Netflix’s business strategies
and business models for
converged video services
INTRODUCTION
▪ Netflix’s Business Strategies
▪ Netflix’s Revenue Models
▪ Suggestion of Organization’s Barriers
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Advantages of Netflix’s Business Strategies over Different Players
Innovative Technology
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Policy & Law
▪
Digital Convergence – Interact
with various mediums.
▪
Encourage New Service –
Negotiates streaming rights.
▪
Interactive Function – User decide
the story.
▪
Cross-Media Ownership – Biggest
OTT video provider.
▪
Broad Bandwidth – Has a
recommended speed requirement
▪
Promote Competition – Didn’t
compete on pricing.
▪
Internet Protocol – Using TCP
▪
Light Touch Regulation –
Regulated like UK Broadcast.
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Advantages of Netflix’s Business Strategies over Different Players
Corporate Strategies
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Consumer Preference
▪
Increase in Added Value – Scores
highly in business element
▪
Convenience – Netflix is
everywhere
▪
Cost Efficiency – Contribution
margin rose
▪
Price – Priciest but no ads
▪
High Quality – More high quality
shows
▪
Adaptability – Continue expand
▪
Content Sources – Most popular
▪
Economic Benefits – Oligopoly in
industry
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Roles and Competitive Advantage
Creation
• Content creator
• Services on
190 countries
Aggregation
• Content
aggregators
• Right dealers
• Algorithm on
channel
Distribution
• Open Connect
Program
• Apps
• Settlement free
interconnection
Consumption
• Devices
manufacturers
• Users
Netflix
Other IPTV
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Evaluation of Netflix’s Business Strategies
Purposes of SELECTED STRATEGIES
Original and Exclusive
Content
▪ Differentiate itself
▪ Longer subscription
Complete
Release
▪ Binge-watching
viewers attraction
Big Data Analysis and
Application
▪ Viewers’ tracking
▪ Content creation
▪ Suitable content for
individual
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Netflix’s Business Strategies Evaluation
1. Original and Exclusive Content
•
Stranger Things, Squid Game, House of Card, etc.
•
Succeed to gain more subscribers
2. Complete Release
•
All-at-Once strategies
•
Challenging to keep subscribers
3. Big Data Analysis and Application
•
Algorithm
•
Understand viewers’ behaviors
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Lesson Learnt from Lost Subscribers
2011
2 accounts for each user
Create friendly user
platform
2022
Raised prices
Restricted password
sharing
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3 Revenue Model for Netflix
Subscription
▪ 3 Categories- Basic, Standard and Premium
▪ Subscription revenue 2021 - 3.2 billion
▪ 38% increasing since 2020 when they made 2.3
billion
▪ Main - Increased internet accessibility in countries
worldwide
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3 Revenue Model for Netflix
Freemium
▪ Selected video at no cost- Acquire new subscribers
easily
▪ Through offering specific videos (Hooked to the
apps)
▪ Contributed to growth of revenue experienced
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3 Revenue Model for Netflix
Retail and Revenue sharing models
▪ Increase customer royalty (Collaboration)
▪ Increased retail revenue (Online shop)
▪ Brand value -> Long term profits for Netflix
▪ The implementation of the improvement strategies
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Suggestion Approaches to Overcome the Barriers
▪ Offer incentives to the workers
▪ Effective communication channels
▪ Teamwork should be encouraged
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Presented By
Chew Chee Hong
0206015
Lee Wei Seng
0205588
Thitinun Lekkla
0206114
Tan Khuan Wei
0206802
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