CASE ANALYSIS
NETFLIX: LEVERAGING BIG DATA TO PREDICT ENTERTAINMENT HITS
Submitted By:
Niyati Srivastava
Batch 2021-26
B.B.A. LL.B.
PRN: 21010224036
Symbiosis Law School, NOIDA
Symbiosis International (Deemed University), Pune
In
September 2023
Under the guidance of
Dr. Vijay Kumar Pandey (Professor. Academics)
Symbiosis Law School, NOIDA
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INDEX
Serial No. Heading Page Number
1. SWOT Analysis 3
2. Introduction 5
3. Identification 5
4. Analysis and Evaluation 6
5. Recommendations 7
6. Bibliography 8
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SWOT ANALYSIS OF NETFLIX
Netflix is a famous American company founded in 1997. It started by sending DVDs to
people but has now become a big online streaming service. We can watch TV shows,
movies, and documentaries on Netflix if you have an internet connection. Over the years,
Netflix has become one of the most popular streaming services worldwide. They have made
a lot of money, going from $1.36 billion to almost $26 billion in just 13 years. Even though
they have had some recent losses, they still have many customers. Now, a SWOT analysis is
like a tool that helps a business plan its future. A SWOT analysis helps Netflix figure out what
they are good at, what they need to work on, what chances they have to grow, and what
could harm them. It is a way to make smart plans for the future.
STRENGTHS
Certainly, here are the advantages that have contributed to Netflix's success:
1. Original Content Creation - Netflix has made substantial investments in producing its
exclusive content. This strategic move has not only differentiated the company from
its streaming competitors but also positioned it favourably in a highly competitive
market.
2. Global Presence - With a presence in over 190 countries, Netflix enjoys a vast
audience and substantial revenue potential. Furthermore, its global footprint has
enabled the platform to diversify its content library and attract talent from around
the world.
3. Cutting-Edge Technology - Netflix has allocated resources to develop cutting-edge
technologies that elevate the user experience. Notably, their adaptive streaming
technology, which adjusts video quality based on the viewer's internet speed, stands
out as an industry-leading innovation.
4. Established Brand Identity - Netflix has cultivated a robust brand identity associated
with exceptional content and a commitment to innovation. This deliberate branding
strategy has been instrumental in fostering customer loyalty and attracting new
subscribers.
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WEAKNESSES
There are certain flaws in Netflix's business model:
1. Dependence on Licensing Agreements - Netflix still heavily relies on licensing
agreements with studios and networks, despite its increasing focus on original
content creation. This reliance poses a risk of content loss should these licenses not
be renewed or if studios opt to discontinue specific content genres.
2. Elevated Production Expenditures - Netflix has committed substantial financial
resources, amounting to billions of dollars, to develop and produce original
programming. The substantial costs associated with creating exclusive content can
potentially challenge the company's ability to maintain profitability.
3. Subscription-Centric Model - Netflix's revenue model primarily hinges on
subscription-based income. Consequently, sustaining revenue growth requires a
continuous influx of new subscribers. Given the intensifying competition within the
streaming industry and the proliferation of alternative services from rival providers,
sustaining this growth trajectory may pose considerable challenges.
OPPORTUNITIES
Opportunities available for Netflix to sustain its expansion and success:
1. Global Expansion - While already present in over 190 countries, Netflix still
possesses untapped growth potential in select regions. Expanding its footprint
worldwide remains an opportunity for Netflix to access new markets and
increase its user base.
2. Strategic Partnerships - To enhance the value proposition for its subscribers,
Netflix can explore collaborative ventures with other entities. For instance, it
could establish agreements with internet service providers to offer bundled
packages comprising both internet access and Netflix subscriptions.
3. Merchandising Ventures - Leveraging its substantial and dedicated fan base,
Netflix has the opportunity to capitalize on this loyalty by venturing into
merchandise sales related to its critically acclaimed shows and movies. This can
encompass a range of products, including apparel, toys, and other items of
interest to enthusiasts.
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THREATS
Potential threats to Netflix's expansion and success:
1. Intensified Competition - The proliferation of streaming services such as Amazon
Prime Video, Disney+, HBO Max, and Apple TV+ has led to heightened
competition for both subscribers and viewers' attention. As a consequence,
Netflix may encounter difficulties in attracting fresh subscribers and retaining
existing ones, particularly in the event of a successful subscription base.
2. Online Copyright Infringement - The prevalence of online piracy presents a
significant challenge to Netflix's business model, as it allows viewers to illicitly
access copyrighted content without charge. This illicit practice can result in
financial losses for both Netflix and its subscribers.
3. Government Regulation - The streaming industry is under increasing
government scrutiny. Netflix's business in certain countries may be affected by
changes in regulations such as tax laws or content restrictions.
INTRODUCTION
During the pandemic shutdown, cinemas and other entertainment venues were forced to
close, increasing the popularity of streaming services. According to the research, Netflix still
had a market for online entertainment options throughout the outbreak, with the typical
user spending 1 hour and 11 minutes a day on the streaming platform. Currently, there are
208 million paid Netflix users worldwide, including 74 million in the United States. As a
result, Netflix is an ideal candidate for success in streaming research.
Netflix's success as a company can be attributed to the evolution of its business model,
which first sold regular rental DVDs before moving into streaming services. In 2007, the
company distributed one billion DVDs over the digital network, and after launching video-
on-demand, the company radically changed its economic strategy. Netflix's marketing
strategy is modern, leveraging social media extensively, running multiple promotional
messages, amassing a pending audience before broadcasting, and developing a dialogue
with viewers.
Through its social media sites, Netflix has implemented viral social media campaigns to
dramatically increase viewer engagement and help the company build strong bonds with its
audience. Netflix has its own problems. At a time when the streaming service has gone
global, Netflix's international expansion is limited by the cultural, historical, political, and
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social contexts of various countries. As a result, Netflix content can sometimes be
unacceptable, as in the case of China monitoring the content market, preventing Netflix
from entering the market.
This article examines the factors that contribute to Netflix's success by examining marketing
tactics, technological advancements, and evolving factors associated with globalization.
IDENTIFICATION
Netflix has worked hard to make its video streaming more secure by using HTTPS
encryption, which helps protect viewers' privacy. However, even with this improvement,
they found that it is still possible to figure out what Netflix videos someone is watching with
just a little bit of extra equipment. They made a system that can identify Netflix videos by
looking at certain information in the way the data is sent. They used a big database with
information about 42,027 Netflix videos to test their system, and it worked really well. It
could tell which video you were watching with very high accuracy, almost 100%. When they
tested it with 200 random 20-minute video streams, it could figure out the video in about
two and a half minutes most of the time.
ANALYSIS AND EVALUATION
Even though Netflix started in 1997, research about the company didn't really begin until
2008. Figure 1 shows that from 2008 to 2014, there wasn't much detailed analysis, and
there were only occasional research articles about Netflix. In 2015, things changed because
of the success of "House of Cards," the first show produced entirely by Netflix. That year,
twelve research papers were published, which was the same as the total from the seven
years before. Another important moment was in 2018 when Netflix expanded globally, and
the number of research papers about the company went up from sixteen in 2017 to forty-
five. Most of the studies about Netflix, around 73%, were published in the years 2018, 2019,
and 2020.
Research on Netflix has increased yearly in the databases.
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Even though there are only a few research papers about Netflix in the field of computer
science, they have a big impact because they get cited a lot. Out of 994 keywords in 210
papers, "Netflix" is responsible for 7% of all the citations. After that, the papers often talk
about things related to communication like "TV," "Media," "Streaming," "Intersectionality,"
and "SVOD." The names of Netflix shows like "Orange Is the New Black" and "13 Reasons
Why" are mentioned a lot, with nine and eight mentions each. This is because many of the
papers in the sample are about communication and focus on discussing Netflix shows and
how they affect people.
Most prevalent search terms for papers on Netflix.
The analysis of research papers shows that a lot of attention (40%) is given to studying the
characters in various groups, with a focus on women (6%) and LGBT individuals (4%). There
is also interest (7%) in examining how suicide is depicted. About a quarter (26%) of the
analysis is centred on Netflix's role in the TV industry, its marketing strategies, and how it
plans to grow.
Out of the 210 papers in the sample, 61% talk about Netflix-produced shows. Interestingly,
very few of them (only 17% out of the 128) look at these shows from a storytelling
perspective. Most of the studies (83%) use qualitative methods, while quantitative research
is more common in fields like psychology and computer science (7%). Interviews were the
least used method (2%). Briefly, researchers are quite interested in characters and social
issues in Netflix shows, but there is not as much focus on how the stories are structured,
and most studies use qualitative methods.
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RECOMMENDATIONS
To expand its catalogue of streaming movies, Netflix must continue to form strong alliances
with other providers. Ideally, the company should partner with multi-channel TV providers
such as HBO and Starz. This will definitely help the business to win and attract more
customers or consumers, which in turn will increase the market share. That way, they can
increase subscribers and reduce revenue. If the company chooses to work with these
additional multi-channel providers, the number of streaming titles can also be increased and
improved. By setting up all these partnerships, members or regular consumers can now
enjoy watching streamable TV episodes, series and movies on their computers and TVs
using Netflix-enabled hardware.
Netflix's transformation from a DVD rental service into a streaming giant and leveraging
social media and user data to expand is crucial. Netflix has successfully used social media
platforms to promote itself through its extensive use of social media, frequent posting, and
close interaction with viewers. Netflix has produced a wide variety of original content that
has helped the company go global and attract a large audience. Challenges such as
globalization and high content costs are still present. Despite the lack of specific
information, this article analyzes the current situation of Netflix and gives ideas for the
future of the streaming industry. It does not provide complete solutions, which provides the
opportunity for further research into global expansion tactics, economic content creation
and market dynamics.
BIBLIOGRAPHY
The information in making the project can be contained from the following sources:
WEBSITES
Admin. (2023, March 13). Netflix SWOT Analysis - The Strategy Story. The Strategy Story
Simplifying Business Strategies.
Netflix : Case Analysis : Recommendations For Netflix | Bartleby. (n.d.).
JOURNAL ARTICLES
Yuan, C. (2023). A Case Study of Netflix’s Marketing Strategy. BCP Business &
Management, 42(issue 3).
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Ramírez, N., a. &. Fernández. (2022). Netflix in Web of Science: a bibliometric approach.
Communication and Society, 35(4), 133–145.
Reed, A., & Kranch, M. (2017, March). Identifying https-protected netflix videos in real-time.
In Proceedings of the Seventh ACM on Conference on Data and Application Security and Privacy (pp.
361-368).
