Netflix Pestel analysis, Reed Hastings, DVD rental market, Marc Randolph, Amazon Prime, OCS, Canal plus
Netflix is an American entertainment company that has grown into a major Internet TV provider. As of 2017, the company has a large customer base of over 100 million subscribers in over 190 countries, with over 51 million subscribers located in the United States.
The company was founded by Reed Hastings and Marc Randolph in 1997. The corporate headquarters are located in Los Gatos, California. In 2016, Netflix bought around 126 original movies and added them to its catalogue, which is more than any other cable provider ever achieved in the world. In 2016, Netflix's business revenue was approximately 2.7 billion dollars.
[...] Netflix should also consider the following economic factors as part of the PESTEL analysis: - The type of economic system in the countries where the company operates - what type of economic system is in place and how stable it is? - Government intervention in the free market and related services. - The exchange rate and the stability of the host country's currency. - The efficiency of financial markets - Does Netflix need to raise capital on the local market? - The quality of the infrastructure in the on-demand cable television industry. - The comparative advantages of the host country and of the service sector in the country considered. - The skill level of the workforce in the industry. [...]
[...] The price of home streaming, marketing expenses and other costs have also increased and have to be checked in the future. As cash outflows continue to increase means that less cash flow is available for the business. Netflix currently has over 100 million subscribers who access their service globally. A key factor contributing to this is the competitive price compared to traditional television services. In today's global recession where many customers are spending on tight budgets, services like Netflix are more appealing than expensive traditional media subscriptions. This is Netflix's main competitive advantage. [...]
[...] - Legal framework for the execution of contracts. - Protection of intellectual property. - Trade regulations and tariffs relating to services. - Favoured business partners. - Antitrust laws relating to cable television systems. - Price regulation and associated mechanisms for regulating prices for services. - Tax policy, tax rates and other tax incentives. - Wage legislation and labour codes, as well as minimum wages and regulation of overtime. - Regulations linked to the working week in cable television systems. - Compulsory social benefits. [...]
[...] Some of the legal factors Netflix must take into account when entering a new market are: - Antitrust law in the cable television industry across countries - Discrimination laws - Copyright, patents and intellectual property laws - Consumer protection and electronic commerce regulations - Employment laws - Health and safety laws - Data protection regulations (personal data, browsing, etc.) Video piracy is the cause of huge loss for the streaming television and film industry, so the penalties for violators should be more severe. For more than 30 content providers (including Netflix), piracy represented around 5.4 billion downloads of multimedia content in 2016 alone. Streaming on multiple devices should be verified, as users can share their credentials to reduce the bills related to their subscription. In early 2016, Netflix announced that it would increase subscription prices, but it was not clear how current users would be affected. As a result, Netflix received a class action lawsuit from angry customers. [...]
[...] Even within a country, individual states can often have different environmental laws and liability laws. For example, the United States, Texas and Florida have different liability clauses in the event of an accident or environmental disaster. Likewise, many European countries give tax breaks to companies that operate in the renewable energy sector. Before entering new markets or starting a new activity in the existing market, the company should carefully assess the environmental standards required to operate in those markets. Some of the environmental factors that Netflix needs to consider in advance are: - Climate change - Laws regulating environmental pollution - Regulations on air and water pollution in the television industry, specifically cable and VOD - Recycling issues - Waste management in the service sector - Attitudes towards "green" or ecological products - Endangered species - Attitudes and support towards renewable energies For streaming services like Netflix, accessing data servers puts an enormous strain on the environment. [...]
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