Running Head: NETFLIX BRAND AUDIT 1

Brand Audit
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Table of Contents

Introduction
History of Netflix
Mission & Vision Statement
Mission Statement Analysis
Vision Statement Analysis
Target customers
Company Analysis
SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
Web Analytics
Social Data
Sales Data
Customer survey
Competitor Analysis
Amazon Prime Video
YouTube
Hulu and Others
Conclusion
Recommendations
References
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Introduction

Netflix has become a staple of today’s entertainment culture and is the largest and leading

video streaming on demand service in the world. But before Netflix saw the potential of

streaming technology, the company encountered difficulty in maintain a sustainable, cash-flow-

positive business. It wasn’t until 2007 that Netflix transition from a DVD-by-mail service to a

subscription video-on-demand model. Sense this transition, annual revenue has grown from 1.35

billion to around 15.8 billion in just 10 years (Fuller, 2019). Following this trend Netflix gained

over 120 million subscribers from 2011 to 2019.

Although Netflix is now amongst the world’s leading entertainment providers, the United

States accounts for majority of its market with over 60 million paid streaming subscribers. As of

December 2018, 60 percent of U.S. based adults had a current Netflix subscription, and around

77 percent of all video-on-demand users subscribe to Netflix (Fuller, 2019). Netflix not only

generates a vast following but loyal one, with 59 percent of young users rating it as their most

indispensable TV network. Despite that, Netflix’s biggest competitors Hulu and Amazon Prime

Video have also carved out a significant place in the market. But far fewer people ranked

Amazon Prime Video and Hulu essential video services than Netflix.

One noticeable difference Netflix has over its competitors is its massive wealth of original

content. The company produced over 300 original content titles in 2017, some of which were key

to the company’s continued success. Over a third of users state that original programs are the

most enjoyed content on the entire Netflix platform, and over 60 percent of subscribers state that

original shows are either very important or absolutely critical when it come to their decision to

use Netflix. In 2018, Netflix was the joint-highest rated TV network in the United States, with
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around 77 percent of Netflix respondents reported positive opinions about the service (Fuller,

2019).

Netflix has proven its ability to adapt to changing technologies and consumer demands

and continues to succeed in the market through its original content and increased focus on

providing content around the world. While Netflix attempt to hold ts leading title the company

must continually re-evaluate their strategy in order to realize sustained success. This report

examines strategic challenges facing the streaming success and proposes recommendations that

will enable them to achieve their key objectives.

History of Netflix

From a brick-and-mortar, to DVD shipping services, to online streaming service, the

current industry has transformed rapidly over the last several decades. Through the years Netflix

has managed to maintain a consistent and clear brand position. Though its brand experience has

evolved with technology and mediums for delivering content, the foundation for the brand is

virtually unchanged.

Netflix was founded in 1997 and established its first website in 1998 where customers

could spend $4 on a DVD and have it arrive eight days later. Only a year later Netflix created a

subscription model of unlimited DVD movie rentals for a monthly subscription. With a bit more

understanding of consumer needs and wants, in 2004 Netflix decided they wanted to add

emotion to their website by adding photos of people in their living room enjoying a movie to

show a sense of emotion.

From the start, Netflix competed with Blockbuster which at the time was the go-to

method for renting movies. In 2006, Netflix eliminated late fees – which solved a problem for
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many customers who rented movies the old-fashioned way. In 2007, Netflix ventured into

streaming video content to subscribers through mobile devices, video gaming consoles and video

devices such as Roku. Virtually changing Netflix’s business model and started to change how

they positioned DVD delivery in addition to streaming content.

As of 2012, Netflix shifted their message to focus entirely on streaming services. In

addition to offering streamline featured films, television series and documentaries from content

producers, Netflix offers original television content, feature films and documentaries, all without

commercials, to subscribers for a monthly membership fee; allowing member to watch as much

content as they wish on a variety of Internet-connected devices. Although DVD delivery is still

available, Netflix does not consider it a part of their primary brand presentation. Netflix has

discovered that no amount of content can compare to a simple message and product expression

that connects with its users.

Mission and Vision Statement

Netflix Inc.’s mission and vision statement target the entertainment market. Netflix’s

strategic management uses the corporate vision statement to inform organizational development

direction, and the corporate mission statement to guide higher performance achievement (Rivera,

2019). These corporate statements keep the business open to diversification into other markets,

ultimately pointing to higher growth and expansion.

Mission Statement Analysis

One of the core strategies of Netflix Inc. is to increase the subscription number of videos

globally and internationally. Netflix Inc.’s corporate mission is “To entertain the world”

(Rivera, 2019). The statement emphasizes the company’s operations in the entertainment
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industry through expansion while also enhancing customer expectations and preferences about

the media they access. Netflix’s mission statement focuses on entertainment on a worldwide

scale. Considering the term “entertainment,” meaning movies, series, performance art, stage

plays, and others, might be too broad of a statement in specifying Netflix’s operations, although

it does indicates a possible strategic plan of diversifying the business. Which can be incorporated

with its goal to entertain on a worldwide scale by provided online services to diverse audiences

and markets.

Vision Statement Analysis

Netflix Inc.’s corporate vision is “To continue being one of the leading firms of the

internet entertainment era” (Rivera, 2019). Indicating that the company had achieved this

corporate vision once before, business aims to maintain its leadership and operational

effectiveness, while also gaining memberships to satisfy the corporate vision’s objectives.

Target Market

Netflix appeals to a wide audience through its large content spanning multiple genres and

a diverse catalogue of TV shows, movies and documentaries. Subscribers of Netflix come from

diverse ethnic backgrounds - data shows that there are more Hispanic and African American

users than Whites. With that being said, Netflix considers diversity very important. Netflix

featured five times the number of LGBTQ characters in its TV series compared to its competitor

Hulu in the 2018-19 season and gone to the extent of openly publishing data on the gender

distribution of its employees. Netflix appeals to all ages and survey showed adults ages 18-54 are

the majority of its subscribers.

Customer Survey

Morgan Stanley conducted a survey online with a sample size of 3,041 adults aged 18-

plus, with 46% of the sample being men and 54% women. According to Morgan Stanley’s ninth

annual streaming video survey about 48% of respondents reported using Netflix, up about 210

basis points from the previous year. And all the top reasons for using Netflix were tied to the

subscription video-on-demand pioneer’s content (Farrell, 2019). The results from this survey

reflected Netflix’s efforts to achieve their mission to maintain their leading position in the global

online entertainment industry. Netflix users were more apt to must other streaming service

resulting in about half of its users also using Prime Video. And an increase in Hulu subscribers.

The survey also compared customer’s opinion of Netflix originals from 2014 to 2019 and

showed a significant increase of about 23% suggesting Netflix as their top destination for

originals. Addressing a more pressing matter, Netflix raised its price in January and based on the

survey users were not pleased with this decision, making price sensitivity a becoming factor

among older nonsubscribers. And for the last category Morgan Stanley included an age bracket

that skew was significant enough to suggest that 73% of Netflix users were 18-34 and 44% used

Amazon Prime Video, compared to just 25% of people aged 65 or older subscribing to Netflix

and 23% of that group using Amazon Prime Video. While there are some variations in the

statistics over the years the one thing that appeared to remain consistent– around 45% said they

were “very satisfied” with their pay TV service.

Web Analytics

Netflix’s brand was built on providing this one core service in a straightforward way.

Through surveys by Siegel+Gale, a global brand strategy firm and iModerate data, research
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suggests that consumers think Netflix is the simplest, or most easily understood and used

brand/service, in the world and will ultimately replace other entertainment options.

Netflix uses a very web-based approach to advertising, sales, and corporate business.

Netflix relies on its user’s ability to navigate their platform, and having a very user-friendly

experience for the success of the company.

Nevertheless, Netflix’s well-designed customer-facing website homepage is simple and

has clear calls to action for specific actions. With very few options, users can log in, start a free

trial, or learn more about the entertainment offerings provided, and the platforms they are

accessible on.

On a corporate level, Netflix offers more information that is extensive and

comprehensive. On its corporate page, Netflix steers away from sales and takes a more fact

based approach, looking to give users results. Consistent with its design throughout excluding its

ethical and financial reports section. Due to Netflix’s platform and customer demographics they

must rely on excellent customer service and transparency. So Netflix’s has provided their ethical

standards in a very clear language and supports them with their social media interactions and

customer help.

Social Media Presence

“Netflix and chill’ have now become an inescapable part of pop culture, at least among

the binge-watchers. Social media has fueled the popularity of the online streaming company.

Their success can be credited to the brand’s online marketing strategies and innovative

campaigns like the viral ‘smart socks’ campaign. The brand has an active presence on social

channels like Facebook, Twitter, Pinterest, YouTube, and Instagram” (Unmetric. 2019).
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Netflix uses a sense of humor on its media platforms which makes them very likeable and

follow-able. It also proves how well they know their audience. You need to know people you

talk to very well in order to make them laugh with your words.

With Netflix humor approach they have gained 81 million subscribers, more than 23

million Fans on Facebook, 2.03 million followers of the Netflix US Twitter account, and 1.7

million enthusiasts on Instagram Netflix US account (Letki, 2017). In addition to actively

engaging with its audience on social media, Netflix also reaches out to its customers through

email and push notifications. By promoting their offering on the same devices on which users

watch their content, Netflix ensures their next branded experience is moments away.

Sales Data

Statistics show the revenue from Netflix amounted to around 15.79 billion U.S. dollars in

2018, having grown from 1.36 billion U.S. dollars a decade ago. The American media

company’s net income in 2018 stood at 1.21 billion U.S. dollars, with a total of 7,100 employees

working at the company worldwide. (Fuller, 2019)

Competitor Analysis

Amazon, YouTube Premium, Hulu, and HBO are the main competitor of Netflix.

Besides, these direct competitors Netflix will also have to fight the local demand video providers

like ISPs, TV channels and piracy.

Currently every provider has the same mode of revenue i.e. direct consumer subscription

(either monthly or annually) and cost, varying from $8-$14. So, there is not much of cost

differentiation across the providers.

The companies will have to offer popular content to keep and attract the users. So, there

is fierce competition among the companies to either get the popular licensed content from the

media companies or create their own content. By making a few tweaks such as communicating a

stronger benefit, offering more original programming and building friendlier interfaces

competitors could threaten its dominance in the market.

Amazon Prime

With over 100 million users Amazon Prime has become a strong challenger to Netflix.

Amazon has even shifted towards making their own content and even the local content for

specific markets. Amazon has an international strategy but is only present in 12 countries. But

Amazon uses their existing capabilities to offer other services along with Prime for the same

price. While generating new content is becoming costlier for Netflix, Amazons deep pockets

gain them a major advantage over Netflix and possibly a real threat to the future success of

Netflix.

YouTube

YouTube does not intend to compete in terms of spending with Netflix and Amazon for

content creation, after it failed to gain tractions from its subscription based service. But it does

have the capability of becoming a niche competitor in the video streaming space as it is more

geared toward music streaming services.

Hulu and Others.

Recommendations
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Conclusion

The video streaming industry is in a growth phase. So, there will be more players

globally and some local players will deploy more resources to make their services more

differentiated.

References

Farrell, M. (2019, April 22). Survey: Netflix Still Tops Among Streamers. Retrieved November 20, 2019,

from https://www.multichannel.com/news/survey-netflix-still-tops-among-streamers.

Fuller, S. (2019). Topic: Netflix. Retrieved November 20, 2019, from

https://www.statista.com/topics/842/netflix/.
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Letki, G. (2017, April 5). How Netflix is Winning Social Media - Case Study. Retrieved November 20, 2019,

from https://brand24.com/blog/how-netflix-is-winning-social-media-case-study/.

Rivera, A. (2019, November 10). Netflix's Mission Statement & Vision Statement: A Strategic Analysis.

Retrieved November 20, 2019, from https://www.rancord.org/netflix-corporate-vision-

statement-mission-statement-strategic-analysis.

Unmetric. (2019). Social Media Analytics & Intelligence Dashboard by Unmetric. Retrieved November

20, 2019, from https://unmetric.com/brands/netflix.

Website Analysis - NFLX. (2019). Retrieved November 20, 2019, from

https://sites.google.com/a/email.vccs.edu/netflix/home/information.