About Business: Our company primary business is a streaming video on demand service and over the top content streaming direct to consumer devices. The firm primarily generates revenue from subscriptions to its eponymous service. Company delivers original and third-party digital video content to PCs, internet-connected TVs, and consumer electronic devices, including tablets, video game consoles, Apple TV, Roku, and Chromecast. Netflix is the largest SVOD platform in the world with over 220 million subscribers globally. About OTT: "Over-the-top" or "OTT" is an abbreviation for the term "over-the-top," which describes the transmission of movie and television material over the internet without the requirement for a typical cable or satellite subscription. Due to their more practical and cheap nature, OTT services like Netflix, Hulu, and Amazon Prime Video are growing in popularity. OTT platforms also deliver a wider range of material than conventional cable or satellite providers. As a result, an increasing number of individuals are abandoning traditional cables and DTH in favour of OTT, hence boosting the worldwide OTT market. This transition is primarily due to OTT, which provides a far more adaptable and reasonable way to consume TV. Customers who use a standard pay-TV service are often bound by a lengthy contract and exorbitant monthly costs. OTT services, in comparison, are far less expensive and often allow consumers to cancel at any time. Additionally, consumers may enjoy their favourite show without having to endure annoying advertisements. This encourages customers to move to OTT even more. An OTT content platform, such as Netflix or Hulu, makes premium material and a superior viewing experience available through OTT streaming, which does not require a cable TV subscription from the viewer. OTT material can be watched on a variety of devices thanks to this format. There are numerous ways to access OTT services, including via a computer, phone, tablet, smart TV, or game console. There is no requirement for a TV service provider subscription, however the OTT platform itself may require a subscription. This is true for services like Netflix and Disney+, where customers may subscribe on a monthly or annual basis and access curated content at any time. Some OTT platforms, such as Amazon and Peacock, do not charge subscription fees to users; instead, they make money by presenting advertisements to viewers while they are watching content or by providing cheaper subscriptions with less advertisements. According to the report, the APAC area will generate 50% of its revenue from subscription video on demand (SVoD), 37% from user-generated advertising-based video on demand (AVoD), and 13% from premium AVoD by the end of 2022. Platforms with large daily user bases and revenue derived from advertising include TikTok, Facebook Watch, YouTube, Instagram, and Vimeo as examples of AVoD used internationally. With SVOD, customers can access a whole library of media for a single fee, usually billed monthly like Netflix or Amazon. Deloitte predicts that the OTT market would increase at a CAGR of 20% over the following ten years, bringing in a startling US$13 billion to US$15 billion. The company predicted that Indian subscriber numbers would rise from the current 102 million to 224 million by 2026 at a CAGR of 17% in research from 2022. OTT in Saudi Arabia: The dynamic and quickly expanding entertainment and media (E&M) sector in Saudi Arabia has a significant impact on the nation's culture and economic diversification. In particular, the TV industry is changing, and the over-the-top (OTT) video industry is vibrant and growing as new technologies are developed. Audiovisual content is in unprecedented demand worldwide and has elevated to the status of a revered cultural artefact, in which Saudi Arabia can now take part. The high rates of content consumption, including TV, streaming, video sharing, and gaming; excellent smartphone adoption; powerful social media; quick connectivity; and growing opportunities in advertising, all contribute to the Saudi market's potential for E&M. In spite of the fact that mobile usage and streaming are altering how video is viewed, TV still attracts the bulk of viewers. With the use of digital technology, viewers can mix linear and streaming entertainment while also creating their own. In order for content creators to foresee programming demands, increase viewership, and provide material that will increase audience share domestically, regionally, and worldwide, TV and video players must have a deep understanding of their consumers in order to capture more of this market. On-demand streaming, digital transformation, innovation, data analytics, social media interaction, and digitally connected advertising are all areas that media firms should keep expanding their offerings into. Media players should strengthen their relationships with telecom operators, technology firms, and content producers in order to enable such customer-centric change, while also enhancing their internal capacities to become more creative. Risk: We are expanding our operations globally, scaling our streaming service to efficiently and dependably handle anticipated development in both the number of members and servicerelated features, as well as scaling our capacity to create original programming and introduce games to our service. We are managing and changing our company as our global offering develops to take into account a variety of content offers, consumer habits and practises, particularly those related to e-commerce and streaming video, as well as a variety of legal and regulatory contexts. We are creating technology and using third-party "cloud" computing services as we increase our streaming service. We are expanding our knowledge in a variety of fields, including creative, marketing, legal, financial, licencing, merchandising, and other resources connected to the development and physical production of content, as we increase our content production, which now includes games. Additionally, we might broaden our selection of content in a way that is unpopular with customers. As our business expands, we can encounter operational and integration difficulties as well as potential unforeseen liabilities and reputational issues in relation to business partners we collaborate with or firms we might buy or control. Our business could suffer if we are unable to control the increasing complexity of our operations, which includes managing our corporate culture, systems, and operational procedures linked to our streaming operations, as well as our unique content. In our view, acquiring and keeping members depends on having a good reputation for our service. If customers believe that our material, especially our original programming, is of low quality, offensive, or otherwise uninteresting, it may negatively affect our ability to build and uphold a solid reputation. If government regulators find our content to be controversial or offensive, we may experience direct or indirect retaliation, including being forced to remove the offending material from our service, having our entire service banned, and/or coming under more regulatory scrutiny in all areas of our business and operations. Additionally, we might be the target of boycotts, which would be bad for business. Furthermore, our ability to build and maintain a positive reputation may suffer if our responses to governmental action or our marketing, customer service, and PR initiatives are unsuccessful or receive unfavourable feedback. With more recent markets, we also need to build our reputation among customers, and to the extent that we are unsuccessful in doing so, our business in these more recent markets may suffer. We occasionally buy or invest in companies, content, and technology that help our business. Among other acquisition-related risks, the risks associated with such acquisitions or investments include the challenge of integrating products, operations, and personnel, inheriting liabilities and litigation exposure, failing to realise anticipated benefits and expected synergies, and diverting management's time and attention. We might not be able to manage these risks, and such purchases and investments might have a bad effect on our company. Additionally, we might not reap the rewards of the acquisition to the full degree anticipated if we fail to successfully and on schedule integrate an acquired business or complete an announced acquisition deal. Our quarterly financial results may vary due to acquisitions and investments. These variations, which could have a negative effect on our financial results, could be caused by transaction-related expenditures, charges for removing unnecessary spending, or write-offs of impaired assets reported in conjunction with acquisitions and investments. Streaming material is presently available to our subscribers through a variety of internetconnected devices, including as TVs, digital video players, TV set-top boxes, and mobile devices. In order to make our service accessible through their TV set-top boxes, we have agreements with a number of cable, satellite, and telecommunications operators. Some of these service providers compete directly with us or have investments in rival streaming content providers. In many cases, our agreements also contain clauses that allow the partner to charge customers directly for the Netflix service or to provide additional services or goods in conjunction with the provision of our service. Our service might be negatively impacted if partners or other providers do a better job of matching viewers with the material they want to see, for instance through multi-service discovery interfaces. We want to keep deepening our connections with current partners and, over time, expand our capacity to stream TV shows, documentaries, and feature films to more partners and platforms. Our ability to keep members and expand our business could be negatively impacted if we are unsuccessful in maintaining current and developing new relationships, or if we run into technological, content licencing, regulatory, business, or other obstacles when delivering our streaming content to our members via these devices. Our business could suffer if, upon expiration, a number of our partners do not continue to provide access to our service or are unwilling to do so on terms acceptable to us, which terms may include the level of accessibility and prominence of our service. Our agreements with our partners are typically between one and three years in length. Additionally, devices are produced and sold by organisations other than Netflix, and while these organisations ought to be in charge of the performance of the devices, the relationship between these devices and our service may still cause customers to feel unsatisfied with us, which could lead to legal action against us or have other negative effects on our business. Furthermore, technological advancements that affect our streaming capabilities may necessitate device updates from our partners or may force us to stop supporting the delivery of our service on some legacy devices. Our service and the use and enjoyment of our members may suffer if partners do not update or otherwise adjust their devices, or if we stop supporting certain devices. Our customers can pay for our services in a number of ways, including with credit and debit cards, gift cards, prepaid cards, direct debit, online wallets, direct carrier billing, and prepaid cards. To handle payments, we rely on both our own internal systems and those of outside companies. It is necessary to pay interchange and other fees in order for certain payment methods to be accepted and processed. Additionally, these payment methods may have additional verification requirements. If payment processing fees rise, the payment ecosystem undergoes significant changes, such as a large number of payment cards are issued again, payments are delayed by payment processors, payment rules, regulations, or industry standards are altered, payment partners are lost, or our payment processing systems, partner systems, or payment products—including those we use to update payment information—are disrupted or fail, our revenue may be impacted. In some cases, we use partners like our cable company and other third parties to charge subscribers on our behalf. We would have to switch subscribers or otherwise find alternative means of collecting payments if these third parties were unwilling or unable to continue processing payments on our behalf. This could have a negative impact on member recruitment and retention. Additionally, occasionally we find fraudulent usage of payment methods, which may have an impact on our operational results and, if insufficiently regulated and managed, may harm consumer opinions of our service. Card networks may penalise us, our card approval rate may suffer, and we may be required to meet more stringent card authentication standards if we are unable to keep our fraud and chargeback rates at acceptable levels. The loss of our ability to accept payments via any important payment method would seriously hinder our ability to run our company. The manner in which we now conduct our business could be restricted or otherwise negatively impacted by the adoption or modification of laws or regulations relating to the internet or other aspects of our business. Governments are increasingly attempting to adopt new restrictions or expand existing ones to these services, particularly those relating to tax and broadcast media, as our business and others like it acquire foothold in global marketplaces. For instance, European law gives each member state the authority to levy fees and impose other financial duties on media companies operating outside of their borders. Over time, we may be subject to additional financial and regulatory liabilities from a number of jurisdictions. Additionally, the market for online commerce may continue to expand and evolve, resulting in stricter consumer protection rules, which could place additional responsibilities on us. If we must abide by new rules, laws, or new interpretations of old rules, laws, or laws, this adherence may require us to incur more costs or change our business model. Changes in laws or regulations, such as those affecting net neutrality, that have a negative impact on the development, acceptance, or use of the internet could reduce demand for our service and drive up the cost of doing business. Many nations, particularly the European Union, have put in place legislation to stop network operators from discriminating against the legitimate traffic that passes through their networks. The legislation can be new or nonexistent in other places. Favorable legislation may also be amended, as happened, for instance, in the United States when net neutrality rules were removed. We might encounter discriminatory or anti-competitive practises that could obstruct our growth, force us to incur additional costs, or otherwise have a negative impact on our business due to the uncertainty surrounding these rules, including changing interpretations, amendments, or repeal, as well as the potential for significant political and economic power of local network operators. References ENDAVO, 2022. What is OTT?. [Online] Available at: https://www.endavomedia.com/what-isott/#:~:text=OTT%20is%20a%20direct%2Dto,vast%20array%20of%20today's%20devices. [Accessed 5 November 2022]. Fox, J., 2022. India’s OTT Media Services Industry: Rapid Growth Amid Competition for Market Share. [Online] Available at: https://www.india-briefing.com/news/indias-ott-media-services-industry-rapid-growthamid-competition-for-market-share26375.html/#:~:text=Over%2Dthe%2Dtop%20(OTT,sports%20to%20movies%20and%20entertainme nt. [Accessed 10 November 2022]. Strategy&, 2022. Saudi Arabia’s dynamic television and video market. [Online] Available at: https://www.strategyand.pwc.com/m1/en/strategic-foresight/sectorstrategies/media/television-and-video-market.html [Accessed 5 November 2022].
