Netflix, strategy analysis, strategic segmentation, VOD sector, DVD rental, streaming, PESTEL analysis, Amazon, Porter's five forces
Netflix, an American company, founded in 1997 by Reed Hastings, is the first company to offer DVD rental by mail from an order placed over the Internet. This desire to offer unlimited access to cultural content without having to travel is the result of a strategy of sophistication of the "DVD" product. In fact, the customer subscribes to a monthly subscription which allows him to order one or more films on the Netflix website, which he then receives by mail. This system allows the product to be kept for as long as desired, without late fees, and the return of DVDs in a prepaid envelope.
[...] We are also witnessing a technological convergence towards a single “multimedia support” (smartphones, touchpads, etc.). Legal influence The tightening of copyright regulations led to the creation of an International Anti-Piracy Treaty (ACTA). It allows signatory states to identify counterfeiters more easily and to tighten sanctions. B + 1 Porter's forces Competitive intensity There is no competition in paid streaming VOD, as Netflix benefits from its pioneer status. Threat of potential entrants Potential entrants can be international or local. New competitors may compete with Netflix in the future. [...]
[...] External analysis of the streaming VOD sector A. The PESTEL model Political influence The state can influence access to broadband connection by building infrastructure. Economic influence Strong price/demand flexibility. Sociological influence The increase in the number of Internet users can boost the streaming activity. At the same time, more and more consumers are integrating it into their mode of consumption. With the democratisation of tools and services available on the Internet, consumers want to access films instantly, quickly and without having to travel. [...]
[...] Analysis of the strategy of the American company Netflix Netflix, an American company, founded in 1997 by Reed Hastings, is the first company to offer DVD rental by mail from an order placed over the Internet. This desire to offer unlimited access to cultural content without having to travel is the result of a strategy of sophistication of the "DVD" product. In fact, the customer subscribes to a monthly subscription which allows him to order one or more films on the Netflix website, which he then receives by mail. [...]
[...] D. Develop a new DAS The company could consider a new DAS which would consist of audiovisual sales by offering a download service allowing them to always have access to certain films, even without an internet connection during viewing. Sources • www.netflix.com/ • Streaming captures one third of traffic in Europe, and 50% in the USA, Nil Sanyas, May pcinpact.com, http://www.pcinpact.com/news/63619- streaming-youtube-netflix-europe-usa.htm • Netflix announces two international launches. France for 2012? [...]
[...] To win the loyalty of customers We've seen another major problem with Netflix is its high termination rate. Netflix must therefore implement measures to retain its customers. Having exclusives on certain films or series could avoid a transfer of customers to new entrants. In addition, it could consider a loyalty system which would consist of setting up decreasing prices according to the number of films viewed. Another avenue would be to diversify its content by offering the same subscription that would allow access not only to VOD but also to a music download system. [...]
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