R.Hedrick+Strategy+Report

Hedrick R.

To: Proximity Team From: Robert Hedrick Date: Feb 22, 2010 Subject: Netflix Strategy Report

This strategy report will investigate the video streaming company called Netflix. "Established in 1997 and headquartered in Los Gatos, California, it has amassed a collection of 100,000 titles and approximately 10 million subscribers" (Wikipedia). The company has over 100,000 titles with approximately 55 million discs and ships 2 million discs to its customers daily (Wikipedia). Netflix does not have a great deal of competition in this market. Other companies who offer similar services, such as Hulu and YouTube, do not offer the quality and selection of Netflix. There is also a strong possibility that these companies may have to begin charging for their services.


 * Description: **

Netflix is the world's leading service to streaming videos and television episodes as well as the leading company for movie rentals by sending the DVDs by mail to each subscriber. Currently, the company has a subscriber base of over 12 million customers with a cast selection of both movies and TV. series. The company also allows for its subscribers the ability to stream certain movies and television series onto their TV. through other devices such as xbox360, ps3, as well as blu ray players made by Samsung, LG, and Insignia (netflix.com).

Netflix has the advantage over movie rentals in that there are no late fees, which allows the subscriber to keep the movie for as long as he or she wants, and send it back when they are done with it. Netflix is also relatively cheap, with plans starting as low as 8.99$ a month which includes one movie at a time with unlimited streaming movies.


 * Competitive Landscape: **

Being that Netflix leads the market; the primary driving force of the company is the fact that customers can get similar services for free from companies such as Hulu and YouTube. However, this slight competition has the possibility to be even weakened with the fact that these competitors might have to start charging their users for the services that they now receive for free.

Netflix also competes with video rental companies, the largest of which being Blockbuster. However, once again this competition is devalued due to the fact that Blockbusters value continues t o decline while Netflix's value has been steadily increasing (Google Finance).


 * Netflix Strategy: **

Netflix continues to offer a relatively large selection of subscription plans, with no due dates, late fees, or shipping fees and no pay-per-view fees. Subscribers can select from an extensive library of titles that can be watched and a wide range of titles on DVD. Daily, Netflix ships almost two million discs from the Company’s distribution centers across the United States (Google Finance).


 * Gen Y Implications: **

Netflix is a strong co m pany that greatly appeals to Gen Y and the life style that they lead. Every service that the company provides is highly valued by Gen Y and therefore ensures the bright future of the company. With the low cost, availability of the streaming services, and the fast and easy mailing service, Gen Y will continue to use Netflix in the future over other companies and services.

Netflix, Inc. 2010. Retrieved on Feb 25, 2010 from [|**http://www.netflix.com/MediaCenter**] Wikipedia.Feb 23, 2010. Netflix. Retrieved on Feb 25, 2010 from [|**http://en.wikipedia.org/wiki/Netflix**] Google Finance. 2010. Netflix. Retrieved on Feb 25 2010 from [|**http://www.google.com/finance?q=netflix**]
 * References: **