Netflix: Act 1: David Becomes
Goliath: Crafting Killer Assets for
DVD-by-Mail Dominance
Class Activity: Act 1
• Individually (20 to 30 minutes): Write the answers to the
questions to which you are assigned. Make a PowerPoint, Prezi,
or Google Slides presentation just for your questions.
• Form groups with all 7 class members: Present your answers to
the group. Start with whoever is assigned the Overview and go
from there. Once you have finished presenting, compile your
presentations into a single PPT and email your presentation to
your fellow classmates and cc me (christopher.califf@wwu.edu).
Groups and Responsibilities
• Person 1: Overview of Chapter, Background on
Netflix
• Person 2: The Netflix Brand
• Person 3: Netflix and Scale
• Person 4 and 5: The Big Customer Base
• Person 6 and 7: Leveraging the Data Asset,
Winning Act 1
Person 1:
Overview of Chapter, Background on Netflix
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What is the Act 1 all about? What will we learn in Act 1 that is important?
• Provide a brief overview of the chapter (e.g., takeaways, important terms and
concepts, etc)
• How do the concepts in chapter 2 relate to this chapter?
• Why Study Netflix?
• Why is Netflix a good company to learn about the key takeaways, important terms
and concepts, etc. Could another company have been a better choice?
• Use the Internet to find some important information about Netflix that you think
your fellow classmates need to know
• Example: CEO, Long-term view, Officers, Quarterly Earnings, Stock Information, Company
timeline, management philosophies, company culture, etc.
• What is life like working at Netflix?
• Answer this question: “During his time as CEO of Netflix, Hastings has also served
roles for other firms. What additional managerial roles outside of Netflix has Reed
Hastings accepted? Why might these roles potentially be important for Netflix?”
• Basically, set the stage for the first-half of the chapter
Person 2:
The Netflix Brand
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What is brand? How is it different than advertising?
Does Netflix have a strong brand? Offer evidence demonstrating why
the firm’s brand is or isn’t strong. How is a strong brand built?
Give a summary of the article, The Three Tools Netflix Used to Build
Its World-Class Brand: http://firstround.com/review/the-three-toolsnetflix-used-to-build-its-world-class-brand/
How did Netflix distance itself from the competition in terms of
brand?
How did brand play a role in Blockbuster and Walmart not succeeding
in the DVD-by-mail subscription service?
Use the Internet to find some important information about the Netflix
brand that was not mentioned in the chapter
Resources:
• http://www.adweek.com/news/television/here-s-why-consumers-love-netflixmore-amazon-and-hulu-165547
Person 3: Netflix and Scale
• What is scale?
• In what key ways is Netflix “bigger” than the two major competitors who
tried to enter the DVD-by-mail market? Discuss this in terms of the
distribution network and long tail
• What is long tail? Do customers like the long tail? Why or why not?
• Discuss the Netflix automated distribution centers in terms of scale
• Discuss the meaning behind (1) selection attracts customers, and (2) the
Internet allows large-inventory efficiencies that offline firms can’t match
• How can the internet help expand the scale of Netflix?
• What do YOU think is important to know about Netflix and scale
• Resources:
• http://www.chron.com/news/houston-texas/article/Get-glimpse-of-methodbehind-Netflix-madness-1706580.php#photo-1225129
• http://www.businesscloudnews.com/2015/01/28/netflix-is-upgrading-itscloud-architecture-for-scale/
Person 4 and 5: The Big Customer Base
• What does the Vice President of Netflix mean by, “Anyone can replicate
[our] operations if they wish. It’s not going to be easy. It’s going to take a
lot of time and a lot of money.”
• Discuss the customer base in terms of why WalMart bailed out. When
doing so, use some concepts from chapter 2.
• Provide an overview of the Netflix subscriber and customer base. How do
powerful resources in chapter 2 play a role here? Discuss a few.
• Example: How many subscribers does Netflix have, what are some strategies
for Netflix to attract more customers?
• What do you think are some challenges to growing the Netflix customer
base?
• What do YOU think is important to know about Netflix’s customer base
and them attaining a competitive advantage?
• Resources:
• http://www.forbes.com/sites/laurengensler/2015/01/20/netflix-soars-on-subscribergrowth/
Person 6 and 7: Leveraging the Data Asset
• What is user data? What are some examples of Netflix user data?
• Describe Cinematch and collaborative filtering using examples. How does
Netflix use collaborative filtering? Does this technology work? How so?
• Discuss consumer data in terms of switching costs.
• Could a new competitor match Netflix’s recommendation software? If it
did, would this create a threat to Netflix? Why or why not?
• What is the churn rate? What does it mean for Netflix.
• How has Netflix partnered with movie studios? What role did data play
in such strategic partnerships?
• How does Netflix use data and analytics to drive success?
• Resources:
• http://www.smartdatacollective.com/bernardmarr/312146/big-data-hownetflix-uses-it-drive-business-success
• https://blog.kissmetrics.com/how-netflix-uses-analytics/
When you have finished, SAVE YOUR WORK.
We will continue this activity on Wednesday.