Introduction
to Netflix Business case study
7 september 1927 Inside
San Francisco City, America The world's
first black and white electric television is powered After which many technological advances took
place. We Shifted From Black And White
TV To Colored TV Then digital TV, and
doing so, we are using Smart TV today. The
irony is, that today our smart phones have replaced even TVs in the year 2000 when evaluation of yahoo
crossed 125 billion $ did anyone at that
time thought that that google will one
day swallow yahoo Kodak, at one time
people thought that camera meant Kodak camera
means camera with reel But in today's
date there is neither reel camera And
nor is the name of Kodak anywhere netflix
.
The Back
Story of Reed Hastings
The company that once ruled Ott's world Today that company has lost 2 lakh subscribers in
just 3 months. What mistake did nextflix
do that today people are running away from that company Today Netflix is ​​spreading badly Neither new people want to subscribe to
netflix And those who are already
sitting subscribed They are also leaving
the platform .
Entrepreneurial
Journey of Reed Hastings
The company that gave birth to Ott, people are not even
asking that company today. but why is it
so? After all what is the fault of
netflix? most importantly, what are the
powerful business lessons Learn from
this case study and implement it on your business this blog
is brought to you by jar which we will
talk about next.
How
Netflix was Started?
So this story starts in 1997, when Rational Software acquires a corporation
called Atria for $700 million Which was
the biggest acquisition of that time in
the year 1991, Reed Hastings, along with Raymond pak and Mark Bauks Starting a Pure software company Reed became the CEO and Mark became the
Marketing Vice President of the company.
And by the year 1996, Atria acquires the entire Pure software company. Due to which Reed Hastings gets $2.5 million There are a lot of stories about Netflix's
early ideas But no one knows which of
them is the truth. Reed Hastings says
that he once rented a movie called Apollo 13 from Blockbuster but due to late return 6 weeks He was fined $40
The Idea
behind Netflix Business
That time when he was returning from Gym, he got the idea of
​​Netflix. that they should start a
subscription based movie rental website Where
people send their DVD's requirements And
get those DVD's delivered to their home But
the co-founder of Netflix calls the story a marketing gimmick. He says that when he was returning from
Antria's office, he got the idea of netflix.
This thing can also be true because Mark, before working in the pure
software company Has been the Co-founder
of a company called Micro Warehouse that
used to sell branded pc products That's
why he was also made the CEO of Netflix in the early days.
How
Companies Use Marketing Strategies to Trick You
Because he had a good knowledge of marketing and online mail
order servicing. But even then this
world only believes in the story told by Reed Hastings Because within the year 2003 Mark had left the Netflix company Pseudo inspiring story There are stories of global marketing that
big companies sell us So that we can
connect more with these companies Google,
Amazon and Apple, and do not know how many companies of United States started from a garage Which is also true, but people portray it in
this way specially motivational speakers
and people from mlm That's why all these
companies started from the garage because
Because the founders of all these were very poor which is not at all true Most of us do not even know that more and
more middle class people in America is
designed in this way where there is a
wooden house Has a garage and a nice
garden The reality is that all these
founders Didn't come from very poor
family just had to start small So they started from there garage, and most
importantly. Indian and American middle
class people, there is a difference of land and sky In the United States, if your idea is
thoroughly tested, you get access to funding
Truth
Behind Netflix Business
Which Is Not In India And This Marketing Game Is Called Sudo
Inspiring Story Many people in India
portray the story of Netflix in this way
What fine was imposed on a person and he created a company worth $170
billion And interestingly you can do
this work too, come-on, you can do it, but
No one tells that Reed Hasting is already a computer scientist and he was a very strong mathematisation And along with this he was also the founder
of a million dollar company. And he
already had $2.5 million when he started Netflix
Pseudo
Marketing Strategy
Which is very good money according to 1997 same goes for elon musk People say that they work 8200 hours And to save that time, he only sleeps in his
office. But no one ever asks such a
question that if so, then So he have
time to make new girlfriends, where does it come from? There is a very high chance that the stories
these companies sell you those are not
reality 29 august 1997 Reed Hasting starts Netflix company with Mark
Rudolph With 30 employees and 925 DVD's Netflix.com becomes world's first DVD rental
site But do you know that in the early
days of Netflix there was a company that tried to buy Netflix? That company was none other than Amazon Amazon Owner Jeff Bezos Initially Offers $16
Million To Acquire Netflix Mark Rudolph
thinks this idea is very powerful But
Reed Hastings owned 70% of Netflix's stakes
That's why Reed Hastings refused to sell Netflix And this was where the fate of Netflix was
about to change forever. Have you ever
thought that Netflix, Amazon Prime, Zee5, Sony Liv all these platforms Why has it become everyone's choice today? well two reasons no.1 options and no.2 comfort Due to which we do not give up the habit of
these platforms. but, when it comes to
saving money So why don't we take
advantage of such options? we should
take it You probably know that Jar is
one such app. Which help saves whatever
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will be debited from your account And
the spare change of the remaining 3 rupees
it will be automatically invested in Digital Gold using the auto save feature and there is an option of daily savings too where you can set an amount Which will be saved automatically on daily
basis roundoff savings, daily savings or
lumsum gold investing's You can do all
these things through jar app If someone
likes physical gold, then they can also take delivery of it at their doorstep. As soon as their saved amount reaches above
0.5 grams You get a spin on every single
transaction And you can also win the
chance of doubling your amount on your last .
transaction with the help of spin wheel.
We ignore such small savings on daily basis but If These Savings Are Done Consistently On
Daily Basis So neither can we save a lot
of money at one time. But you can grow
it too So you too save your money on Jar
App Whose link I have given for
description and comment box for all of you
and yes if you use my code Aditya
So you will also get 50 rupees gold for free Before 2000, Netflix used to work on DVD
rental services That is, you get the
DVD, watch the DVD, then return it via mail.
How
Netflix Destroyed Blockbuster’s Business Monopoly
But since 1997, Netflix was getting a lot of competition
from blockbusters. Blockbuster Was an
Existing Player with 3.91 billion $ in revenue
and with more than 6000 stores in whole world But there was a major flaw in the revenue model
of blockbusters. Blockbuster's 16%
revenue only Used to come only because
of late fee Because of this, most people
were very upset with the blockbuster Whenever
they took the DVD, they were afraid that if it got delayed by mistake. so it will be late fee And Netflix made this lack of Blockbuster its
biggest strength In 1999, Netflix its
DVD rental service, Shifted over to
subscription model Netflix Offers
Unlimited DVD Rental Services to Its Customers for Just $10 Per Month and that too without any late fee
1st
Business Strategy of Netflix
Infact, Netflix kept its tagline while targeting Blockbuster no late fee
year 2000 .com bubble is bursted The condition of all the companies becomes
very bad. The moment Reed Hastings
agrees to sell Netflix for $50 million But
even at that time the management of Blockbuster was so poor that it didn't understand the power of Netflix and they declined Luckily Netflix survives Until 2001 In the year 2002, Netflix comes out with its
IPO. Through which those people raise 82
million dollars Things could have been a
lot stronger from here but Only one year
after IPO came out Mark Rudolf quits
netflix They used to say to sell the
company in 1998 itself because he never
trusted this company enough To the
director of the indebted blockbusters one
thing was clear that if he wanted to
compete netflix he also have to move on
online dvd rental services too and
finally blockbuster also starts an online dvd rental business Because Blockbusters had a network of more
than 9000 retail stores That's why he
acquired more than 2 million users within 2 years. Blockbuster starts a program in 2006 which was named as total access program In which all the people who are using online
DVD rental services Those people can
give their old DVD and take a new DVD in exchange for it. And that too for free, to increase there
subscribers blockbusters this program
was very successful Due to this plan of
Blockbuster, Netflix lost its 55000 subscribers in the first quarter of 2007. On the other hand, the growth of Blockbuster
was not even taking the name of stopping.
Very few people know that in 2005
Walmart also entered online DVD rentals.
Walmart Used Loss Leading Strategy At That Time He believed that we can offer dvds cheaply by
offering them.
2nd
Business Strategy of Netflix
will attract and then earn money by selling their expensive
products to them but unfortunately this
plan of Walmart never worked year 2007
when everything was going to be changed this
year netflix started there online streaming services what was feared happened Netflix Exploded, No One Heard Online
Streaming In Those Days and no one even
heard about it And this masterstroke
from Netflix changed his destiny
Netflix
Tricky Algorithm
Netflix Invested Millions of Dollars in Data Analytics in order to create a powerful algorithm Who refers people to the content of their
choice An algorithm that understands you
better than you to whom you tell what
you like which will recommend you things
of your choice and keeps you on the platform for long In the initial days, the company tapped with
several companies to get the top of Netflix's platform. so that content can be distributed
cost-effectively as quickly as possible And
finally in 2013, Netflix sets up its production house But in the meantime the popularity of Netflix
was skyrocketing. There was someone
somewhere far away whose breathing was becoming difficult. that company was blockbuster at the time when netflix was rocking the
market at that time blockbuster had to
face a loan of 1 billion $ and
unfortunately blockbuster went bankrupt, but
this was an opportunity because netflix didn't have any competitor market was increasing day by day and netflix was simply killing it netflix with its high quality content and
through powerful algorithm reccomendation
won the best online streaming platform for next 14 years and guess what investors were having a rave
party those who invested in netlflix they got 70,000% more returns And now Netflix has become one of the world's
most powerful performing stocks. march
2022, more than 190 countries more than 221.6 million users, where people consume more than 40 languages but now everything is changing with a great
speed and this company has to face a lot
of competition
Fall
of Netflix
In these 6 months, share price of netflix has been reduced
by 370% even in 2007 companies share
price were reduced by 15% when morgan stanley stated that netflix is
facing tough competition and today
netflix has two threats in front of it first
is distribution network in 2007
blockbuster had a very huge content distribution network and the very same network today disney and
hbo has too disney has its personal
production house through which regularly
it delivers a high quality content
but the thing is before launching it to ott platforms it gets released
in theatres this means before coming to
ott disney already books its profit and this is the reason that disney awlays has
more surplus cash than netflix and the
same thing HBO does with the television before
releasing it to ott it recovers the cast
i know what you are thinking, after all these things what threats does
netflix has threat is this that disney
has disney+ and hbo has hbo max through
which they enter in the ott business and gives tought competetion to netflix where all these companies give there
exclusive right to there ott companies now
these companies bring there own ott platforms and gives a sideline to netflix
Why
Netflix is Failing?
due to which now netflix has lack of high quality content Because of which Netflix neither has the
experience to make more movies than this.
nor more in hand cash than these companies and this thing brings us to second threat which is one source if you watch closely, in 2005 through loss
leader stratergy the thing walmart tried
to do with blockbuster and netflix the
same thing amazon prime is doing it with netflix because where prime source of income of
netflix is just subscription fee where
amazon prime doesn't even earn more than its subscription fee where you watch blog in amazon prime account there are highly
chances that you buy your things from there itself and if you have alexa, you use amazon music
to listen songs a very big loophole is
that even if it is amazon prime or netflix
both the services can be used in many devices through one subscription
only but amazon won't be bothered by it because amazon streaming service is only a
grabber which is brings people into its
amazon ecosystem amazon doesn't earn
though amazon prime but it brings you to
its ecosystem and provides other services and earns money so if you are a prime user you'll obviously
purchase from amazon prime to beat the
competition of netflix it has to obviously produce more high quality content but the biggest problem is that it doesn't
have enough cash and as a result share
price of netflix is reducing rapidly and
that day isn't far away when netflix turns into another blockbuster
Business
Lessons from Netflix Business Case Study
and the most important, what are those important powerful
lessons which can be learnt from this
case study and implemented in our business
first, kill or at least renovate the usp to make the company safe in the starting usp of netflix was online dvd
rental service which was further changed
into subscription based model and
finally in 2007 they started an online streaming service due to which till today they are still
dominating the industry but now there is
a big challenge of changing the usp in front of netflix because the time has changed now things are not like before now there is lot of competition in the market second lesson always keep more than one
stream of income from the very starting
netflix is dependent on only one source of income from 2007 to 2019 they have only earned from
subscription but till 2019 there wasn't
much competition in the market but now
there are competitors netflix had much
more time to create different modes of income
so why didn't this company did so
there are highly chances that the downfall reason of this company will
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