A Case Study of Netflix – their rise, innovations and evolution of business model canvas

A case study on the rise of Netflix, founding by Marc Randolph and Reed Hastings, anecdotal story of origins, success in the early years to their coming of age, competition with Blockbuster, adoption of pay per subscription models and various innovations in technology including algorithmic recommendation of content, venture into original content, pop culture resonance and how they have disrupted the content and media business overall.

1. Netflix Business Model Case Study Exploring the strategies and success story of Netflix

2. Agenda The Story of Netflix Act 1: The Early Years Act 2: Coming of Age Act 3: Blockbuster Battle Act 4: Final act Netflix Business Model Canvas Photo by Pexels

3. The Story of Netflix Founded in 1997, by Marc Randolph and Reed Hastings, in California. Anecdotal story: They rented a Blockbuster DVD and had to pay a late fee for the rental Launched in April 1998 as one of the world’s first online DVD rental companies , with a small and under 1,000 titles. Photo by Pexels

4. Act 1: Early years Send physical copies of films, shows, video games, and other media through mail, in a pay-for-use model . Then changed to a subscription model, pay a flat monthly fee for unlimited access to movies Competition: Blockbuster (biggest movie and film rental at the time) Cable channels like HBO Photo by Pexels

5. Act 2: Coming of age Video streaming launched in 2007, with only 1,000 titles Only worked on PCs and Internet Explorer A limit of 18 hours of free streaming a month, 7.5 million registered subscribers by end of 2007. Competition: DVD rentals like Blockbuster but also new streaming services that would be launched such as Amazon Prime Video, Apple TV+, and HBO Max Photo by Pexels

6. Blockbuster launched Total Access, allowing DVD returns Mimicked Netflix’s website and distribution centers Dirty tricks, spies to get intel on how Netflix was operating …. Netflix realized this was a threat But they still had one advantage… Netflix algorithm Act 3: Blockbuster Battle Photo by Pexels

7. The trend of “ binge-watching ” Transforming its business model also transformed the way people consume video entertainment. By 2016, Netflix expanded to other 190 countries, offering programming in 21 languages. Binge watching Photo by Pexels

8. “Netflix and chill” ‘Netflix and chill” becomes a phrase When a brand name becomes an verb …you know something is working The phrase has also taken more ‘undesired’ connotations Photo by Pexels

9. Final act : Grand Finale Venturing into Original content Soon to win Academy Awards for some of its original productions. Competition: Now they’re c ompetition also included movie studios – Warner Brothers, Disney and others Photo by Pexels

10. Value Proposition Convenience : On-demand, 24/7, anywhere, any device Free 30-day trial and cancel anytime Wide range of selection of movies, TV shows and documentaries A ffordable , almost the same cost as a movie ticket Personalized and localized recommendations Ad-free viewing experience (as of 2022) Original content , often exclusive Possibility of binge-watching instead of waiting for episode Photo by Pexels

11. Customer Segments Everyone: As wide a range of customers as it gets Movie enthusiasts, binge-watchers , and anyone who loves movies and TV shows. Also families, individuals and kids Genre-fans : Classics, horror, thriller, action, comedy Personalized for customer interests and preferences through data analytics. Photo by Pexels

12. Customer Relationships Simple, self-service through website or app Personalized customer experiences Social media platforms to connect with its customers and gain feedback Photo by Pexels

13. Channels Online streaming and video-on-demand services Mobile apps, smart TVs, and gaming consoles to reach its customers Partnership with cable providers to increase its market share Online marketing : Social media platforms Some offline marketing too Photo by Pexels

14. Revenue Streams Subscription fees through Basic, Standard, and Premium plans. Original content that could also be distributed in theatres to generate more revenue streams. Photo by Pexels

15. Key Partners Content creators, studios, and distributors to acquire licenses for their content. Smart TV and mobile device manufacturers Consumer electronic producers such as Wii, X-Box, PlayStation, which bundle Netflix with their systems Amazon AWS, since the Netflix platform is totally hosted on AWS Internet service providers to enable a seamless viewing experience. Payment gateway providers to ensure a smooth payment process. Photo by Pexels

16. Key Activities Maintaining and develop technology to improve user experience Data analytics to optimize content recommendations Growth and retention of customer base Marketing and branding to make Netflix a household name Content licensing and acquisition, negotiating with studios, content producers, production houses Original content production Pricing strategy and strategizing new revenue streams Working with regulators regarding censorship and laws Photo by Pexels

17. Key Resources Website and cross-platform app Massive cloud -based infrastructure. Algorithms and data for personalization Talent : Data Scientists, Software developers Work culture and employee welfare Financial resources to invest in original content production and acquisition Photo by Pexels

18. Cost Structure Tech infrastructure and cloud-based storage Marketing , customer service, and talent acquisition costs Content acquisition and production costs General admin costs Photo by Pexels

19. Final thoughts (and laments) Photo by Pexels Netflix has revolutionized entertainment consumption Made it more convenient to relax and enjoy content Made it easier for people to find entertainment that matches their interests But also…

20. Is it killing the shared “theatre-going” experience? Photo by Pexels

21. Could it be reducing the chances of “auteur” films? Photo by Pexels