A

RESEARCH PROJECT REPORT ON

NETFLIX:- EVOLUTION OF ONLINE STREAMING

SUBMITTED TO DR. A. P.J. ABDUL KALAM TECHNICAL

UNIVERSITY IN PARTIAL FULFILLMENT OF AWARD OF
DEGREE OF
MASTER OF BUSINESS ADMINISTRATION

SUBMITTED TO :- SUBMITTED BY:-

DR. MONIKA AGARWAL SHUBHAM MISHRA
H.O.D M.B.A M.B.A 4TH SEMESTER
SESSION 2023-24

AFFILIATED TO:-

DR. A. P.J. ABDUL KALAM TECHNICAL UNIVERSITY, LUCKNOW

RAMESHWARAM INSTITUTE OF TECHNOLOGY
AND MANAGEMENT, LUCKNOW
 DECLARATION

This project titled “NETFLIX:- EVOLUTION OF

ONLINE STREAMING

” is submitted in Partial fulfilment of

the requirement for the degree of Master of Business

Administration (MBA) of Institute of Engineering and

Technology, Sitapur, Uttar Pradesh. The compilation of this

project is done by SHUBHAM MISHRA and the assistance and

helping

during the execution of this project has been fully acknowledged. I

further declare that the information present in the project is true

and original to the base of my knowledge.

SHUBHAM MISHRA
M.B.A 4TH SEMESTER
 ACKNOWLEDGEMENT
An exchange of ideas generates a new impetus to work in a better
way. Apart from the ability labour and time devotion,
guidance and wholehearted co-operation are the two pillars for
building the success of a project. Whenever a person is helped or
co-operated by others his heart is bound to pay gratitude to his
benefactors.

The pleasure that accompany the successful completion of

task would be incomplete without acknowledging the contribution
of the people who have made it possible and whose constant
guidance and encouragement served as a guiding light for the
completion of the study.

I take this opportunity to express my deep gratitude to DR.

MONIKA AGARWAL Head of Department (HOD), Institute of
Engineering and Technology, Sitapur whose guidance and support
helped immensely in the successful completion of this project.

Last but not the least I would like to thank my parent and friends
for their support and suggestions.

SHIVAM DIXIT

M.B.A 4TH SEMESTER

 TABLE OF CONTENT

Chapter Page.no
1. INTRODUCTION 1

2. HISTORY OF NETFLIX 3

3. NETFLIX AS A GLOBAL TV NETWORK 7

4. THE OTT ECOSYSTEM 20

5. NETFLIX’s UNIQUE BUSINESS MODEL 26

6. ENTRY OF NETFLIX IN INDIA 33

7. MEMBERSHIP OF NETFLIX 38

8. OBJECTIVE OF RESEARCH 40

9. RESEARCH METHODOLOGY 42

10.CONCLUSION 58
11.QUESTIONNAIRE 59

12.BIBLIOGRAPHY 61
 1

1-INTRODUCTION

> Netflix Inc. is an American media-services provider and production company

headquartered in Los Gatos, California, founded in 1997 by Reed Hastings
and Marc Randolph in Scotts Valley, California. The company’s primary
business is its subscription-based streaming service which offers online
streaming service of a library of films and television programs, including
those produced in-house.As of April 2022, Netflix had over 221 million paid
subscriptions worldwide,
including 4.5 million in india , and over 154 million subscriptions total
including free trials. It is available worldwide except in mainland China (due
to local
restrictions), Syria, North Korea, and Crimea (due to U.S. sanctions).

> The company also has offices in the Netherlands, Brazil, India, Japan, and
South Korea. Netflix is a member of the Motion Picture Association
(MPA).Netflix's
initial business model included DVD sales and rental by mail, but Hastings
abandoned the sales about a year after the company's founding to focus
on the initial DVD rental business. Netflix expanded its business in 2010
with the introduction of streaming media while retaining the DVD and Blu-
ray rental
business. The company expanded internationally in 2010 with streaming
available in Canada, followed by Latin America and the Caribbean. Netflix
entered the content-production industry in 2012, debuting its first series
Lily hammer.

> Since 2012, Netflix has taken more of1 an active role as producer and
distributor for both film and television series, and to that end, it offers a
variety of "Netflix Original" content through its online library. By January
2016, Netflix services operated in more than 190 countries. Netflix released
an
estimated 126 original series and films in 2016, more than any other
network or cable channel. Their efforts to produce new content, secure
the rights for additional content, and diversify through 190 countries have
resulted in the

company racking up billions in debt: $21.9 billion as of September 2017,

up from $16.8 billion from the previous year. $6.5 billion of this is long-
term
 2

debt, while the remaining is in long-term obligations. In October 2018,

Netflix announced it would raise another $2 billion in debt to help fund
new content.

> During the last few years the company introduced another successful approach
for expanding its user base. It offers exclusively its own produced content like
the
“House of Cards” and “Arrested development” series, thus merging the
traditional roles of the content creator and content provider in the content
networking value chain and improving the flexibility in terms of satisfying
customer‟s demands in a more efficient way than before.

> This approach facilitated an incensement in Netflix‟s profits, minimizing the

influence of the suppliers on its business model and maximizing the uniqueness of
the
platform. Lately the company implemented atrial-based advertising strategy for
attracting new customers, while at the sametime is building strong relations with
the TV device manufacturers complementing their product characteristics with
additional access to the network for a limited amount of time after the purchase of
the TV set.

2
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2-HISTORY OF NETFLIX

> Netflix launched as "NetFlix.com, Inc." in April 1998. It launched with 30 employees
from a small storefront in Scotts Valley that maintained an inventory of everyone
of the 925 titles that had been released in the new DVD format to date. The
company offered something unique: a service that allowed customers to log-into
an Internet movie database, create a profile, and order DVD titles to be delivered
directly to their homes. Within 24 hours, demand was so high that its servers
crashed.

> Without adollar spend on advertising, Netflix shipped over 20,000 DVDs in its first
four months of operation; an impressive start for a company shipping content in a
new and untested medium – the DVD – through an embryonic interface – the
World Wide Web. From the very beginning, Netflix pushed the boundaries of
technological innovation. In fact, Netflix was never in spirit just a DVD-by-mail
company.

> Common knowledge sees Netflix as a DVD rental company that, when faced
with changing industry standards, rose to the occasion and transitioned to a
video
streaming company in order to stay ahead of the curve.

> This, however, is a simplistic, inaccurate writing of history. Netflix was always an
Internet company – astreaming company – biding its time until technology, and
the consumer behaviour towards that technology, developed enough to support
a
streaming Internet service. This is not to
3 say that Netflix’s years as a DVD rental
company were wasted. Over those ten years, Netflix faced a number of
challenges from competitors, industry fluctuations, and consumers.
> Throughout, though, the executives at Netflix built on what they knew from the
first days of incorporation: that to succeed as a purely Internet company its service
would need to be 22 extremely personalized, with an attractive and easy-to-use
interface and a huge video collection.
 4

> These basic tenants served Netflix as well in 1998 as they did when the
company started streaming in 2007, when it first started expanding
internationally in 2010, and, in its latest phase, began producing original
programming in 2012.

> Netflix’s first decade may, in fact, be Netflix’s most important era, particularly in
terms of brand development, understanding direct-to-consumer relationships, and
exploring what it means to be a uniquely Internet-based company. Namely, to
create a personalized experience that puts control in the hands of the customer. If
the cable revolution in the 1980s was about viewer choice, the Internet revolution
in the 2000s was about personalized viewer experiences.

> Now, viewers not only have control over what they watch, but how, when, and
where they watch their content. Netflix has always known that, in order to provide
these personalized experiences, it must innovate in the space where technology
and content intersect. In its first era, Netflix’s innovations with devices, its
matching
algorithm, and its approach to long tail content set the stage for its later iterations.
So that when Netflix did start streaming in 2007 it was a well established brand,
known for technological innovation and a direct-to-consumer philosophy that was
more than mere lip service. Because these things were in Netflix’s DNA from the
very beginning, it was able to lay the groundwork for the innovative Internet
network that it would become.

> The long tail is a term coined by Chris Anderson, first in a Wired article in 2004
and then in his book The Long Tail: Why the Future of Business is Selling Less of
More
(2006). The term describes a cultural and economic phenomenon of the 21st
century: the shift from selling a lot of very few items (mainstream products) to
selling fewer numbers of more items (niche4 products). More money can be made,
for
example, by selling lots of different types of music to targeted music lovers – as
Amazon and iTunes do – than by selling a few Top 40 hits to the mainstream – as
radio stations and brick-and-mortar stores like HMV and Tower Records used to
do. The shift has been made possible, in large part, by the advent of the
Internet, digital storage and delivery, and matching algorithms, as well be
discussed in detail later in the chapter.
 5

> 1998-2007: Netflix’s Early Years Netflix has as many origin stories as a superhero.
The official story is simple. On the way to returning a long-overdue copy of Apollo 13
– the astronaut metaphor is a nice touch – co-founder Reed Hastings was inspired
to find away out of the exorbitant late fee, and the ensuing nagging from his wife
regarding that late fee.

> So, in response to this inconvenience, he developed a model of video distribution

that eliminated the late fee. In her book, Netflixed, Keating tells a different
version of the hit-by-a-bolt-of-lightning moment. Her version describes a
moment when co- founders Hastings and Marc Randolph met in a commuter
parking lot in Silicon
Valley, an envelope in their hands. That envelope held a CD, which they had
proven could be successfully shipped through the US Postal Service, without
scratches or
cracks.

> Whereas the size and vulnerability of VHS tapes made them difficult and
impractical to ship, the flatness and stability of DVDs was tailor made for USPS
shipping. That
version of the story, then, infuses Netflix’s origin story with technological
innovation, rather than the more consumer-centric approach of Netflix’s official
story. The truth is probably somewhere between these two variations of Netflix's
origin story.

> Netflix’s initial operation was based entirely on two technological innovations: the
Internet and the DVD. To create a company based on those two innovations,
Netflix had to rethink the changes and possibilities of consumer behaviour; a
lesson its brick- and-mortar competitors never learned. Netflix realized that
technological change
and behavioural change would have to go hand in hand.
5
 To have one without the other would bode failure. NetFlix was founded by Reed
Hastings and Marc Randolph who, themselves, symbolized the meeting of technology
and consumer behaviour. Hastings, the tech guy with The name was changed to
"Netflix," without the uppercase "F," because executive thought it looked better
printed on the redbranded shipping envelopes . previous CEO experience, and
Randolph the
consumer guy who was, at one time, considered the soul of the Netflix start-up.
Hastings initially put up the money, and some of the brains, for Netflix. Born in Boston
 6

to a wealthy family, Hastings was liberal arts educated at Bowdoin College.

Always invested in education, Hastings did a post-undergrad stint teaching

math in Swaziland before he moved to the West Coast to pursue a graduate degree in
computer science at Stanford. He never left, founding his first company, Pure
Software, directly out of graduate school. He made his first fortune selling the
company only a few years later for $750 million dollars, providing the start-up money
for Netflix.

> Although he stayed on to run Hastings’ marketing department, Randolph was

fascinated by the possibilities of the Internet and knew that his next company
would be Internet-based. For Randolph, the Internet was less about new
technology and more about new ways to relate to and communicate with
customers.

> As he said about Netflix in its very early days, "the model is not to be a geeky
Internet company. We want to set it up so that anybody who owns a DVD player
has a place they can go that rents every DVD and always has the title they want
available" (Espe, 1998). Of course, in 1998 both DVDs and Internet consumerism
appealed mainly to early technology adopters, but Randolph’s point is well-made:
the Internet has away of democratizing access and minimizing the barriers
between
direct two-way contact between company and consumer.

> Randolph has since faded into Netflix lore. His expertise indirect-to-consumer
marketing and manipulating the USPS system were essential to Netflix’s DVD-by-
mail phase. As Netflix grew, though, and started building towards its failed IPO in
2000
6
and its successful IPO in 2002, Randolph’s expertise gave way to Hastings’.
Originally, Hastings had taken a backseat, playing more of a silent investor's role
 while he
started a masters degree in education at Stanford and left the day-to-day
operations to Randolph and Mitch Lowe, who was broughton to develop
partnerships with
studios and video distributors. Lowe had years of experience in the rental
industry, having founded Video Droid in the 1980s and opened a number of
rental stores
throughout the 1990s.

> As Netflix’s VP of purchasing and business development, he was responsible for

developing profit-sharing deals with the studios for cheaper DVDs and shortening the
 7

windows between theatrical release and when a movie was available for renton
Netflix. Hastings, though, was a seasoned CEO with knowledge of, experience
with, and friends in the investment community.

7
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3- NETFLIX AS GLOBAL TV NETWORK

> First, Netflix has licensed American content to share in countries where it is not
yet available. Netflix's original programming is extremely popular: Orange is the
New
Black, for example, was the most watched show in France and Germany the first
month Netflix was available in those countries (Sarandos, 2014). Hemlock Grove is
popular in Latin America (2014). Netflix has also worked hard to license
programming in early windows. "I'm organizing my entire organization as global
buyers now, instead of regional buyers," Sarandos explains (Villarreal, 2015).
When making deals, then, Sarandos'team has a global picture in mind rather
than just a
domestic one. Ahead of Netflix's move into the UK and Ireland, the company
made a deal with CBS for shows like Dexter, Jericho, and Charmed (Szalai, 2012b),
an
extension of the deal they made ahead of their Latin American launch for the
same shows in their Latin American territories (Szalai, 2011b).

> Although the CBS deal is non-exclusive, Netflix did buy the exclusive rights to air
Breaking Bad spin-off Better Call Saul in its first window in Europe and Latin
America. So, episodes of Better Call Saul aired shortly after they aired in the US,
and episodes of Breaking Bad were be available in the UK and Ireland in the
second window, just a day after each episode aired (Solsman, 2013). With these
kinds of exclusive, first run deals, Netflix positions itself as the premier Internet
programmer for American
content everywhere in the world.

> Second, Netflix has licensed shows from around the world to air in the US and
in other markets. While licensing American content abroad is highly profitable,
"connecting a global audience with global content is a huge opportunity,"
8
Sarandos believes (Sarandos, 2011b). International programming does have a
proven, albeit small and recent, track record for success in the US. OTT
 offerings focusing on
international content have been particularly successful.

OTT Korean programmer DramaFever, for example, started with a niche offering that
has grown and, in 2013, more than 85% of its subscribers were non-Asian viewers (Yu,
2013).
 9

UK dramas Skins, Misfits, and Downton Abbey have also proven successful on MTV,
Hulu, and PBS, respectively. These shows, however, are all British and, more
importantly, are all English language shows.

> Netflix believes that it's possible to license non-British, and possibly non-English,
programming in the US. Financing media in Europe before bringing it to the US
has been a common practice in indie films and, in anever-competitive TV
environment that's desperate for more and more content, it's a lower risk
possibility. Ted Miller, co-head of TV at CAA, explains that "US networks are
looking to reduce their risk,
and they are happy to take an internationally packaged show if it means they can
get the same value onscreen but pay a reduced licensing fee."

> This is especially true now that international content creators like the UK's BSkyB,
and France's Canal+ and TF1 have deep enough pockets to produced high quality
English language shows (Roxsborough, 2014). Deep pockets that Jan Mojito, CEO
of German rights giant Kirch Group, argues are necessary in the new global
marketplace: [T]here has developed an international code of quality.

> It you make a show in Europe these days, you know it has to compete on the same
level with an American show. The international market is setting the standard and
you have to measure up to that . . . But because we produce at that level we need
the American market to cover our costs, so the question isn't whether you sell to
American, but when you approach that market. (Roxborough, 2013) Netflix's role
in distributing content all over the world, particularly bringing it into the
American
market and helping make it successful there, has had a huge impact on the
way content can be created in non-Hollywood local markets.

> This has worked particularly well for the French production market. "For the cost
of producing their own newsmagazine show they can program original big-budged
scripted drama," explains French agent Erwin More (Roxborough & Richford,
2014). French producers, then, have started producing programming with a
9 French wave, of sorts. French
global mindset that has resulted in a new
production company
Gaumont International TV, for example, produced Hannibal for NBC and Hemlock
Grove and Narcos for Netflix. The Returned, the Englishlanguage adaptation of
Les Revenants, has had critical success in the US, while the subtitled version has
been
similarly acclaimed in the UK. HBO is also developing an English-language version
of French prostitution drama Maison Close.
 10

> The goal, says Olivier Bibas, managing director of French production house
Atlantique, is "to create an alternative to that US invasion and show the world that
in France and Europe we can make content that can sell to the world, including the
US" (Roxborough & Richford, 2014). One of Netflix's biggest challenges has been
to take content that's uniquely popular in one part of the world and make it
popular in other parts. Netflix has a number of advantages, however, that allow it
to face this
challenge head-on.

> As a personalized Internet network that releases programming outside of a date-

and- time schedule, programs have time to grow and develop and attract an
audience
willing to watch international content. Lisa Nishimura, VP of content acquisition
for Netflix, argues that, due to its delivery method, streaming breaks down the
barriers between Netflix subscribers and the types of content they are willing to
watch: "You hit 'play.' You don't love it, you hit 'back' and goto something else"
(Yu, 2013).

> Starting a program is not the commitment it used to be and, therefore, viewers are
more willing to experiment. Additionally, with the use of its algorithm, Netflix can
put content directly in front of viewers who are pre-disposed to watch it. For
example,
putting a French or Mexican program in front of viewers who don't mind subtitles.
Or, putting Canada's Bomb Girls and the UK's Call the Midwife in front of
American audiences who enjoy historical fiction with strong female leads.

> With the unique possibilities of Internet distribution, Netflix can license foreign
programming with little risk in the US. Third and finally, Netflix produces content in
many of the markets it enters. These programs are produced in each country’s
native language, are tied to cultural peculiarities, and are produced, directed by,
and starring local talent. While these shows are local, in the same way that House
of Cards is local to US- and DC- specific 10
politics, they are also meant to work on a
global scale, in the
same way that House of Cards’ political intrigue and power dynamics
are comprehensible in non-US markets.
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4- THE OTT ECOSYSTEM

> Netflix launched in April 1998 as a DVD-by-mail business with dreams of becoming
a direct-toconsumer Internet media company. Over nearly two decades, Netflix
innovated in the space where consumer behavior and technological
advancements overlap. Through two major rebrands – from a DVD-by-mailto an
Internet
syndication company, and then from a syndication company to an Internet TV
network – Netflix both adapted to, and created, significant changes in how
media is produced, distributed, and viewed.

> The Netflix template has become the gold standard in Internet television.
The template is based on five major tent poles:

• 1.Internet networks have to be consumer-centric. In ways that broadcast and

cable networks aren’t, and can’t be, Internet TV networks are inherently direct-
to-
consumer. Netflix gives subscribers’ the choice to watch whatever media they
want, wherever and however they want to; in terms of content, Netflix produces
and
syndicates niche, personalized content and then puts that content directly in front
of the viewers who want to see that content – are based on creating a rich,
personalized consumer experience.

• 2. Internet networks have to innovate 21

on the intersection between technology
and the consumer. From the very beginning, Netflix took technology that
consumer’s
loved and craved – the DVD, mobile technology, Internet streaming – and
adapted media strategies to fit those consumer behaviors towards technology.
Importantly, Netflix didn’t stop there- it actually innovated in that area, creating
easy-to-use
technologies – the website,for example, or the matching algorithm or the
streaming app – that pulled consumer behavior forward and actually affected the
ways
consumers used technology.
 22

• 3. The buzz around Internet networks comes from original programming.

Specifically, Netflix has developed quality programming – e.g. Orange is the New
Black, Daredevil, Unbreakable Kimmy Schmidt – that has captured the cultural
zeitgeistand has made Netflix a destination for viewers who really lovegood TV
and want to trade in cultural currency. This content shares much in common with
traditional quality TV, but it also adapts content to the originalities of the Internet,
both in terms of distribution –
Netflix’s binge-viewing strategy is the most clear example – and content – like
Netflix’s emphasis on personalized, niche content that breaks traditional TV
barriers in terms of diversity and genre become a global content business.

• 4. Internet networks are both global and local. With an increasingly saturated
US content market, and the global nature of Internet distribution,
international
expansion is a natural and necessary step for Internet networks. International
expansion is a delicate process, however, and Internet networks must be aware
of local realities in terms of existing media content, legalities and taxes, mobile
and broadband penetration, and local content tastes.

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 5- NETFLIX’s UNIQUE BUSINESS MODEL

> Business model as a concept is used to describe different issues; for example in
70‟s business models was used to describe the business processes and
knowledge
management inside the company, for the purpose of building information and
communication technology systems to enhance the workflow inside the
company. More recently with the era of the information and communication
technology and specifically the evolution of the World Wide Web; business
model concept has been more used to describe market structure and how
individual companies will place
themselves and operate in those structures.

> The evolution of the World Wide Web has opened a new communication channel
which in return opened new business form (E-business) which is discussed using
the business model concept.

> For Netflix case; Hawkins description and the definitions by Timmers and
Osterwalder could be a well-defined description for Netflix business Model.

> Netflix business model approach is called the “Long-Tail”. This approach in the
Netflix context is to have tremendous variety selections of movies, TV shows and
lot of other videos where the vast majority of these contents are not popular and
still can make a lot of money from that by targeting a real wide number of
customers. The following figure shows the long tail approach.

> The success of the long tail approach can

28 only exists in the online store, due to
the limitation of having inventory in physical stores.
 >NETFLIX’ MARKETING STRATEGY:-

Netflix follows multi-channel marketing and utilizes social media, print media,
website, Youtube, billboards, and various other channels for promotions. Netflix
does not only spends a huge budget on campaigns but also utilizes the cost-
effective tactics of
marketing. So stream on the most successful marketing strategies of Netflix.

• Netflix-push-notification:- If you area Netflix user, you must’ve got a push

message from Netflix suggesting any movie or series you might like. Also, in their
application, they prepare a list of “top picks for (your name).” Using the user’s
name instead of using “top picks for you” makes a big difference. After all, we
got a name, and we
would love to hear it from Netflix.

• Netflix-email-marketing-strategy:- In addition to this, in Netflix’s email marketing,

they follow personalization as a key to communicate better. Personalization gives
the users a sense of attachment with the brand, and it builds a strong connection
with
them. So never forget your customers’ name and their preferences.

• GUERILLA MARKETIBG:- If you think that big brands like Netflix make a huge
investment in their marketing campaign, then you are wrong. The marketing
strategy of Netflix includes guerilla marketing which is a non-conventional and
low-cost
practice to promote a brand. But the results guerilla marketing brings are big
in numbers.

29
• BUZZ MARKETING:- Well, if the people knowless about something, they will talk
more about it. Netflix sells itself using this tactic. Netflix releases snippets and
 drops hints for their upcoming releases. It forms an urge in the audience to know
what the brandis planning, and it creates a lot of excitement in the audience. All
this becomes a topic of all the chatters

• MEME MARKETING:- One can confuse Netflix’s social media page for a meme
page. The OTT platform knows well that Millenials and the Gen Z generation love
memes, so they use meme marketing strategy to target the audience.
 1.Analysising Netflix’s Strategy:-

• Strategic Issues:-

As society and science technology develops, the Internet has begun to change peoples‟
daily lives, such as the habits of study, communication and entertainment. Thus, in the
context online business has become more and more common. Netfixs was online
business, founded by Hastings in 1997. Its service item was online subscription-based
DVD rentals.

In the process of development, Netfixs existed seven main strategic issues: Firstly, Netflix
ignored the actual situation and chose the similar business model with the other famous
internet brands like eBay, Amazon. Because of competition advantages with other
retailers, Netflix did not realise this until they found out the subscriber would not choose
to return
after their first experience.

Secondly, In order to develop the market, the firm has to spend much money to
attract more new customers, and Netflix neglect the coustmers service, so that some
early
customers still lost by the slower service that Netflix offered.

30

Thirdly, Customers always like top new released movies which were the most expensive,
thus increased the cost of Netfixs. As a result, the subscribers should expense more cost
to acquire new movie because of the strategy called „all you can eat‟. And Netflix was
always shipping the new movies package which has some old movies, but most
subscribers may not like them.

Fourthly, the number of new films was less than the desired one and it leaded to
customers‟ dissatisfaction. Due to there was no direct relationships with the major studios,
Netfixs only built its film library through relationships with a small number of
movie distributors.

fifthly, According to the subscription-based services,customer loss is the key strategic

issue of Netflix.

Owing to the high competitive market and raise of price, customer loss has become an
urgent problem. Hence, customer acquisition, which includes developing new clients and
retaining old clients, has become the main strategy to improve the business performance
of the company.

Finally, the threat from video on demand (VOD) influences the performance of Netflix
seriously. VOD can immediately provide customers to watch latest movies. Therefore,
they consider that VOD is more convenient than DVD rental and traditional video stores.

Netflix’s Strategy: An analysis utilising the strategic tools PEST, Porter‟s Five Forces
model and SWOT.

31
 2. PEST Analysis:-

Netflix is subject to political, economic, social and technological elements like

other companies in the movie rental industry. Changes to any of the elements in
this area might have a substantial effect on the business and operations of movie
rental
companies.

1) Political factor Netflix might be influenced by changing laws concerning copyrights of

certain kinds of content, like the television and movie shows that companies rely on to
present to customers. Copyright law changes might affect Netflix ability to distribute
this content to customers which could significantly impact business because this
content might represent large segments of a company's services offering .

2) Economic Factor For Netflix competitive advantage to be maintained, it is essential

to price competitively against rivals. Netflix is working in a business that depends
mainly on the disposable income of its clients. If the growth of economic rates were
slow and the
power of customers purchasing are negatively impacted, Netflix would feel the impact
of this drop in purchasing power first.

3) Social Factor Netflix depends on the attractiveness of movies among customers in

the sectors of the target market. As the average age of the potential consumers carry
on
growing older and Paper filming expenditure among the older demographic turnout to
be less popular, it might adversely affect the business.
32
4) Technology Factor Given that the core operations of its business are internet based,
Netflix has to contend with the continually developing technology sector, as the
industry progress toward online expenditure. The Netflix market share is facing
challenges from new rivals, because of the lower barriers to entry in terms of
streaming content. The
changes of Technology in terms of the internet rates, imposes on competitors in
this industry, the need to continually modernize their model of business to
sustain market share.
 3. Porter’s Five Forces Analysis

> a) Internal Rivalry There is substantial rivalry and competition between the
offered companies in the industry, this include Blockbuster, Amazon, and
Redbox. This
competition is highlighted by the levels of marketing costs and advertising
incurred by each firm. Netflix in 2008, spent over 200$ million in advertising
which was
dominated by various affiliate marketing deals and online advertisements,
and remained at about 14% of revenue (Netflix, 2010).

> b) Substitute Products and Services For most homes Digital cable is now
necessary, therefore many customers will have a film collection from their cable
network. “On Demand,” Services offered by cable television providers might be a
substitute for
Netflix if they increase their movie stock list to a similar title selection. It is
essential for Netflix to keep up with the continually changing technology sector in
order to
sustain its success.

> c) Entry of New Competitors Netflix have to keep on maintaining the rising
popularity of e-commerce such as an improvement and enhancing their inventory
of stream
movies with raise their HD streaming inventory. If this attempt is deferred, more
suitable earnings of renting movies will takeover such as “On Demand”. This is
probable because the low-priced entry barriers in the DVD industry linked to
streaming content due to the huge amount of streaming content that could
become obtainable to possible distributors.
33
> d) Bargaining Power of Consumers The industry of movie rental is an active
industry. In times of slower economic growth where customers have a less
amount of optional income their ability of expenses in the industry will be reduced.
In times of a wealthy economy, customers might spend more money on the
industry. This provides
customers a high power of bargaining in the industry of movie because they
can decide to use their entertainment money on alternative services or
products.
> e) Bargaining Power of Suppliers Netflix is completely dependent on studios for
the content they require to provide to customers. Currently, Netflix does not
create any of their own content, if the suppliers were to stop the sharing of their
content to
Netflix, it might cripple business model of Netflix. This provides the
suppliers extreme power over contract negotiations with Netflix for
content acquisition.

34
 4. SWOT analysis:-

• 4.1 Firstly: Netflix's Strengths analysis:-

• Competitive "first-mover": Competitive "first-mover" advantages comprise

identifying strong brand name and knowledge base. Economies of Scale in Netflix's
Business Model: Online flexible infrastructure and interface allows Netflix to
preserve low operating expenditure whilst raising its subscription base. Netflix's
position in the industry will rise if movie downloads become the consumption
technique of choice by subscribers. Consequently, because Netflix's subscribers
increase, will lead to a decrease in marginal operating costs and increase in
profits. (Amematekpoet al, 2011).

• Netflix was able to achieve competitive advantages by offering low price, free
shipping, large selection, and no late fee policy. This improves the levels of
consumer satisfaction and referrals. Netflix's Market Power: Netflix has been
gaining
control of a large area of the online DVD rental market and as a pioneer in this
industry, Netflix has become a household brand. Electronic-commerce Expertise
Expertise of Electronic-commerce including proprietary "Cinematch" software
movie referral. Value in Netflix's consumer Services: Netflix presents a
dedicated DVD
recommendation facility based on the assessments and viewed films by its
previously subscribers.

• These recommendations coupled with Netflix‟s extensive DVD inventory enable

consumers to discover beyond the video
35 content of the prevailing video feature
films. The service is proprietary and unique to Netflix services. Library Content
and Large DVD catalog: Currently, Netflix has a large, video content library.
Netflix has more than 100,000 titles and 72 million discs, this including; TV
shows, vague movies, and new releases. (Netflix, 2009) Experience and Skills:
Netflix‟semployees have a passion for movies which would translate to a positive
work ethic.
 • 4.2 Secondly: Netflix's Weaknesses analysis:-

Financial Resources: Small Financial resources compared to competitors like

Blockbuster. Consumers have to wait atleast one or two days to obtain their films.
Lack of Diversification of the world: Despite of that fact that Netflix present its
services across the U.S and some other countries, Netflix has not expanded outside
those few
countries, which makes Netflix to depend on one or few markets. The globalization
can benefit the Netflix's business by increased opportunities for growth and
strength.

Dependent on USPS as subject to postage increases, distribution channel to

forward.
Subject to technological change. Netflix‟s product based on its services to their

subscribers, this means that the Netflix‟s strength and growth will depend on the high
Average Revenue per User, low Subscriber Acquisition Costs, and maintaining low churn
rate. These issues might be difficult to control due to the absence of transition costs in
the video entertainment industry. Netflix's brand Loyalty: Netflix's brand loyalty is
not that great, while it has a high level of brand recognition. In 2011, a series of
corporate missteps caused the firm to lose more than 800,000 consumers.

• 4.3 Thirdly: Netflix's Opportunity analysis:-

Netflix's Potential Growth of Subscription: The industry of DVD rental grosses every
36
year, and Netflix might tap into this growing and Expansion into markets. Expansion of
movie download ability. Continued international expansion of DVD internet access,
acceptance of e-commerce and component sales. A small meteor crashes into
Blockbuster Corporate Headquarters Digital Distribution: As video content's
digital distribution turn into a progressively more popular viewing format, Netflix
strategically
located to provide as a connection throughout the slow changeover from physical DVD
system to digital streaming. Netflix is improving it's located in this position than other
companies because Netflix has an Electronic Commerce brand name and business model.
 • 4. Fourthly: Netflix's Threats Analysis:-

Extremely Competitive Market: The industry of DVD video covers a wide range of
viewing prices, technologies, and services. There are some competitors that might
potentially
present home video cheaper than Netflix. If those competitors emerge with a
better streaming ability and lower prices, Netflix‟s business model might be
severely
compromised. (Amematekpoet al, 2011). Changeable Video Rental Industry:
The industry is constantly developing due to formatting and technological
innovations.

Prices, goods, and customer preferences are subject to rapid change, creating irregular
and changeable markets where new competitor usually a threat and an impressionable
business model is necessary to achieve. Subject to direct assault by deep-pocket of
Netflix's rivals, such as subscription products presented by blockbuster.com.

37
 6-ENTRY OF NETFLIX IN INDIA

> American streaming service Netflix entered India in January 2016. In April
2017, it was registered as a limited liability partnership (LLP) and started
commissioning content. It earned a net profit of 2020,000 ( 2.02 million) for
fiscal year 2017. In fiscal year 2018, Netflix earned revenues of 580 million.
According to Morgan Stanley Research, Netflix had the highest average
watch time of more than 120 minutes but viewer counts of around 20
million in July
2018. As of 2018, Netflix has six million subscribers, of which 5– 6% are
paid members.

> India was not affected by Netflix's July 2018 increase in subscription rates
for the US and Latin America. Netflix has stated its intent to invest 600
Crore in
the ₹ production of Indian original programming. In late 2018, Netflix bought
150,000 square feet (14,000 m2) of office space in Bandra– Kurla Complex
(BKC) in Mumbai as their head office. As of December 2018, Netflix has
more than
40 employees in India.

> But in 2022 Netflix lost nearly 150000 sebscribers in india.

38
39
40
41
42
 7-MEMBERSHIP OF NETFLIX

> Netflix introduced the monthly subscription concept in September 1999,

and then dropped the single-rental model in early 2000. Since that time,
the
company has built its reputation on the business model of flat-fee
unlimited rentals without due dates, late fees, shipping and handling fees,
or per-title rental fees.

> While they experienced fast growth in early 2001, both the dot-com bubble
burst and the September 11 attacks would occur later that year, affecting
the company badly and forcing them to lay off one-third of their 120
employees. However, sales of DVD players finally took off as they became
more
affordable, selling for about $200 around Thanksgiving time, becoming one
of that year's most popular Christmas gifts. By early 2002, Netflix saw a
huge
increase in their subscription business.

> Netflix initiated an initial public offering (IPO) on May 29, 2002, selling 5.5
million shares of common stock at the price of US$ 15.00 per share. On
June 14, 2002, the company sold an additional 825,000 shares of common
stock at the same price. After incurring substantial losses during its first
few years,
Netflix posted its first profit during fiscal year 2003, earning US$ 6.5
million profit on revenues of US$ 272 43 million. In 2005, 35,000 different
films were available, and Netflix shipped 1 million DVD’s out every day,
> Randolph, a dominant producer and board member for Netflix, retired
from the company in 2004.

> Netflix was sued in 2004 for false advertising in relation to claims
of "unlimited rentals" with "one-day delivery".
> AT PRESENT 2022 MEMBERSHIP AND PLANS OF NEYFLIX IA AS FOLLOWS:-

44
 8- OBJECTIVE OF RESEARCH

> The main purpose of research is to discover answers to the meaningful questions
such as Netflix,s- market share, customer loyalty, Their perception , profit,
strength and weakness.

> through scientific procedures and systematic attempt. The hidden truths which
are not discovered yet can easily come to light by research.

> All those methods which are used by the researcher during the course of studying
his research problems are called as Research Methods. Methods of research
maybe
classified from different points of view.

• 1)Exploratory research objectives:-

The purpose of such atype of market research is to explore the market. Thus, the
research objectives are defined accordingly. If the research objective was to find out
competition
sales, then the market research questionnaire needs to ask questions as follows How
many brands are present in the market? What are the number of products of each
45
brand? How many dealers are present for each product? What is the average sales per
dealer for each product? Where is the sales more in urban or rural? What is the
quantity purchased per
month and sold per month? Soon and so forth. Thus, this kind of exploratory
research objective prepares you for a quantitative market research process.

• 2) Descriptive research objectives:-

Descriptive research objectives help you to find out WHY an action is being taken. Thus,
this is more of a qualitative research objective. Continuing the above example, why are
the
dealers promoting that particular product in the locality? Why are the customers
purchasing or preferring that product? What are the features of the product which
attract the customers? How is the cost of the product controlled? Thus, these are more
descriptive

questions. Asking the question of why a customer buys a product, warrants a long
answer because there are many reasons a customer might prefer a product, and each
customer’s
preference will be for a separate reason. Thus, designing the market research
questionnaire when the research objective is descriptive, becomes a difficult job. The
marketer needs to be as specific as possible so that he gets the correct answers. At the
sametime, the right
questions need to be asked otherwise there would be a lot of clutter in the market
research report.

• 3) Causal research objectives:-

A market research which wants to observe cause and effect, is known to have a causal
research objective. So, if you now know the different reasons that customers are buying
a product, and you decide to launch a new product of your own, then it will become a
causal market research. If you introduce a new product, what will be the effect in the
market? Will the market accept the product? Or will it reject the same? If the product
can be rejected,
then what can be the causes? Thus, the causal research will find all causes for the
success or failure of a plan. Hence a causal research objective incorporates various
elements of
46
cause and effect in the marketing questionnaire.
 9- RESEARCH METHODOLOGY

> Research methodology is a particular cycle or procedure used to recognize, select,

measure, and breakdown effective data. In exploration papers, the technique area
permits perusers to fundamentally assess the legitimacy and by and large
unwavering quality of the examination. This investigation depends on a blend of
examination
techniques that include: perception, gathering information through poll
and translation of the reactions.

. GEOGRAPHICAL AREA OF RESEARCH:- Traditional topographical

examination for the most part investigates where, and to an enormous degree why,
occasions and
wonders happen, and the thought of room is at the center of what we consider as
the control of topography. This investigation is led in Sitapur.

. PERIOD OF COVERAGE:- Period of inclusion is the timespan needed to finish

the exploration. The length to do this undertaking is around 2 Months. Initial,a model
was
made, the division of work was finished. From that point forward, a poll was setup to
lead the study. The poll has covered all potential inquiries to comprehend and dissect
the clients concerning Netflix, in the event that they are adequately fulfilled, their input,
their 47

perspectives on substance, sound video quality, and so forth The discoveries are
examined later in the exploration paper.
. RESEARCH DESIGN:- The Research Design utilized is Descriptive Research Design.
▪ Descriptive Research Design:-

i. It is very much Structured.

ii. It is utilized in deciding the connection between at least two factors.

iii. It is conservative.
iv. Problems are found after the planning of Questionnaire.

v. It takes less time.

• SAMPLE DESIGN:-

▪ Population:- The examination was led on viewers of Netflix in Sitapur.

▪ Sample Size:- The example size is of 100viewers.

48
. PRIMARY DATA:- Primary information is information gathered from pre-
customized overviews utilizing highlights, for example, studies, surveys, meetings, or
trials. It was
composed to discover the clerk straightforwardly without any preparation. As opposed
to the expression "helper information", this term is utilized. In this examination, the
primary information were gathered utilizing surveys. Surveys are utilized to collaborate
with clients.

.SECONDARY DATA:- Secondary information alludes to information gathered by

optional gatherings other than clients. Basic wellsprings of sociology optional
information are explanations, information gathered by government offices,
authoritative archives, and information that are basically utilized for other examination
purposes. Nonetheless, the
way analysts gather the crude information is unique. In this examination, optional
information was gathered from organization profiles, organization sites, and the Internet.

49
> DATA INTERPRETATION:-

HOW OFTEN DO YOU USE NETFLIX

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

EVERYDAY ONCE IN A WEEK ONCE IN A WHILE NEVER

50
 WHICH PLAN HAVE YOU SUBSCRIBE FOR
60%

50%

40%

30%

20%

149 199 499 649

51
 WHAT IS YOUR OCCUPATION
45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

STUDENT EMPLOYEE BUSINESSMAN

52
 WHAT IS YOUR AGE
60%

50%

40%

30%

20%

10%

0%
26-30 31-35 35+
18-

53
WHAT IS YOUR MARITAL STATUS
MARRIED UNMARRIED

40%

60%

54
 WHAT IS YOUR EDUCATIONAL
QUALIFICATION
60%

50%

40%

30%

20%

10%

0%

12+ GRADUATE POST GRADUATE

55
 DO YOU THINK SUBSCRIPTION PLANS ARE
WORTH OF MONEY. RATE 1-5
45%
40%
35%
30%
25%
20%
15%
10%
5%

0%

ONE-TWO TWO-THREE THREE-FOUR FOUR-FIVE

56
 HOW SATISFIED ARE YOU WITH OVERALL
QUALITY ACCORDING TO YOUR
SUBSCRIPTION PACK.
45%
40%
35%
30%
25%
20%
15%
10%
5%

0%

57

149 199 499 649

 HOW SETISFIED ARE YOU WITH CUSTOMER
SERVICE SUPPORT
60%

50%

40%

30%

20%

LESS SETISFIED MODERATE SETISFIED VERY SETIFIED

58
WERE YOU ABLE TO NAVIAGTE THROUG APP
COMFORTABILY

YES
21%

NO
79%

59
HAVE YOU FACE SOME ISSUE WHILE
STREAMING VIA NETFLIX
YES
5%

NO
95%

60
 WHAT IS MODE OF COMMUNICATION
BETWEEN YOU AND CUSTOMER SERVICE
SUPPORT

MESSAGES
25%

CALLS
61 75%
 WOULD YOU PREFER NETFLIX OVER OTHER
CONTENT PROVIDER
70%

60%

50%

40%

30%

20%

10%

0%

YES NO MAYBE

62
 WOULD YOU RECOMMEND NETFLIX TO
OTHERS
90
%
80%
70%
60%
50%
40%
30%
20%
10% 63
YES NO MAYBE
 10- CONCLUSION

> From one point of view the assumptions stated above are providing sufficient base
for further discussion regarding the economic aspects of Netflix‟s success. From
another perspective they present basic clues in terms of the mechanisms shaping
the future strategy of the company and its service development approach in a
highly
competitive market environment. In both cases the knowledge gained from this
mini report represents a valuable lesson learned from a company which is shaping
the
progress of awhole industry beyond any geographical boundaries. Therefore it
might be challenging to try look at the “crystal ball” of the TV industry and try
guessing
where the process of personalization and convergence of the services would go
in the near future.

> The huge business success of Netflix has not remained unseen. Most of the biggest
players in the TV industry across the Atlantic like HBO and BBC are successfully
imitating Netflix‟s business model, thus developing their own OTT networks for
content distribution and fueling their competitiveness with own cocked exclusive
content. Nonetheless as increasing number of consumers are “cutting their cords”
and switching to OTT TV services, Netflix looks in a good position to use its market
maturity and focus on content development, while the rivals are putting efforts in
maximizing their market shares and refining their platforms. Regarding this
possibility Netflix‟s chief content officer “Ted Sarandos” claims that the main goal
embedded in the company‟sstrategy is “to become HBO faster than HBO can
become us”. Such
64
statement clearly illustrates the intensified process of convergence between the
TV and the movie industries fueled by the technology development and the
Internet
evolution.
 11-QUESTIONNAIRE

1. HOW OFTEN DO YOU USE NETFLIX?

-NEVER

-DAILY
-ONE IN A WEEK
-ONCE IN A WHILE

2. WHICH PLAN HAVE YOU SUBSCRIBE FOR?

-149
-199
-499
-649

3. WHAT IS YOUR OCCUPATION?

-STUDENT
-EMPLOYEE
-BUSINESSMAN

4. WHAT IS YOUR AGE?

-18 — 25

-26 — 30
-31 — 35
-35+ 65
5. WHAT IS YOUR MARITAL STATUS?
-MARRIED
-UNMARRIED

6. WHAT IS YOUR EDUCATIONAL QUALIFICATION?

-12+
 -GRADUATE
-POST GRADUATE

7. DO YOU THINK SUBSCRIPTION PLANS ARE WORTH OF

MONEY? -RATE 10%- 100%

8. HOW SETISFIED ARE YOU WITH OVERALL QUALITY ACCORDING TO

YOUR SUBSCRIPTION PACK?
-RATE 10% — 100%

9. HOW SETISFIED ARE YOU WITH CUSTOMER SERVICE SUPPORT?

-LESS SETISFIED
-MODERATE SETISFIED

-VERY SETISFIED

10.WERE YOU ABLE TO NAVIAGTE THROUGH APP COMFORTABLY?

-YES
-NO

11.HAVE YOU FACE SOME ISSUE WHILE STREAMING VIA NETFLIX?

-YES
-NO

12.WHAT IS THE MODE OF COMMUNICATION BETWEEN YOU ANS CUSTOMER SERVICE?

-CALLS
-MESSAGES

13.WOULD YOU PREFER NETFLIX OVER OTHER CONTENT PROVIDER?

-YES
-NO
66
-MAYBE
14.WOULD YOU RECOMMEND NETFLIX TO OTHERS?
-YES
-NO
-MAYBE
 13- BIBLIOGRAPHY

WWW.GOOGLE.COM

WWW.NETFLIX.COM

WWW.WIKIPEDIA.COM

WWW.THEHINDU.COM

WWW.THEVAULT.COM

WWW.YAHOO.COM

67