david pearl: analysis netflix

NETFLIX CASE STUDY: STARRING DAVID

PEARL!

NETFLIX ! Let me show you some of my “content”…….a trip down memory lane !

NETFLIX VALUE PROPOSITION•CONVENIENCE / USABILITY: 24-7 ACCESS TO CONTENT/RICH

CONTENT + DVD OFFERINGS•OPTIONS/PRICE: A WIDE RANGE OF PLANS TO FIT ALL BUDGETS

AND NEEDS•VALUE CHAIN: DELIVERY OF CONTENT FROM MANY SOURCES

NETFLIX VALUE PROPOSITION•ORIGINAL PROGRAMMING: TV, MOVIES, DOCUMENTARIES.•CUSTOMIZATION: BUILT IN INTELLIGENCE THAT DIRECTS YOU TO

OFFERINGS SIMILAR TO PAST VIEWINGS• FREEDOM: NO COMMITMENT MEMBERSHIP FEES.

IMPLEMENTATION ISSUES•2010: ATTEMPTS TO IMPROVE THE COMPANY'S

RECOMMENDATION ALGORITHM •2011: FAILED: SEPARATE DVD RENTALS INTO “QWIKSTER”•2011: LATIN AMERICA: LOSSES DUE TO OPERATING COSTS•2011: TWO TIERED PRICING: TWO PLANS, PRICE HIKES. LOSS OF

CUSTOMER FAITH

SOME OF THE CHALLENGES NETFLIX FACED AND HOW THEY WERE OVERCOME

• LAUNCHED STREAMING OPTION TO AUGMENT DVD RENTALS• ELIMINATED AND THEN REINSTATED SINGLE SUBSCRIPTION PLAN•SPUN OFF SEPARATE COMPANY FOR DVD THEN ELIMINATED

SOME OF THE CHALLENGES NETFLIX FACED AND HOW THEY WERE OVERCOME

• LOST INVESTOR CONFIDENCE THEN RESTORED IT 2011-2012•NEW CONTENT: STARTED CREATING OWN CONTENT AS OPPOSED

TO LIC—NOW INDUSTRY STANDARD; REV DRIVER; COST SAVER• IMPROVED SELECTION AND RECO ALGORITHM

THINGS NETFLIX DID RIGHT TO DELIVER ON ITS VALUE PROPOSITION

• PRICES: KEPT LOW•ORIGINAL PROGRAMMING: HOUSE OF CARDS, TV, FILM, DOCS•ACCESS: 24/7 VIA STREAMING OR DVD’S

THINGS NETFLIX DID RIGHT TO DELIVER ON ITS VALUE PROPOSITION

•OFFERINGS: INCREASED NUMBER OF OFFERINGS•ALGORITHM: INCREASED INTELLIGENCE OF SITE TO PROVIDE

FUTURE VIEWING CHOICES•VARIETY OF AFFORDABLE PLANS TO FIT ALL LIFESTYLES AND

BUDGETS

THAT’S ALL FOLKS ! THANKS FOR COMING !AND DON’T FORGET THE POPCORN !THANKS FOR COMING ! AND DON’T FORGET THE POPCORN !