million net membership additions. In FY2018, the International streaming segment reported revenue of US$7,782.1 million, which accounted for 49.3% of the company’s total revenue.
Netflix’s Domestic DVD segment derives revenues from monthly subscription fees for services consisting of DVD by mail. As of December 31, 2018, the company had 2.7 million memberships and 3.3 million paid memberships. In FY2018, the domestic DVD segment reported revenue of US$365.5 million, which accounted for 2.3% of the company’s total revenue.
The company also offers free-trial memberships to new members and certain rejoining members. Netflix uses the services of third-party cloud computing providers such as Amazon Web Services, and other content delivery networks to stream the content over the internet efficiently. Netflix ships and receives DVDs across the US. The company maintains a network of shipping centers that allow the company to provide fast delivery and return service to subscribers. Netflix also streams movies and TV shows instantly to members' TVs, computers and mobile devices over the internet. In addition, the company streams content on other internet-connected devices, including digital video players and TV set-top boxes. Netflix has agreements with various cable, satellite and telecommunications operators to make its service available through the TV set-top boxes of these service providers.
Netflix Inc. History
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History
HISTORY
Contracts/Agreements
Year: 2020
In January, Netflix and Ben & Jerry's partnered to launch new Chill'd ice cream.
Contracts/Agreements
Year: 2020
In January, Netflix and Sky signed a agreement to give Sky customers the option of taking up the Netflix Basic Plan on Sky Q in the UK.
Contracts/Agreements
Year: 2020
In January, Netflix partnered with Nexus Studios for dark comedy 'The House' series.
Contracts/Agreements
Year: 2019
In January, the company partnered with Hilton to provide Hilton guests to stream the Netflix series, movies and more on in-room televisions in Hilton’s Connected Rooms.
Plans/Strategy
Year: 2019
In February, the company announced its plan to open its office in Mexico City.
Corporate Changes/Expansions
Year: 2019
In February, the company announced to create a production hub in Toronto, Canada.
Acquisitions/Mergers/Takeovers
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Year: 2019
In April, Netflix announced its plans to acquire the Egyptian theatre in hollywood from American Cinematheque.
Plans/Strategy
Year: 2019
In July, Netflix announced its plans to launch a mobile-only streaming service in India.
Contracts/Agreements
Year: 2019
In September, Netflix and Canal Plus Group entered into a contract to distribute Netflix on Canal Plus's platform.
New Products/Services
Year: 2019
In October, the company introduced Polynote, a new and freely available multi-language programming notebook for its customers.
New Products/Services
Year: 2019
In October, Netflix launched a low-cost, mobile only plan in Malaysia.
Corporate Changes/Expansions
Year: 2019
In October, Netflix announced its plans to open new Europe, Middle East and Africa headquarters in Amsterdam, the Netherlands.
Others
Year: 2019
In December, Netflix open sourced Metaflow, a Python library for building and managing data science projects.
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Plans/Strategy
Year: 2019
In December, Netflix announced its plans to open a new office in Paris, France in January 2020.
Contracts/Agreements
Year: 2019
In December, the company collaborated with Tipping Point, the digital content arm of Viacom18 Studios to produce three drama series.
Contracts/Agreements
Year: 2019
In November, the company renewed its global partnership with TCL Electronics to allow Netflix content through a pre-installed Netflix app on TCL TVs.
Contracts/Agreements
Year: 2018
In June, Netflix and KDDI entered into a partnership to launch a new smartphone service to deliver online video streaming service.
Corporate Changes/Expansions
Year: 2018
In July, Netflix established the European production hub in Madrid.
Others
Year: 2018
In July, Netflix unveiled the launch dates of new web series, Madam C.J. Walker, Maniac and White Lines.
Contracts/Agreements
Year: 2018
In March, the company and PTCL signed an agreement to offer an online subscription video on demand
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to its subscribers.
Contracts/Agreements
Year: 2018
In August, Netflix and PEZ partnered to develop four new PEZ Dispensers to include in Stranger Things Gift Sets.
New Products/Services
Year: 2018
In August, the company launched Historia de un Crimen, a scripted crime-anthology series.
Contracts/Agreements
Year: 2018
In August, the company and Bharati Airtel collaborated to offer three month free subscriptions to new and existing subscribers of select Airtel Postpaid and V-Fiber Home Broadband plans.
Acquisitions/Mergers/Takeovers
Year: 2018
In September, Netflix acquired the rights of two Russian cartoons, Leo and Tig and Be-Be Bears.
Corporate Changes/Expansions
Year: 2018
In September, the company opened its new office in Paris, its third European office.
New Products/Services
Year: 2018
In September, Netflix to launch ReMastered, a new music history documentary series, under its original docuseries.
Contracts/Agreements
Year: 2018
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In September, Netflix entered into a collaboration with WIND Hellas to offer more Netflix benefits to its customers.
Acquisitions/Mergers/Takeovers
Year: 2018
In October, Netflix announced its plans to acquire ABQ Studios (Albuquerque Studios).
Plans/Strategy
Year: 2018
In October, Netflix announced its plan to open its Fourth European Office in Madrid, Spain.
Contracts/Agreements
Year: 2018
In October, Netflix entered into a partnership with EITC to enable du and Virgin Mobile customers with Netflix across TV and mobile services.
Contracts/Agreements
Year: 2018
In October, the company and Visa collaborated to utilize Visa tokens to improve secure the digital payments service.
Plans/Strategy
Year: 2018
In October, the company announced its plan to introduce new pricing models in India.
Corporate Changes/Expansions
Year: 2018
In October, Netflix announced to open a new studio-production hub in Albuquerque, New Mexico.
Plans/Strategy
Year: 2018
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In November, the company announced its plan to launch a few new foreign-language series.
New Products/Services
Year: 2018
In April, the company announced to launch a new adult animated comedy series Paradise, P.D. The series will be premiere later the year.
Contracts/Agreements
Year: 2018
In April, the company partnered with DreamWorks Animation Television for the expansion of Fast & Furious animated series.
Contracts/Agreements
Year: 2018
In April, the company signed an agreement with Tata Sky for its customers to browse and access the entire Netflix service through Tata Sky platforms.
Contracts/Agreements
Year: 2018
In May, the company and Telefonica integrated their services and video platforms in Europe and Latin America regions.
Contracts/Agreements
Year: 2018
In May, the company and President Barack Obama and Michelle Obama, entered into a partnership to produce films and series.
Contracts/Agreements
Year: 2018
In November, Netflix and Millarworld entered into a collaboration to launch Sharkey the Bounty Hunter as the next Millarworld franchise.
Contracts/Agreements
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Year: 2018
In April, Netflix extended its collaboration with COMCAST regarding the XFINITY X1 integration.
Corporate Awards
Year: 2018
In December, Netflix has been named as the Entertainer of the Year by The Associated Press.
Contracts/Agreements
Year: 2018
In June, Netflix expanded its partnership Virgin Media to provide its services to the new and existing Virgin TV customers with single billing.
New Products/Services
Year: 2018
In February, the company launched YG Future Strategy Office(FSO, working title), a new Netflix Original Series with YG Entertainment, home to some of Korea’s top talent.
Contracts/Agreements
Year: 2018
In February, the company signed a partnership agreement with OSN, marking a bold first step for industry collaboration and integration.
Acquisitions/Mergers/Takeovers
Year: 2018
In February, the company acquired the award-winning French-Canadian film Les Affames, one of the most unique voices in Quebecois cinema.
Contracts/Agreements
Year: 2018
In March 2018, the company entered into a partnership with Sky, Europe's leading entertainment company to offer full Netflix service into a brand new Sky TV subscription pack.
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Others
Year: 2018
In April, the company announced a second season of On My Block Teen Dramedy.
New Products/Services
Year: 2018
In March, the company introduced Netflix Sans, a new custom typeface developed with Dalton Maag.
New Products/Services
Year: 2018
In February, Netflix announced a slate of three new Indian original series.
Contracts/Agreements
Year: 2017
In November, Netflix signed an agreement with the Euskaltel Group to enable their customers to easily access Netflix content by directly using their 4K decoder.
New Products/Services
Year: 2017
In September, DISH announced to offer a whole-home 4K Netflix experience.
Corporate Changes/Expansions
Year: 2017
In August, the company announced to expand its investments in Latin America.
Contracts/Agreements
Year: 2017
In September, the company and Orange signed an agreement for the distribution of Netflix for Orange TV customers in France.
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New Products/Services
Year: 2017
In August, the company introduced two new Netflix original series from India, including Selection Day and Again series.
Contracts/Agreements
Year: 2017
in November, Netflix and Deutsche Telekom entered into partnership for provision of popular and exclusive content of Netflix to all screens
Plans/Strategy
Year: 2017
In July, the company plans to introduced its full services in Israel with Israeli TV shows, including in Hebrew.
Contracts/Agreements
Year: 2017
In June, Netflix and AIS partnered to offer the world’s favourite TV shows and films for AIS customers exclusively.
Contracts/Agreements
Year: 2017
In June, the company and Altice entered into a multi-year partnership to provide Netflix content to Altice customers in Israel, France, Portugal, and the Dominican Republic.
Contracts/Agreements
Year: 2017
In May, the company and Partner Communications signed a partnership to offer Netflix's services directly through Partner’s new television service.
Plans/Strategy
Year: 2017
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In April, the company planned to develop an app for Microsoft’s HoleLens Augmented Reality Headset.
Corporate Changes/Expansions
Year: 2017
In April, the company entered into a partnership with iQiyi.com, to enter into China, to continue its global expansion.
Acquisitions/Mergers/Takeovers
Year: 2017
Netflix acquired worldwide rights to Joshua: Teenager vs. Superpower film. The film, which is a June Pictures production, will launch later this year globally, as well as to Netflix’s more than 93 million members in 190 countries.
Acquisitions/Mergers/Takeovers
Year: 2017
The company acquired worldwide rights to Chasing Coral film, which is planned to release in 2017.
Contracts/Agreements
Year: 2017
Netflix signed a multi-faceted production deal with Jerry Seinfeld, a creator, producer, writer and performer. As per the deal, new episodes of ‘Comedians in Cars Getting Coffee’ will be telecasted on Netflix in late 2017.
Acquisitions/Mergers/Takeovers
Year: 2017
The company acquired worldwide rights to Kitty Green’s documentary. The film will launch on Netflix and in limited theatrical release in spring 2017.
Others
Year: 2017
Netflix announced its first Korean original series Love Alarm, based on the webtoon by Kye Young Chon, one of Korea’s well-known comic authors.
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Corporate Changes/Expansions
Year: 2016
The company shifted its entire IT operations to the Amazon Web Service (AWS) cloud computing platform.
Contracts/Agreements
Year: 2016
The company entered into a partnership with StarHub.
Contracts/Agreements
Year: 2016
In January, Netflix and LG Electronics partnered to expand he global on-demand Internet streaming operations of Netflix.
Contracts/Agreements
Year: 2016
The company and TiVo, one of the leaders in entertainment technology and audience insights, entered into a product and intellectual property licensing agreements, to enhance entertainment experience to consumers. As per the product agreement, TiVo will continue to integrate Netflix into TiVo set-top boxes available to consumers through a select, but growing number of pay-TV providers and retail stores. This agreement enables consumers to watch their favorite TV shows and movies anytime and anywhere, with an integrated experience across more devices. Further, the intellectual property agreement provides Netflix a license to the TiVo patent portfolios and Intellectual Ventures patent portfolio for over-the-top offerings.
Contracts/Agreements
Year: 2016
Netflix entered into an international licensing agreement with the South Korean film production and distribution company, Next Entertainment World. The agreement covers rights for Pandora, a highly- anticipated nuclear disaster movie from CAC Entertainment, which will stream exclusively on Netflix to its members in 190 countries, excluding South Korea, in 2017. The movie will be available to stream after its theatrical release in South Korea.
New Products/Services
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Year: 2016
Comcast and Netflix announced that the launch of Netflix service on millions of X1 devices across the US. X1 customers with Netflix subscriptions will be able to easily browse and access over the internet, a wide collection of Netflix TV shows and movies online alongside the live, on demand, DVR and web programming included with their Xfinity TV subscription.
Others
Year: 2016
The company ordered the first season of Scandinavian thriller, The Rain from Miso Film. The Rain is the first original out of Scandinavia that will premiere on Netflix across all its territories in 2018.
Others
Year: 2016
Netflix announced a new series, Atypical, from Sony Pictures Television. The new series will begin production in Los Angeles later in the same year.
Contracts/Agreements
Year: 2016
iPic Entertainment, one of the fastest-growing affordable luxury movie-watching experiences in the US, and Netflix partnered, to release select original Netflix films at iPic Theaters.
New Products/Services
Year: 2016
The company announced six new original animated shows: LEGO Elves, The Hollow, Kibaoh Klashers, Robozuna, Treehouse Detectives and Super Monsters. LEGO Elves, Kibaoh Klashers and Super Monsters will be launched in 2017; while Robozuna, The Hollow and Treehouse Detectives will be launched in 2018.
New Products/Services
Year: 2016
Netflix announced a truly Polish service, using local language, currency and adding Polish TV shows and movies in addition to Netflix's acclaimed original programming. Netflix also signed an agreement with its first local partner, mobile provider T-Mobile. During the same month, the company introduced a truly
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Turkish service. The service utilizes local language, currency and includes various Turkish TV shows and movies, in addition to Netflix's acclaimed original programming. In this regard, the company partnered with its first telecommunications partner, Vodafone and is already working with Vestel (a TV manufacturer in Turkey).
Acquisitions/Mergers/Takeovers
Year: 2016
The company acquired global rights to the film, Justin Timberlake + The Tennessee Kids.
New Products/Services
Year: 2016
Netflix launched four new non-fiction titles at the 2016 Toronto International Film Festival (TIFF). The new titles include Amanda Knox; Werner Herzog and Clive Oppenheimer’s Into the Inferno; The Ivory Game; and The White Helmets.
Plans/Strategy
Year: 2016
The company also announced plans to launch a new talk show, Bill Nye Saves the World. The new show is set to be launched in Spring 2017.
Others
Year: 2016
Netflix announced a new comedy series, Friends from College.
Contracts/Agreements
Year: 2016
The company and CBC partnered with Northwood Entertainment, for a dramatic television series, ANNE. The show will stream worldwide on Netflix and will be broadcasted in Canada on CBC in 2017.
Others
Year: 2016
Netflix, Grace: A Storytelling Company (Grace) and Beyond International (Beyond) announced, that a new animated original series for kids based on Jobete catalog of songs will be soon premiered on Netflix
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worldwide.
Acquisitions/Mergers/Takeovers
Year: 2016
The company acquired exclusive rights to Panama Papers: Breaking the Story of How the World’s Rich and Powerful Hide Their Money, a recently launched book by Obermaier and Obermayer. Netflix will team up with John Wells Productions to make a feature film based on this book.
Corporate Changes/Expansions
Year: 2016
Netflix launched its service globally, bringing its Internet TV network to over 130 new countries worldwide. This includes the launches in new markets, including South Korea, Singapore, Hong Kong and Taiwan. The company expanded its line-up of original content for kids of all ages with the addition of three new original series.
Contracts/Agreements
Year: 2016
The company expanded its partnership with DreamWorks Animation, making Netflix the global home, outside of China, to various new original series for the whole family from the studio. The agreement also includes streaming rights to the DreamWorks Animation feature film library. Further, the partnership extends Netflix’s rights of the current original series for kids from DreamWorks Animation studio available on the service throughout operating Netflix markets as well as second window rights for the series everywhere around the world, outside of China.
Contracts/Agreements
Year: 2016
The company partnered with BBC Worldwide North America, the commercial arm of the BBC, to commission and debut the season two of the Netflix original series: Scrotal Recall worldwide.
Acquisitions/Mergers/Takeovers
Year: 2016
Netflix acquired global rights to the action film, Wheelman.
Corporate Changes/Expansions
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Year: 2016
The company announced a new Netflix original series based on the bestselling novel, Sacred Games. Shot on location in India, the series will be produced in partnership with Phantom Films and made available to Netflix members worldwide upon completion.
Contracts/Agreements
Year: 2016
Netflix entered into a new multi-year content licensing partnership with The CW Network, a joint venture between CBS Corporation and Warner Bros. Entertainment, in July 2016. The agreement allows Netflix to remain as exclusive subscription television service in the US for previous seasons of scripted series broadcast on The CW Network. The partnership spans all current CW series and future programs produced for the network during the term of the new agreement.
Contracts/Agreements
Year: 2016
The company announced a landmark international licensing agreement with CBS Studios International for the new ‘Star Trek’ television series. Netflix will be the exclusive premiere home of ‘Star Trek’ in 188 countries (excluding the US and Canada). In addition to this, all 727 existing episodes of ‘Star Trek’ television library, including ‘Star Trek: The Original Series,’ ‘Star Trek: The Next Generation,’ ‘Star Trek: Deep Space Nine,’ ‘Star Trek: Voyager’ and ‘Star Trek: Enterprise’ will be available on Netflix worldwide by the end of May 2017.
Contracts/Agreements
Year: 2016
Netflix announced its first global SVOD licensing agreement with 20th Century Fox Television Distribution (FX). This partnership provides the company with exclusive global streaming rights for FX’s hit, American Crime Story.
Corporate Changes/Expansions
Year: 2015
Netflix was made available in Cuba to people with Internet connections and access to international payment methods.
Corporate Changes/Expansions
Year: 2015
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Netflix launched its streaming services in Japan, its first Asian market.
New Products/Services
Year: 2015
Netflix launched its streaming services in Spain, Italy and Portugal.
Plans/Strategy
Year: 2015
Netflix announced plan to expand into South Korea, Singapore, Hong Kong and Taiwan.
Corporate Changes/Expansions
Year: 2015
Netflix launched its service in Australia and New Zealand.
Contracts/Agreements
Year: 2015
Netflix entered into a partnership with SoftBank, one of the leading mobile providers in Japan. According to the partnership, SoftBank will exclusively offer a fully integrated Netflix experience, including billing, upon the launch of Netflix in Japan.
Contracts/Agreements
Year: 2015
Vodafone Spain and the company announced a partnership, according to which Vodafone customers will be able to watch Netflix on their TV through Vodafone TV.
Contracts/Agreements
Year: 2015
The company partnered with Virgin America, the low-fare upscale airline, to provide complimentary in- flight WiFi access that allows new and existing Netflix members to enjoy the entire Netflix catalog of films and award-winning shows.
Plans/Strategy
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Year: 2015
Netflix announced plans to add seven new original series for older kids, expanding its global original line- up for kids of all age groups to more than 35 series. These new series include: LEGO Bionicle, LEGO Friends and DreamWorks Animation's Dawn of the Croods, a prequel to the film The Croods.
Corporate Changes/Expansions
Year: 2015
The company launched DreamWorks Animation's Dawn of the Croods.
Acquisitions/Mergers/Takeovers
Year: 2014
Netflix acquired the exclusive US subscription video on demand rights for CBS drama ZOO from CBS Corporation.
Contracts/Agreements
Year: 2014
The company signed a multi-tiered deal with the comedian Chelsea Handler to create an all-new talk show.
New Products/Services
Year: 2014
Netflix launched its streaming service in Belgium, Luxembourg, France, Germany, Austria and Switzerland. As a result, the company will serve more than 63 million broadband households in these six European countries for one low monthly price. Saban Brands and Netflix introduced an original kids series, Popples, exclusively for all Netflix members worldwide.
Contracts/Agreements
Year: 2014
The company entered into an agreement with Warner Bros. Worldwide Television Distribution, under which Netflix will be the exclusive subscription video on demand home for Gotham in each of the company's territories and in other select territories.
Contracts/Agreements
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Year: 2014
City, Netflix, and shomi announced a partnership to bring Between, a new premium original drama series, for viewers across the world. This series will premiere on City and shomi in Canada, and on Netflix in the rest of the world.
Corporate Changes/Expansions
Year: 2014
Netflix and Rainbow Studios expanded the Winx Club franchise with a spin-off series, Winx Club WOW: World of Winx, available in all Netflix territories including France and Germany. Winx Club WOW will be the latest addition to the Netflix original kids programming slate.
Contracts/Agreements
Year: 2014
Netflix entered into an interconnection agreement with Comcast Corporation, a global media and technology company, to provide Comcast Corporation's broadband customers in the US with a better video experience.
New Products/Services
Year: 2013
The company also created a new design specifically for the big screen. This new design features multiple cinematic images for each title along with a new description and more personalized detail on why Netflix suggests it.
Contracts/Agreements
Year: 2013
Netflix, NBCUniversal Television and New Media Distribution announced a licensing agreement, allowing Netflix members in Canada to instantly watch feature films and previous seasons of some TV shows from NBCUniversal Television and New Media Distribution. The deal includes many titles that will be exclusively available across any subscription video on demand platform in Canada. In the same year, Netflix announced the extension and expansion of its licensing agreement with the Canadian Broadcasting Corporation (CBC). The expanded licensing agreement includes new seasons of currently available CBC TV shows on Netflix, including Republic of Doyle, Heartland, Mr. D, Dragons' Den and other titles.
New Products/Services
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Year: 2013
The company launched its services in the Netherlands. Netflix provided an instant access to a wide variety of TV shows and movies streaming from the company for only E7.99 per month (approximately $10.27 per month) in the Netherlands.
Contracts/Agreements
Year: 2013
Netflix and The Disney/ABC Television Group entered into a new multi-year licensing agreement, according to which Netflix became an exclusive US subscription TV service for five popular Disney junior and Disney XD shows. The company signed a multi-year deal with DreamWorks Animations, under which Netflix will premiere the original DreamWorks Animation shows in all the territories in which it operates.
Contracts/Agreements
Year: 2013
Netflix announced an expanded multi-year licensing agreement with PBS Distribution to offer a wide variety of PBS programming to its members in the US and Canada.
New Products/Services
Year: 2013
The company launched Netflix Families (www.netflix.com/families), a new destination designed to meet family's entertainment needs.
New Products/Services
Year: 2013
The company launched Netflix ISP Speed Index, a new website that provides an easy overview of the performance of internet service providers (ISPs) in several countries where Netflix operates. The company launched its first Facebook application that allows users to opt into sharing viewing history with friends.
Contracts/Agreements
Year: 2013
Netflix entered into an exclusive licensing agreement with Flavor Unit Entertainment, a production company owned by Queen Latifah and Shakim Compere, for the streaming of Flavor Unit Entertainment's
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movies in the US.
Contracts/Agreements
Year: 2013
The company entered into a multi-year licensing agreement with The Weinstein Company, making Netflix the exclusive US subscription TV service for first-run films from TWC beginning in 2016.
New Products/Services
Year: 2013
Netflix introduced Profiles, a new feature that allows its users to create a separate profile for each member of their household.
Contracts/Agreements
Year: 2012
The company entered into a new multi-year licensing agreement with Twentieth Century Fox to make its TV series and films available for Netflix members to watch instantly in Latin America and Brazil.
Corporate Changes/Expansions
Year: 2012
The company's services were made available on Windows Phones for its customers in Latin America, the UK and Ireland.
Corporate Changes/Expansions
Year: 2012
The company launched its services in Sweden, Norway, Denmark and Finland.
New Products/Services
Year: 2012
Netflix announced the availability of Just for Kids on iPad.
Contracts/Agreements
Year: 2012
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Netflix entered into a new multi-year licensing agreement with The Weinstein Company, through which foreign language, documentary and certain other movies from The Weinstein Company were made exclusively available for members in the US to watch instantly.
New Products/Services
Year: 2012
The company launched its streaming services in the UK and Ireland.
Contracts/Agreements
Year: 2012
The company entered into a new multi-year licensing agreement with The Walt Disney Studios to become exclusive US subscription TV service provider for first-run live-action and animated feature films from The Walt Disney Studios.
Contracts/Agreements
Year: 2011
Netflix and Open Road Films entered into a multi-year agreement to provide theatrically distributed movies by Open Road Films exclusively to Netflix for digital streaming in the 'pay TV window,' after their release on DVD. The company announced a multi-year renewal of its licensing agreement with NBCUniversal Domestic Television Distribution, expanding the selection of non-exclusive NBCU film and TV library titles available to watch instantly streaming from Netflix.
New Products/Services
Year: 2011
Netflix launched Just for Kids section for Netflix members in the US on the Wii game console.
Contracts/Agreements
Year: 2011
The company entered into a new multi-year digital licensing agreement with Miramax to bring a broad range of acclaimed Miramax films to Netflix members in the UK and Ireland.
New Products/Services
Year: 2011
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Netflix launched a new interface for Android-powered tablets.
Contracts/Agreements
Year: 2011
Netflix extended its existing licensing agreement with Disney-ABC Television Group. The extension allowed Netflix to continue to stream library episodes from ABC Studios, Disney Channel and ABC Family over the Internet. As part of the deal, the company also added new content to its lineup of Disney-ABC series and TV movies.
New Products/Services
Year: 2011
The company launched a new Netflix app for android smartphones and tablets, enabling Netflix members in Canada and Latin America instantly watch TV episodes and movies streaming from Netflix on their Android-powered phones and tablets.
Corporate Changes/Expansions
Year: 2011
The company started offering its services in Mexico, Central America and the Caribbean, completing its regional launch. Netflix launched its services in 43 countries in Latin America and the Caribbean. The company entered into a new multi-year licensing agreement with DreamWorks Animation to become exclusive subscription TV service for first-run feature films and select TV specials from DreamWorks Animation.
Contracts/Agreements
Year: 2011
The company entered into a multi-year licensing agreement with Paramount Pictures, adding several new movie titles for Canadian Netflix members. Netflix also entered into a multi-year agreement with Miramax, under which its US members can instantly watch motion pictures from the Miramax film library. It marks the first time Miramax titles became available through a digital subscription service.
Contracts/Agreements
Year: 2011
Netflix entered into a new multi-year licensing agreement with Metro-Goldwyn-Mayer Studios (MGM) to provide exclusive subscription streaming service in the UK and Ireland for most first-run feature films from
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MGM. The company entered into a multi-year licensing agreement with Lionsgate UK, a subsidiary of Lions Gate Entertainment Corp, to provide exclusive subscription streaming service in the UK and Ireland for first-run feature films from the studio.
Contracts/Agreements
Year: 2010
Netflix announced new licensing agreements with CBC and FremantleMedia Enterprises and extensions of its agreements with New Video, Maple and Sony to significantly increase the content available to members in Canada.
Corporate Changes/Expansions
Year: 2010
Netflix selected Dolby Digital Plus to deliver 5.1 channel surround sound for its content streamed instantly over the internet. Later, the company announced that members in Canada can watch content streamed from Netflix to the TV via Xbox 360.
New Products/Services
Year: 2010
The company introduced its free Netflix App for iPhone and iPod touch, enabling members to watch a selection of TV episodes and movies streamed to their iPhone or iPod touch instantly.
Contracts/Agreements
Year: 2010
Netflix entered into an agreement with Universal Studios Home Entertainment covering the distribution of Universal new release DVD and Blu-ray titles at Netflix.
Contracts/Agreements
Year: 2010
The company entered into a partnership with Nintendo of America under which Netflix's movie and TV streaming service will be available on Nintendo WII gaming consoles. Subsequently, the company entered into an agreement with Warner Bros. Home Entertainment Group, under which new release titles on DVD and Blu-ray were made available to Netflix members after a 28-day window from the new release street date. Netflix entered into agreements with Funai (which distributes the Philips, Magnavox, Sylvania and Emerson brands in the US), Panasonic, Sanyo, Sharp and Toshiba to introduce Netflix ready devices.
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Contracts/Agreements
Year: 2010
The company signed deals with a number of leading distributors of independent films, including The Criterion Collection, Gravitas Ventures, Kino Lorber, Music Box Films, Oscilloscope Laboratories and Regent. The deals provide Netflix with non-exclusive licensing agreements to instantly stream films from these distributors.
Corporate Changes/Expansions
Year: 2010
The company launched its services in Canada with an offering that enables Canadians to instantly watch unlimited movies and TV episodes streamed from Netflix to their TVs and computers. This move marked the first availability of Netflix services outside the US.
Contracts/Agreements
Year: 2009
Extending its partnerships with various consumer electronics manufacturers to stream Netflix's content through them, the company unveiled new devices partnering with LG and VIZIO. Netflix entered into deals with many content providers like MTV and Nickelodeon to increase the content offered for streaming. The company announced its movie and TV streaming services being available on Sony's PlayStation (PS3).
New Products/Services
Year: 2008
The company, along with Roku, an innovator in digital media streaming technology, introduced 'The Netflix Player' by Roku, priced at $99.99. The Netflix Player is a device that enables Netflix subscribers to instantly stream a growing library of movies and TV episodes from Netflix directly to the TV.
New Products/Services
Year: 2008
Netflix rolled out a media player to stream movies directly on Windows PCs and Intel Macs.
New Products/Services
Year: 2008
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LG Electronics and Netflix introduced the first Blu-ray disc player.
Divestiture
Year: 2008
The company closed Envelope Entertainment, its film financing and acquisition division.
Contracts/Agreements
Year: 2008
Microsoft and Netflix entered into an exclusive partnership to offer consumers the ability to instantly stream movies and TV episodes from Netflix to TV via the Xbox 360 video game and entertainment system. It also partnered with Samsung to instantly stream movies and with TiVo to stream content directly to TV through TiVo digital video recorders.
Contracts/Agreements
Year: 2007
The company entered into an exclusive TV, retail and worldwide distribution agreements through partnerships with Thirteen/WNET New York, Target and Warner Home Video for the multi-platform campaign for the release of 'Tony Bennett: The Music Never Ends'. Further, it also entered into a partnership with LG Electronics to develop a set-top box for consumers to stream movies and other programming from the Internet to high definition TVs (HDTVs).
New Products/Services
Year: 2007
Netflix offered its subscribers the option to instantly watch movies on their personal computers (PCs).
Corporate Changes/Expansions
Year: 2006
The company opened a new customer service division in Hillsboro, Oregon.
New Products/Services
Year: 2006
Netflix introduced a new feature, 'Previews', on its website that enables its members to instantly watch
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movie trailers personalized for them based on their movie tastes.
Stake Sale
Year: 2006
The company sold 3.5 million shares of common stock pursuant to an effective registration statement at a public offering price of $30 per share.
Contracts/Agreements
Year: 2005
The company entered into an agreement with Wal-Mart, under which Wal-Mart.com's movie sales and Netflix's DVD rentals participated in joint promotional activities.
New Products/Services
Year: 2005
Netflix introduced Profiles, a family-friendly feature which allows Netflix members to create separate movie queues for individual family members using a single account.
Corporate Changes/Expansions
Year: 2004
Netflix opened new shipping centers including those in Las Vegas, Louisville, Kansas City and Lakeland (Florida).
Contracts/Agreements
Year: 2004
Netflix and TiVo signed an agreement to develop a joint entertainment offering, under which the two companies would develop technology and work with Hollywood studios to secure content for digital distribution.
Corporate Changes/Expansions
Year: 2003
Netflix opened two shipping centers to serve the greater Greensboro and Rochester areas.
Corporate Changes/Expansions
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Year: 2002
The company opened two distribution centers, one each in Dallas, Texas and Stamford, Connecticut.
Corporate Changes/Expansions
Year: 1999
Netflix secured a $30 million investment from Group Arnault, an internationally known luxury products group and also launched its subscription service. .
Corporate Changes/Expansions
Year: 1998
Netflix opened the world's first internet store to offer DVD rentals.
Contracts/Agreements
Year: 1998
Netflix and Amazon.com entered into a marketing relationship under which the company would direct its customers to Amazon.com for DVD purchases and Amazon.com would offer its customers special promotions for DVD rentals at Netflix.
Corporate Changes/Expansions
Year: 1998
The company's inventory of DVD movies available for rental surpassed the 2,000 titles mark, making Netflix, the world's largest DVD rental store.
Incorporation/Establishment
Year: 1997
Reed Hastings founded Netflix.
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Key Employees
KEY EMPLOYEES
Name Job Title Board Jackie Lee-Joe Chief Marketing Officer Senior Management Rachel Whetstone Chief Communications Officer Senior Management Spencer Neumann Chief Financial Officer Senior Management Reed Hastings Chief Executive Officer, Director, President Executive Board Mathias Dopfner Director Non Executive Board Ben Kelly Manager - Nonfiction Series Senior Management Josh Simon Vice President-Consumer Products Senior Management Ted Sarandos Chief Content Officer Senior Management Greg Peters Chief Product Officer Senior Management Jessica Neal Chief Talent Officer Senior Management Jay C. Hoag Director Non Executive Board Richard N. Barton Director Non Executive Board Timothy M. Haley Director Non Executive Board Leslie Kilgore Director Non Executive Board Ann Mather Director Non Executive Board Bradford L. Smith Director Non Executive Board Anne M. Sweeney Director Non Executive Board Rodolphe Belmer Director Non Executive Board Susan Rice Director Non Executive Board David Hyman General Counsel, Secretary Senior Management Melissa Cobb Vice President-Kids and Family Senior Management
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Key Employee Biographies
KEY EMPLOYEE BIOGRAPHIES
Jackie Lee-Joe
Board:Senior Management Job Title:Chief Marketing Officer Since:2019
Ms. Lee-Joe serves as the Chief Marketing Officer of Netflix since September 2019. Previously, she served as Chief Marketing Officer at BBC Studios. Prior to BBC Studios, she served at Skype as a Global Director for Audience, Entertainment Marketing and Broadcast Media.
Rachel Whetstone
Board:Senior Management Job Title:Chief Communications Officer Since:2018 Age:51
Ms. Rachel Whetstone has been the Chief Communications Officer of the company since August 2018. Prior to this, she served as Vice President of Communications at Facebook Inc. Previously, she served as Senior Vice President of Communications and Public Policy at Uber from 2015 to 2017. Prior to this, Rachel served as Senior Vice President of Communications and Public Policy at Google from 2010 to 2015. She joined Google in 2005.
Spencer Neumann
Board:Senior Management Job Title:Chief Financial Officer Since:2019 Age:49
Mr. Spencer Neumann has been the Chief Financial Officer of Netflix since 2019. Prior to joining Netflix, he served as the Chief Financial Officer of Activision Blizzard. Earlier, he served as the Chief Financial Officer and Executive Vice President of Global Guest Experience of Walt Disney Parks and Resorts from 2012 to 2017.
Reed Hastings
Board:Executive Board Job Title:Chief Executive Officer, Director, President Age:58
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Mr. Reed Hastings is the Chief Executive Officer, President and a Director of the company. He founded Pure Software in 1991. Mr. Hastings served on the California State Board of Education from 2000 to 2004 and as a Director of Microsoft from 2007 to 2012. He currently serves as a Director at CCSA, Dreambox Learning, KIPP, and Pahara. Mr. Hastings is also a Board member at Facebook.
Ted Sarandos
Board:Senior Management Job Title:Chief Content Officer Age:54
Mr. Ted Sarandos serves as the Chief Content Officer of the company. Before joining the company, he served as an executive at video distributor ETD and Video City / West Coast Video.
Greg Peters
Board:Senior Management Job Title:Chief Product Officer Since:2017 Age:48
Mr. Greg Peters has been the Chief Product Officer of the company since 2017. Prior to this, he served as the International Development Officer of the company. He previously served as the Chief Streaming and Partnerships Officer of the company. Prior to joining Netflix, Mr. Peters served as the Senior Vice President of Consumer Electronics Products at Macrovision Solutions (later renamed to Rovi Corporation). He also held various positions at Mediabolic, Red Hat Network and Wine.com in the past.
Jessica Neal
Board:Senior Management Job Title:Chief Talent Officer Since:2018 Age:42
Ms. Jessica Neal serves as the Chief Talent Officer of the company. Earlier, she served as the head of human resources at Coursera and as the Chief People Officer of Scopely. She also serves as a Director of the Association for Talent Development.
Netflix Inc. Major Products & Services
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Major Products & Services
MAJOR PRODUCTS & SERVICES
Netflix is an online subscription service streaming TV shows and movies. The company's key services include the following:
Services:
Rental of DVDs Instant streaming of movies and TV content through internet to TVs, mobile devices and other internet- connected devices
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SWOT Analysis
SWOT ANALYSIS
Netflix Inc. (Netflix) is an online subscription service streaming TV shows and movies. Business model, strong revenue growth, effective marketing and improving customer experience gives it a competitive advantage as against the traditional outlets, whereas increasing debt remains an area of concern for the company. In future, intense competition and technological changes could affect the company’s profitability. However, strategic initiatives and media and entertainment market in the US by the company are likely to provide growth opportunities to Netflix.
Strength
Effective marketing and improving customer experience Strong revenue growth Strong business model
Weakness
Increasing debt
Opportunity
Strategic initiatives Media and entertainment market in the US
Threat
Changes in US postal rates Intense competition Technological changes
Strength
Effective marketing and improving customer experience
Netflix promotes services through various marketing programs which include digital and TV advertising. The company also provides a free-trial period as a promotional offer to attract new customers. Free-trial membership is offered only to new and certain rejoining members. In addition, Netflix continues to improve its customer experience by expanding its streaming content, improving user interfaces, as well as expanding its streaming service to more Internet-connected devices. These efforts enable the company to drive additional subscriber growth. As of December 31, 2018, the company’s net global streaming membership additions reached 28.6 million as compared to 21.5 million a year ago; and global paid streaming memberships reached 139.3 million in FY2018 as compared to 110.6 million in previous fiscal. Subscriber growth leads to word-of-mouth promotion for Netflix's services, which, in turn, leads to more new subscribers. The increase in total number of subscribers, as well as net subscriber additions leads to increased revenues for the company.
Strong revenue growth
Strong revenue growth increases the company’s ability to allocate adequate funds for its future growth prospect. The company exhibited a strong revenue performance during the review year. In FY2018, Netflix reported revenue of US$15,794.3 million as compared to US$11,692.7 million in FY2018, that
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indicates annual growth of 35.1%. The growth in revenue was primarily driven by increase in the Domestic streaming and International streaming segments by 24% and 53%, respectively. It was driven by the growth in the average number of global streaming paid memberships and average monthly revenue per paying streaming membership that was due to a shift in the plan mix and price changes towards higher priced plans.
Strong business model
Netflix is an internet television networks with over 139 million streaming members in more than 190 countries. The company operates an internet-based subscription model which has done away with many disadvantages experienced in traditional outlets. The number of customers opting for Netflix over the traditional model is on the rise as it offers greater convenience. Netflix also enjoys additional competitive advantages. The company provides a number of DVD titles which is not possible for outlets as they cannot stock such a large number of DVDs. Outlets devote larger space for newer releases and alternatively Netflix can offer old and new titles simultaneously without incurring additional costs. Technology enables customers to sort through the titles easily which is almost impossible to do so in the traditional model. With Netflix, customers pay a fixed monthly subscription fee and stream unlimited content throughout the month unlike the pay-per-view fees. In addition, the company's merchandising practices coupled with its recommendation services enable it to predict and recommend in advance, titles that appeal to individual preferences. Netflix's instant streaming service over the internet is witnessing escalating growth. There are various devices worldwide that can stream content from Netflix instantly. These include the smart TVs, streaming media players, gaming consoles, set-top boxes, Blu-ray disc players, smart phones and personal computers and laptops. Netflix's business model provides customers with the most convenient way to view DVDs as they are delivered to their addresses and the subscribers can return them through pre-paid postage envelopes. The business model that Netflix operates gives it a competitive advantage.
Weakness
Increasing debt
Increasing debt could have a major impact on the operational performance of the company, as major portion of its earnings would be diverted to servicing its debt obligations. This could concern the investors as well and make it difficult for the company to raise funds on favorable terms of market. The company’s total debt as of FY2018 was US$10,388.1 million, as compared to US$6,528.9 million in FY2017. If it fails to comply with any of the debt service requirements, the debt could become due and payable prior to its scheduled maturity. Such huge debt increases the debt servicing obligations of the company and affects its cash flow. It could limit ability to raise debt in future and pursue other strategic opportunities. It would also increase the company’s vulnerability to adverse economic and industry conditions.
Opportunity
Strategic initiatives
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The company focuses on strengthening its business through various strategic initiatives. In September 2019, the company entered into a partnership agreement with Canal Plus Group to distribute Netflix on Canal Plus's platform. This partnership increases the subscribers for Canal Plus’s Cine Series package access to the Netflix service and premium channel under one subscription. In February 2019, Netflix announced its plans to open a production hub in Toronto. This initiative enables the company to expand its business presence in Canada. In the same month, Netflix announced the launch of Mexico City office that enables to expand its presence in Mexico. The company plans to start over 50 new projects in Mexico that include co-productions and original content. In January 2019, Netflix entered into a partnership agreement with Hilton to offer Hilton guests to stream the Netflix series, and movies on in- room televisions in Hilton’s Connected Rooms.
Media and entertainment market in the US
The company could benefit from positive outlook for the media and entertainment industry in the US. According to in-house research, the US media market is expected to grow at a CAGR of 1% during 2017- 22 to reach US$330 billion by 2022, from US$313.8 billion in 2017. In terms of category, the broadcasting and cable TV accounted for 58% of the total value of the US media market, followed by publishing with 20.3%, advertising with 13.4%, and movies and entertainment with 8.2% in 2017 respectively. Netflix is an online television network streaming TV shows and movies that offers DVDs and Blu-ray titles to subscribers. The company’s subscribers can watch unlimited TV shows and movies streamed over the internet to their computers, TVs, and mobile devices. Netflix operates internet television network with over 139 million paid streaming memberships across 190 countries. Its entertainment services include documentaries, feature films, movies and TV series through the internet. In January 2019, the company entered into a partnership agreement with Hilton to offer Hilton guests to stream the Netflix series, and movies on in-room televisions in Hilton’s Connected Rooms.
Threat
Changes in US postal rates
Constantly increasing postage delivery charges in the US could increase shipping costs for Netflix as it delivers DVDs directly to its members' addresses by mail with a postage-paid return envelope. The US Postal Service has increased the postage charges in recent times. The rate for first class postage stamp was increased from 44 cents in May 2009 to 45 cents in January 2012 and then to 46 cents in January 2013. In January 2014, rate for first class postage stamp increased to 49 cents. Though this rate decreased to 47 cents in April 2016, the US Postal Service implemented a postage rate increase in August 2016. This price increase affected first-class mail parcels weighing 1-3 ounces. The first-class mail parcel (weighing one ounce)-retail/post office rate increased to 49 cents in January 2017 from 47 cents in 2016 postage rates. Increases in postage delivery rates, including those resulting from changes to policies on the requirements of first class mail such as size, weight or machinability, could adversely affect the company’s domestic DVD segment's contribution profit. If the US Postal Service implements other changes to improve its financial position, such as closing mail processing facilities or service reductions, could lead to a decrease in customer satisfaction and Netflix’s domestic DVD segment's contribution profit could be adversely affected.
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Intense competition
The company operates in an industry that is intensely competitive and subject to rapid change. Netflix faces competition from other entertainment video providers, including multichannel video programming distributors, internet-based content providers (including those that provide pirated content), video gaming providers and DVD retailers. It competes against other sources of entertainment that its members could choose in their moments of free time. It also competes against entertainment video providers and content producers in obtaining content for its service, both for licensed streaming content and for original content projects. The major competitors of the company include Comcast Corp, Amazon.com Inc, Discovery Inc, DISH Network Corp and Verizon Communications Inc. Such intense competition could result in competitive pricing and in turn pressurize the margins of the company.
Technological changes
Netflix operates in a highly competitive, video services industry. The company's offerings are characterized by rapid technological changes, which may affect its business operations. The technology changes in video services include online services and devices that offer Internet video streaming and downloading of movies, television shows and other video programming. To compete effectively with its peers, the company should continually introduce new products that meet and exceed the customers’ requirements. The introduction of products using new technologies or the adoption of new industry standards could make existing products, or products under development, obsolete or unmarketable. Current and new wireless internet technologies such as 4G and 5G wireless broadband services continue to evolve rapidly to allow greater speed and reliability. The company requires investing in such new technologies to meet its customers’ requirements and retain its market share.
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Top Competitors
TOP COMPETITORS
The following companies are the major competitors of Netflix Inc.
Amazon.com, Inc. Comcast Corporation Discovery Inc DISH Network Corp Verizon Communications Inc.
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Company View
COMPANY VIEW
An excerpt from the 'Management's Discussion and Analysis of Financial Condition and Results of Operations' section is given below. The excerpt has been taken from Netflix's 10-K filing for FY2018.
Results of Operations
Consolidated revenues for the year ended December 31, 2018 increased 35%, including an increase of 24% and 53% in revenues in the Domestic streaming and International streaming segments, respectively, as compared to the year ended December 31, 2017. International revenues accounted for 50% of total streaming revenue for the year ended December 31, 2018 as compared to 45% of total streaming revenues for the year ended December 31, 2017. The increase in consolidated revenues was primarily driven by the growth in the average number of streaming paid memberships globally, the majority of which was growth in our international memberships. Average paid international streaming memberships accounted for 55% of total average streaming paid memberships as of December 31, 2018, as compared to 49% of total average streaming paid memberships as of December 31, 2017. In addition, average monthly revenue per paying streaming membership increased primarily due to price changes and a shift in the plan mix towards higher priced plans. The growth in paid net membership additions has been less volatile when compared to growth in total net membership additions as a result of free trial variability. We therefore believe paid memberships is a more reliable indicator of revenue growth.
The increase in operating margin is due primarily to increased revenues, partially offset by increased content expenses as we continue to acquire, license and produce content, including more Netflix originals, as well as increased marketing expenses and headcount costs to support continued improvements in our streaming service, our international expansion, and our growing content production activities.
We offer three main types of streaming membership plans. Our basic plan includes access to standard definition quality streaming on a single screen at a time. Our "standard" plan is our most popular streaming plan and includes access to high definition quality streaming on two screens concurrently. Our premium plan includes access to high definition and ultra-high definition quality content on four screens concurrently. As of December 31, 2018, pricing on our plans ranged in the U.S. from $7.99 to $13.99 per month and internationally from the U.S. dollar equivalent of approximately $3 to $20 per month. We expect that from time to time the prices of our membership plans in each country may increase and we may occasionally test other plan and price variations.
The following represents the key elements to our segment results of operations:
We define contribution profit (loss) as revenues less cost of revenues and marketing expenses incurred by the segment. This represents each segment's performance before global corporate costs. As markets within our International streaming segment become profitable, we increasingly focus on our global operating profit margin target as a measure of profitability.
For the Domestic and International streaming segments, amortization of the streaming content assets makes up the majority of cost of revenues. Increasingly, we obtain multi-territory or global rights for our
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streaming content and allocate these rights between Domestic and International streaming segments based on estimated fair market value.
Expenses associated with the acquisition, licensing and production of streaming content (such as payroll and related personnel expenses, costs associated with obtaining rights to music included in our content, overall deals with talent, miscellaneous production related costs and participations and residuals), streaming delivery costs and other operations costs, make up the remainder of cost of revenues. We have built our own global content delivery network ("Open Connect") to help us efficiently stream a high volume of content to our members over the internet. Streaming delivery expenses, therefore, include equipment costs related to Open Connect, payroll and related personnel expenses and all third-party costs, such as cloud computing costs, associated with delivering streaming content over the internet. Other operations costs include customer service and payment processing fees, including those we pay to our integrated payment partners, as well as other costs incurred in making our content available to members.
For the Domestic and International streaming segments, marketing expenses consist primarily of advertising expenses and certain payments made to our marketing partners, including consumer electronics manufacturers, MVPDs, mobile operators and ISPs. Advertising expenses include promotional activities such as digital and television advertising. Marketing expenses also include payroll and related expenses for personnel that support the Company's marketing activities. Marketing expenses are incurred by our Domestic and International streaming segments in order to build consumer awareness of the streaming offerings, and in particular our original content.
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Locations And Subsidiaries
LOCATIONS AND SUBSIDIARIES
Head Office
Netflix Inc. 100 Winchester Circle Los Gatos California Los Gatos California USA Phone:1 408 5403700 www.netflix.com
Other Locations and Subsidiaries
Netflix Entretenimento Brasil Ltda. BRA
Netflix Global LLC USA
Netflix International B.V. Keizersgracht 440 1016 GD Amsterdam NLD
Netflix Studios, LLC USA
A Progressive Digital Media business
John Carpenter House, John Carpenter Street, London, United Kingdom, EC4Y 0AN T: +44 (0) 203 377 3042 | F: +44 (0) 870 134 4371 | E: [email protected] | W: www.marketline.com
- Company Overview
- Key Facts
- Business Description
- History
- Key Employees
- Key Employee Biographies
- Major Products & Services
- SWOT Analysis
- Top Competitors
- Company View
- Locations And Subsidiaries
