Sanders MKT 3301 Unit 6 ESY

4

Netflix

JaKeria Sanders

Columbia Southern

Professor Framan

05/10/2022

Netflix

Netflix is an example of a business-to-consumer company that has revolutionized the Television industry. Its ability to incorporate cutting-edge technology and embrace the internet as a medium for offering streaming services has caused cable television network to reconfigure their business model. Netflix is an American company with global reach and has been in existence for around 24 years (Netflix, n.d.). Initially, the company's main focus was on selling and renting DVDs but quickly transitioned from selling to renting DVDs only. At this point, Netflix was offering its services locally. But since the introduction of the video-on-demand and streaming media in 2007, Netflix has tremendously expanded into a global company, with its services now being accessed in almost every part of the world. As of the 2021 survey, Netflix had around 12 135 employees and more than 167 million subscribers across the globe, making it the leading company in the on-demand media industry.

Netflix is an internet-based platform, meaning users need an internet-connected device to access all the available content. With an IOS, Android, and Windows device and subscription of your choice, you are able to access the services offered on this streaming platform. Also, it gives the option of downloading the content to the device for later use. It allows users to stream on-demand movies and television shows seamlessly in the comfort of their homes. However, due to its subscription-based model, users are able to access the quality of the content based on their subscription (Bhasin, 2021). The subscription plans are categorized into three segments that are premium, standard and basic plans. In the basic plan, contents are available in standard definition, whereas, in the standard plan, the users can access content in high definition. By subscribing to a premium plan, consumers are able to stream video content in ultra-high definition. The pricing strategy of each of the three subscription plans varies from country to country. The subscription plans and pricing strategies ensure they have attracted consumers from different demography such as teenagers, young adults, and low-middle income families.

Besides availing movies and TV series to its subscribers, Netflix is also involved in the following activities. They engage in licensing, producing, and acquiring authentic content to be able to keep expanding their video library (Bhasin, 2021). They also create a roadmap to test and move into new markets and improve subscribers' recommendations for retaining the already existing users. Furthermore, they partner with local economies and communities to help develop local content. And also negotiating deals and securing the essential partnership with production houses and studios to increase its value and optimize revenue streams.

Apart from targeting users who love watching TV shows, documentaries, and movies, Netflix has three distinct business segments acting as revenue streams. The first segment is the domestic streaming segment. In this segment, revenue is collected through monthly subscription fees from members residing solely in the United States (Forbes, 2022). The second segment is the international streaming segment, which derives revenue from monthly membership fees to members living outside the USA. At the same time, the third segment is the Domestic DVD which represents Netflix's oldest form of revenue. Revenue in this segment is collected monthly fees from rental DVDs distributed through e-mail. On top of all this, Netflix has successfully separated television shows, documentaries, and movies for adults and kids, creating a family-friendly environment.

References

Bhasin, H. (2021). Business Model of Netflix - How Does Netflix Make Money? Marketing91. Retrieved 29 April 2022, from https://www.marketing91.com/business-model-of-netflix/#:~:text=The%20business%20model%20of%20Netflix,on%20the%20Netflix%20streaming%20platform.

Forbes. (2022). Netflix (NFLX). Forbes. Retrieved 29 April 2022, from https://www.forbes.com/companies/netflix/?sh=fcf070a8541f.

Netflix. What is Netflix? Help Center. Retrieved 29 April 2022, from https://help.netflix.com/en/node/412.