Halle Dato

November 18, 2020

Netflix
Situational Analysis

Brief History

➔ Netflix began as a video rental company in August 1997. Netflix was founded by Reed

Hastings and Marc Randolf in Scotts Valley, California.

◆ The company relocated and is now headquartered in Los, Gatos, California with

an additional 18 offices across 14 countries.

◆ In 2009, Netflix was available to stream via Playstation, smart TVs and other

devices that can connect to the internet. One year later, the streaming company

was available to download onto Apple products.

◆ Netflix started producing original content in 2013 which now includes

award-winning movies, TV series, comedy specials and documentaries.

◆ In 2016, Netflix expanded to a total of 190 countries and offers programming in

over 20 languages. One year later, Netflix reached 100 million subscribers

globally.

SWOT
➔ Strengths: Netflix has a great social media presence. The streaming platform has a large

presence on multiple social media platforms, their most well-known platforms are on

Instagram and Twitter. Netflix has even made sister accounts to produce specific content

specifically for popular TV shows, movies, even for different countries.

◆ Netflix also has great adaptability; the streaming platform knows what is trending
 in pop culture and knows how to take advantage of it.

◆ Netflix has produced multiple award-winning productions. This was exemplified

during the 77th Golden Globes when Netflix received 34 nominations, including

four films up for best picture and four television series up for the top television

awards.

➔ Weaknesses: Increased price for subscription fees, removing content that features

representation of minorities (lesbian-lead TV shows).

◆ In 2019, Netflix raised prices for U.S. subscribers in its largest price increases

since the streaming service began. U.S. subscribers saw that the cost increased

anywhere from 13 to 18% depending on the plan they have chosen.

◆ Netflix has removed multiple television shows that featured a lesbian as the main

character. The company has stated that they decided to cancel the shows due to

complications with the coronavirus pandemic, yet other Netflix shows are still

managing to be filmed.

➔ Opportunities: To add more shows that other streaming services aren’t picking up, to

continue producing original content, to work more closely with Vernā Myers, the Vice

President of Inclusion Strategy, to ensure that diversity and inclusivity is a priority.

➔ Threats: Various other streaming services such as Hulu, Apple TV, Disney+, Prime

Video, HBO Max, and ESPN+.

◆ Netflix is additionally threatened by content offered only on cable TV.

Competitors

➔ Netflix’s main competitors are other streaming services, such as Hulu, Disney+, HBO

Max, Prime Video, ESPN+, YouTube TV, Sling and Apple TV that offer content at a
 lower price.

◆ In terms of price, Hulu offers the lowest prices ranging between $5.99 and

$11.99 a month compared to Netflix’s monthly prices ranging between $8.99 and

$17.99.

➔ Other competitors include cable television like Cox and Time Warner Cable, cable

television channels such as AMC, FX, HBO, Discovery, and SyFy; and third-party

streaming sites like PartyChrome, Acorn TV, and TVision.

◆ All of these platforms offer shows that Netflix doesn’t provide on its streaming

platform as well as their own original content or provides at a much later date.

Market Share

➔ Netflix currently has 183 million subscribers and their market cap is $163 billion. Netflix

has a presence in 75% of U.S. households that participate in over-the-top (OTT)

streaming services.

Message Themes/Slogan

➔ Netflix’s slogan is, “See what’s next”: The word choice is open and inviting. It adds to

the idea that Netflix is continuously adding new content no matter what the viewer is

interested in.

◆ This slogan is now a part of a worldwide campaign taking place in 27 countries

and will be presented via digital, TV, and billboard advertisements.

◆ Netflix has used the phrase, “Discover new stories”, in the past, but didn’t have an

official slogan until 2015.

Media Channels and Usage

 ➔ One of Netflix’s strengths is the company’s use of social media. Netflix has a prominent

platform on many social media sites, the most popular being Instagram and Twitter.

◆ The company’s main Instagram account, @netflixus, boasts 25.1 million

followers. Some sister accounts include those generated to specific television

series such as ​Stranger Things​ (@strangerthingstv), ​You​ (@younetflix), and ​Julie

and The Phantoms​ (@julieandthephantoms).

● Other sister accounts are for Netflix platforms in different countries like

@netflixuk (United Kingdom and Ireland), @netflixph (Philippines),

@netflixfr (France), and @netflixlat (Latino America).

● Additionally, Netflix has sister accounts that produce specific content for

the different genres of entertainment offered. Netflix’s Instagram account

for their stand-up comedy specials is @netflixisajoke. Netflix also has an

account to advertise it’s original film productions, which can be found

@netflixfilm on Instagram.

◆ The company also has a popular podcasting platform. The podcasts are focused

on popular Netflix actors and filmmakers who talk about their experiences filming

different productions for the streaming company.

◆ Netflix thrives from posting memes on social media platforms such as Twitter and

Instagram from their shows and movies, making them appear self-aware and

relatable to their main audiences.

● The company also creates pages for individual shows and movies for fans

to interact with as well.

Problem Statement
 ➔ Netflix has been creating and distributing original content that has been accused of being

too immature or is poorly produced, according to articles written by Vice and Forbes. It

occurs often that a scene in a Netflix movie or TV show seems insensitive or crudely

done. Additionally, Netflix has been making content geared for specifically aged

audiences, most often occurring with teens and young adults, but the actual content of the

series or film is much more immature than what audiences expected.

◆ Additionally, Netflix has a history of incorrectly advertising content, most

recently seen for the film, ​Cuties. ​The BBC released a statement from Netflix

apologizing for the crude use of promoting this film.

Demographics

➔ While Netflix is marketed/has content for all ages, the most popular age grouping falls

between ages 18-34, male and female, according to BusinessofApps.com. The next most

popular age group are teenagers aged 13-18 and children that are 12 years old and

younger.

◆ Gender, income level, and amount of education are not indicative factors of those

consuming Netflix’s content.

Psychographics

➔ Netflix’s goal is to remain as one of the top streaming services in the world. They also

hope to connect with even more households by offering new, original content. They

continue to do this by adding new shows or movies for each age group every few months

or so.

◆ Netflix values curiosity, judgement and courage, actively looking for those
 qualities for those who wish to work there.

◆ Their main target audience is ages 11-48 and are currently generating the most

content towards that age group.

Internal/External

➔ Netflix is available in 195 countries. The streaming service is offered in North and South

America, Europe, Asia, and Africa. Additionally, Netflix makes multiple languages

available when viewing television series and films and is also in the process of making

area-specific content for each of the regions it is available in.

Special

➔ There are many actors involved in Netflix’s television series and film franchises that now

have prominent platforms.

◆ Actors such as Finn Wolfhard, Joey King, Lana Condor, Noah Centineo, and Joe

Keery, have all found prominent positions starring in lead roles within the

streaming company’s content.

Goals:

1. To maintain position as one of the top streaming services in the world.

2. To continue producing award-winning content.

3. To create accessible markets for filmmakers.

Objectives:

➔ To target a 16% operating margin in 2020 and to steadily increase profiting and margin

from there.
 ➔ To create and make more content available for Indian audiences and to attract 100 million

Indian viewers in 2020.

➔ To continue offering an amazing entertainment experience for viewers.

Strategies:

➔ To collaborate with Indian creators for original content

➔ Advertising the company across the world built around the tagline, “One Story Away”, in

27 countries.

➔ To make more of the U.S. based content available to more countries.

Media Approaches:

➔ Media Cloverleaf: Netflix definitely utilizes the social media aspect of the Media

Cloverleaf. Through the strong presence on social media platforms like Instagram and

Twitter, as well as other prominent platforms on various forms of media, Netflix knows

how to best reach its target audiences.

➔ Paid: Netflix doesn’t use advertisements on its streaming platform, making it one of the

few to do so. By doing this, Netflix creates themselves as a company that can offer more

convenience for viewers.

➔ Earned: Publicity at Netflix thinks a lot about impact: specifically how the company can

create enjoyable content for a variety of audiences. This includes advertising, the “One

Story Away” model, and keeping an active presence on social media platforms. Netflix’s

2020 campaign is “One Story Away”, a worldwide marketing scheme. Netflix is

available in over 190 countries and plans to stay at the top of streaming services.
 ➔ Shared: Netflix dominates the “Shared” aspect of the PESO model. Netflix has an active

social media presence, mainly on Instagram and Twitter, even creating sister accounts

that generate content for specific shows, movies, specials, even countries. The accounts

have more than 100,000 followers each and are continuing to grow.

➔ Owned: The company reaches out into multiple spectrums. Netflix recently started

producing podcasts where actors and directors talk about their experiences while working

on-set of Netflix original content. Additionally, Netflix has employees post first-hand

experiences of what it’s like to work for the company.

Tactics

Make themselves relatable to target audiences

➔ Netflix accomplishes this in multiple ways. The most common ages for those who use the

streaming service are between the ages of 11 and 48, a wide age range.

➔ Since Netflix has such a prominent presence in the media, the company is able to see

what is currently trending between different age groups and can then adapt to incorporate

that into their posts.

Making more content available in other countries

➔ Since Netflix is available in 190 countries, it’s shocking for some to see that not all of the

programs offered in the United States are available in other countries, like certain series

or specials.
 ➔ The streaming company is currently in the process of generating more original content to

be streamed in other countries to be able to satisfy those consumers.

◆ “Netflix now streams in almost dozens of countries around the world. But due to

licensing agreements with the shows’ production studios, the lineup of what’s

available to watch varies by territory.” - Tom’s Guide

Continue producing diverse and inclusive content

➔ Fans have noticed that Netflix has cancelled shows in the past that include representation

such as people of color or members of the LGBTQIA+ community.

➔ Recently, the streaming company has created a position specifically catered to address

diversity and inclusion:

◆ “But to my surprise, Netflix might actually be ​revolutionizing the industry’s

approach to diversity​, steering away from the archaic ​straight, white, boy’s club

that we’re all quite frankly very bored of. Netflix’s great attitude is reflected in

their development of a position catered specifically to tackle issues surrounding

diversity and inclusion (D&I). The ​well-known advocate​ for D&I, Vernā Myers

was appointed the ​role of vice president for inclusion strategy​ in 2018 to

implement inclusion, equity and cultural diversity into all aspects of Netflix’s

workforce worldwide.” - The Creative Conversation

Samples of Tactics:

➔ Social Media Posts:​ Netflix is famous for their social media presence. The company’s

primary social media platforms are Instagram and Twitter. On both platforms, Netflix and
its related accounts boast hundreds of thousands of followers. Because their posts are

catered to a large audience, millions of people see their social media content.

◆ On Instagram, Netflix uses a simple, yet aesthetically-pleasing approach to their

posts. There, Netflix shares photos and videos from their many television shows,

movies, documentaries, and more. On their main Instagram page, @netflix,

Netflix’s posts combine current pop culture jokes along with stills from their

content, sometimes combining two television shows or movies into one. Netflix

also gives viewers a behind-the-scenes look for their original content.

◆ Netflix also has a prominent presence on Twitter. Netflix has become famous for

their witty comebacks and replies, and Twitter is the best way for the company to

show that off. More than half of Netflix’s tweets are replies. The replies are where

the company can answer questions from fans and further engage in conversations

about their content. Netflix also replies to celebrities who are chatting about
 different shows offered on the streaming platform, widening the audience that is

going to be seeing their content.

➔ Hashtags:​ Netflix is no stranger to using hashtags on social media posts. Netflix most

often uses hashtags on their Instagram and Twitter platforms.

◆ The most popular hashtag that they use is actually just the name of their company,

#netflix, which is most often used to be able to connect all of the content between

Netflix’s multiple accounts (@netflixisajoke, @netflixfilm, @netflixuk, etc.).

 ◆ Another popular hashtag used by Netflix and Netflix users is #NetflixAndChill.

The phrase was first used in a 2009 Twitter post by “NoFaceNina” (La Shanda

Rene Foster). However, the saying became popular in 2014 with the rise of

Netflix’s popularity. By 2015, Urban Dictionary had given the phrase it’s own

definition, describing that the phrase is now code for people going to each others’

houses and participating in some level of sexual acts.

◆ Other hashtags that Netflix uses have to do with specifying what the post is about.

For example, @netflix, the main Instagram account for Netflix, might use the

hashtag, #NetflixOriginal, on a post to signify that the television series or movie

was created by them. Another example is that if @netflix has a post about a

television show or film that was recently made available on the United Kingdom’s

Netflix platform, they can add the hashtag #NetflixUK to the post to further

signify that information.

◆ Netflix also uses hashtags to show their support for current social movements.

#LoveIsLove and #BlackLivesMatter are hashtags that have been used by the

company on multiple occasions. By using these hashtags, Netflix is able to further

broaden the audience that can see their content. Additionally, because Netflix

aligns themselves with these movements, they have the potential to draw even

more viewers or customers into purchasing a subscription to their streaming

service.

➔ News Release:​ Netflix has a website where news surrounding the company can be

accessed. On the website, users can select the country where they are in and see the news
 pertaining to their country, but also have the ability to see global Netflix news. While this

feature is helpful, Netflix primarily communicates with its audience through their social

media platforms, mainly through Instagram and Netflix. This is because more of their

targeted audience (ages 18-49) is more likely to engage with content on social media as

opposed to websites.

◆ Social media is where a majority of their users will be able to see teases and sneak

peaks of new or returning content. A recent example of this is when Netflix

posted a picture of Penn Badgley, the star of their popular thriller series, ​YOU.​ He

was pictured wearing a face mask that read, “Hello You”, a common phrase used

by his character, Joe Goldberg. The caption of the post then read: “stay at least 6

feet from Joe Goldberg at all times. YOU season 3 is back in production.”

◆ While Netflix does advertise new releases on their social media accounts, they

also advertise new content on their streaming platform itself. On the “browse”

section of Netflix, they have a section for the Top 10 television series and movies

that are trending in your country. They also offer a section for new releases so

users can easily find them.

◆ Furthermore, on Netflix’s standby screen, which opens if a show is paused or has

ended for an extended period of time, the streaming service advertises famous TV

series and movies as well as showing upcoming releases. By doing this, Netflix is

able to advertise in a simple way while having a lasting effect on the viewer.

➔ Media Advisory:​ Netflix responded to the backlash surrounding the advertisement for the

French drama, ​Mignonnes​ (translated to ​Cuties)​ ​,​ via Twitter. ​Mignonnes,​ a

Sundance-awarded French film, is about the story of an 11-year-old girl who breaks away

from her traditional family’s ideals and joins a dance group. The film was meant to tackle

the gross sexualization of young girls.

◆ The two movie posters are drastically different. The movie poster on the left was

the original that was used for the Sundance Film Festival, the second poster was

the one that appeared on Netflix. Many were outraged at how Netflic advertised

this film, claiming the advertisement as inappropriate and that it “sexualizes an

11-year-old for the viewing pleasure of pedophiles”.

 ◆ Above is the Twitter post from the streaming service’s main account, @netflix,

apologizing for the way the film was advertised. They fixed the way they

advertised the film and made it less provocative.

Timeline/Implementation

➔ Audience engagement at Netflix is handled by the Marketing, Content, and

Communications teams. Together, they are in charge of communicating on the behalf of

Netflix. The most effective ways that the company communicates with users is through

social media or through their About Us website. Both mediums offer insights and

information about the company as well as current events within the company, however,

they are fundamentally different platforms that communicate different needs.

◆ Netflix uses content to communicate with audiences through social media. There,

Netflix can share posts about upcoming releases as well as interact with users and

followers. The company also makes public statements through social media,

primarily on Twitter, as that is the medium in which the most people are going to

see and interact with their message.

 ◆ Through their About Us website, Netflix can provide more detailed information

about upcoming shows or releases on both a localized and global level. The

information is presented through articles and includes details from directors,

actors, and company news.

◆ Since the company has a worldwide presence, they have to be organized and

perceptive to all of the different praises and criticisms of their company as well as

addressing concerns in a timely manner. So far, Netflix has responded quickly to

urgent criticisms, the most recently occurring with the controversial ​Cuties p​ oster

which was described above.

➔ Netflix has been slower to address complaints about whether their cancelation of shows

like ​I Am Not Okay With This,​ ​The Society​, and ​Atypical.​ The streaming service explained

that the shows had to be canceled since “production was impacted by COVID-19.”

Thousands took to Twitter to protest the cancellation of these shows, accusing Netflix for

cancelling the shows because their lead characters were lesbians.

◆ This isn’t the first time that Netflix has seemingly cancelled shows that portray

lesbians as lead characters. Shows like ​Everything Sucks!​ and ​One Day At A Time,

which featured lesbian leads, were also cancelled after one season. Netflix has

historically been much better at portraying gay males and gay male culture. For

example, Netflix’s ​Queer Eye​ has been running for five seasons and has just been

commissioned for a sixth. Complaints for cancelling the lesbian-led shows have to

do with both homophobia and misogyny.

 ◆ Netflix has yet to comment further on the issue. If the company were to provide

more in-depth information about why the widely-popular shows were cancelled

instead of connecting cancelling them to COVID-19 complications. While

COVID-19 has definitely been a prominent issue in 2020 and has caused delays

across television and film, ultimately, Netflix has proven that they were able to

continue filming content despite COVID-19 complications.

Evaluation:

➔ Quantitative​: According to The Verge, Netflix has added a whopping 16 million

subscribers in 2020. This is in part due to the COVID-19 pandemic where millions of

people worldwide were ordered to stay at home and shelter in place in an attempt to slow

the spread of the virus. With more people at home with a limited amount of activities to

keep them entertained, services such as Netflix flourished since they already provided

at-home entertainment. This success allowed Netflix to further establish their position as

a top-streaming service around the world.

◆ An influx of new content was also released around the time of the more serious

lockdowns that occurred between late March and early May. Netflix promised

subscribers that they wouldn’t run out of content for viewers to watch, and they

definitely lived up to that expectation.

● In both March and April, Netflix announced that 58 new or updated

Netflix original content was going to be released each month. In March,

46 new television shows and movies were added to the service. In April,

Netflix announced that 15 new shows and movies were added to the

service.
◆ Netflix’s success can definitely be measured in quantitative measures due to their

successes being available through easily accessible numerical values. Netflix has

to rely on quantitative measures to determine success due to their worldwide

platform. Not all qualitative or anecdotal terms of success are going to translate

across cultures, but quantitative measures have that ability.

SOURCES:

https://www.google.com/search?rlz=1C5CHFA_enUS895US895&ei=3z5RX5DxEaux0PEPs5y
B6AM&q=when+did+netflix+start&oq=when+did+net&gs_lcp=CgZwc3ktYWIQARgAMgcIA
BBGEPsBMgIIADICCAAyAggAMgIIADICCAAyAggAMgIIADICCAAyAggAOgUIABCRAj
oLCC4QsQMQxwEQowI6CAgAELEDEIMBOgUIABCxAzoICC4QxwEQowI6BAgAEEM6A
gguOgcILhCxAxBDOgYIABAKEEM6BQgAEJIDUMD3B1jxgQhg054IaABwAHgAgAGOAY
gBoQmSAQM2LjaYAQCgAQGqAQdnd3Mtd2l6wAEB&sclient=psy-ab

https://variety.com/2018/digital/news/netflix-streaming-dvds-original-programming-1202910483
/

https://interestingengineering.com/the-fascinating-history-of-netflix

https://www.fastcompany.com/90309308/by-any-memes-necessary-inside-netflixs-winning-soci
al-media-strategy

https://www.businessofapps.com/data/netflix-statistics/#:~:text=Conversely%20the%20proportio
n%20of%20single,47%25%20of%2065%2B%20users.

https://mission-statement.com/netflix/

https://netflixcompanyprofile.weebly.com

https://www.netflixinvestor.com/ir-overview/long-term-view/default.aspx

https://www.thestreet.com/investing/netflix-3-biggest-challenges-for-2020

https://qz.com/604136/netflixs-lineup-of-original-shows-is-kind-of-confusing-and-thats-the-poin

t/#:~:text=In%202013%2C%20it%20adopted%20the,all%20written%20in%20nontraditional%2

0ways​).
https://jobs.netflix.com/blog/publicity-and-impact

https://www.tomsguide.com/best-picks/best-netflix-shows-outside-us#:~:text=Netflix%20now%

20streams%20in%20almost,to%20watch%20varies%20by%20territory.&text=Those%20VPN%

20services%20are%20the,block%20VPNs%20and%20proxy%20services​.

https://thecreativeconversation.wordpress.com/2020/05/11/netflixs-on-and-off-the-screen-diversi

ty/

https://www.theverge.com/2020/7/16/21326434/netflix-second-quarter-earnings-tv-shows-movie

s-originals-subscribers-adds-ted-sarandos

https://www.japantimes.co.jp/news/2020/04/22/business/corporate-business/netflix-pandemic/

https://time.com/5812787/new-on-netflix-april-2020/

https://time.com/5812787/new-on-netflix-march-2020/

https://thetab.com/uk/2020/08/24/netflix-hates-lesbians-fans-are-raging-after-netflix-cancels-thre

e-lesbian-led-shows-172334

https://www.midlandszone.co.uk/news/netflix-slammed-after-axing-three-shows-with-lesbian-le

ads-characters/21135