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Netflix Case Study: Marketing Strategy, Product Portfolio and Pricing Strategy

The entertainment industry has changed a lot with time. Earlier, watching a movie in a theater cost a lot, as food and tickets were both enormous expenses. On-demand viewing changed that as the customer base of cinema halls started binge-watching movies and web series at their homes.

In this blog, we will shed some light on Netflix and discuss its marketing and pricing strategies.

Table of Contents

Netflix Overview

Netflix is an American company that offers its customers subscription video-on-demand OTT streaming services. Netflix was launched in 1997 by Reed Hastings and Marc Randolph. Originally, the company provided its customers with DVD rental services. The business offered its customers the option to order more than 900 movies from its DVD rental and sales website. In 1999, the company began offering online subscriptions to their customers, which gave users several other benefits, such as unlimited DVD rentals with no due dates, late fees, shipping fees, etc.

The business began offering video streaming services in 2007. The customer can use it to directly access movies, TV shows, and other content on their devices. Beginning in 2010, the company expanded internationally, offering its services in Canada, Europe, Asia, and other regions. The company decided to start producing content in 2013, and its first production was the political drama House of Cards. As of 2024, the company has a customer base in more than 190 countries, and the corporation is still investing a significant amount of money in producing unique content. 

The COVID-19 pandemic helped the corporation increase its user base because the lockdown caused a record surge in subscriptions. The company’s main office is in Los Gatos, California, USA.  

Marketing Strategies of Netflix

The business uses innovative marketing techniques, with an emphasis on customized campaigns that are driven by customer preferences. Netflix uses sophisticated algorithms that gather information about a user’s past internet activities and use that information to recommend movies or other content specifically tailored to the customer’s preferences, which increases customer engagement.

The business makes significant investments in the production and promotion of content. With various teasers, trailers, and a focused marketing effort, it generates interest in its original content. The company also posts memes and trending content on social media channels to interact with younger people. Netflix uses two approaches to release its content. Firstly, it introduces a binge-watch model, in which it releases all the episodes at once so that users can watch the entire season. Secondly, it releases the episodes on a monthly or weekly basis to generate buzz and prompt discussion on social media. 

The organization also works with a range of influencers and celebrities to promote its platform and content, which helps the business grow its subscriber base. The company routinely notifies its subscribers about new releases through emails and mobile applications. If an existing client leaves the show midway through, they are reminded to finish it. 

Pricing Strategies of Netflix

Over time, the corporation has modified its price strategy and has implemented a range of pricing tactics to fortify its position in the market and broaden its consumer base. The organization offers a tiered subscription plan to serve the needs and interests of each customer. Different subscription plans are available with different video qualities and the number of devices that can use the service simultaneously. For instance, the user can stream the highest video quality on up to four devices with their premium plan. In contrast, a basic plan only allows the user to view content in a lower quality on a single device. 

Additionally, they differentiate their prices based on the worldwide market, charging lower membership costs in developing nations than in developed ones. For instance, they only offer a mobile subscription model in India, where consumers are particularly sensitive to pricing. 

Netflix’s business model of providing content to consumers’ laptops and mobile devices has revolutionized the entertainment sector. Its platforms have integrated cutting-edge processes that provide customized content recommendations. Both Netflix’s original series and other content are available for binge-watching on its platforms. The company, which began as a DVD rental service, has emerged as a leader in the entertainment industry. 

Frequently Asked Questions (FAQs)

Is netflix an indian company.

No, Netflix is a US-based digital content provider company.

Who are Netflix’s main competitors in India?

Netflix’s main competitors in India are Disney Hotstar, Amazon Prime, YouTube, Paramount Plus, Sony LIV, etc.

Who is the CEO of Netflix?

Ted Sarandos and Greg Peters were named co-CEOs of Netflix in 2023. 

Is Netflix listed on the Indian stock exchange?

No, Netflix is not listed on the Indian stock exchange.

How can I buy Netflix shares?

An investor can buy Netflix shares by opening an international trading account with a broker. 

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Mastering Python’s Set Difference: A Game-Changer for Data Wrangling

Reading list

Intoduction to python, variables and data types, oops concepts, conditional statement, looping constructs, data structures, string manipulation, modules, packages and standard libraries, python libraries for data science, reading data files in python, preprocessing, subsetting and modifying pandas dataframes, sorting and aggregating data in pandas, visualizing patterns and trends in data, programming, netflix case study (eda): unveiling data-driven strategies for streaming.

• Introduction

Welcome to our comprehensive data analysis blog that delves deep into the world of Netflix. As one of the leading streaming platforms globally, Netflix has revolutionized how we consume entertainment. With its vast library of movies and TV shows, it offers an abundance of choices for viewers around the world.

Netflix’s Global Reach

Netflix has experienced remarkable growth and expanded its presence to become a dominant force in the streaming industry. Here are some noteworthy statistics that showcase its global impact:

• User Base: By the beginning of the second quarter of 2022, Netflix had amassed approximately 222 million international subscribers, spanning over 190 countries (excluding China, Crimea, North Korea, Russia, and Syria). These impressive figures underline the platform’s widespread acceptance and popularity among viewers worldwide.
• International Expansion: With its availability in over 190 countries, Netflix has successfully established a global presence. The company has made significant efforts to localize its content by offering subtitles and dubbing in various languages, ensuring accessibility to a diverse audience.

In this blog, we embark on an exciting journey to explore the intriguing patterns, trends, and insights hidden within Netflix’s content landscape. Leveraging the power of Python and its data analysis libraries, we dive into the vast collection of Netflix’s offerings to uncover valuable information that sheds light on content additions, duration distributions, genre correlations, and even the most commonly used words in titles and descriptions.

Through detailed code snippets and visualizations, we peel back the layers of Netflix’s content ecosystem to provide a fresh perspective on how the platform has evolved. By analyzing release patterns, seasonal trends, and audience preferences, we aim better to understand the content dynamics within Netflix’s vast universe.

This article was published as a part of the  Data Science Blogathon .

Table of contents

Data preparation, exploratory data analysis, official documentation and resources, frequently asked questions.

The data used in this case study is sourced from Kaggle, a popular platform for data science and machine learning enthusiasts. The dataset, titled “ Netflix Movies and TV Shows ,” is publicly available on Kaggle and provides valuable information about the movies and TV shows on the Netflix streaming platform.

The dataset consists of a tabular format containing various columns that describe the different aspects of each movie or TV show. Here is a table summarizing the columns and their descriptions:

In this section, we will perform data preparation tasks on the Netflix dataset to ensure its cleanliness and suitability for analysis. We will handle missing values and duplicates and perform data type conversions as needed. Let’s dive into the code and explore each step.

Importing Libraries

To begin, we import the necessary libraries for data analysis and visualization. These libraries include pandas , numpy, and matplotlib. pyplot, and seaborn. They provide essential functions and tools to manipulate and visualize the data effectively.

Loading the Dataset

Next, we load the Netflix dataset using the pd.read_csv() function. The dataset is stored in the ‘netflix.csv’ file. Let’s look at the first five records of the dataset to understand its structure.

Descriptive Statistics

It is crucial to understand the dataset’s overall characteristics through descriptive statistics . We can gain insights into the numerical attributes such as count, mean, standard deviation, minimum, maximum, and quartiles.

Concise Summary

To get a concise summary of the dataset, we use the df.info() function. It provides information about the number of non-null values and the data types of each column. This summary helps identify missing values and potential issues with data types.

Handling Missing Values

Missing values can hinder accurate analysis. This dataset explores the missing values in each column using df. isnull().sum(). We aim to identify the columns with missing values and determine the percentage of missing data in each column.

To handle missing values, we employ different strategies for different columns. Let’s go through each step:

Duplicates can distort analysis results, so it’s essential to address them. We identify and remove duplicate records using df.duplicated().sum().

Handling Missing Values in Specific Columns

For the ‘director’ and ‘cast’ columns, we replace missing values with ‘No Data’ to maintain data integrity and avoid any bias in the analysis.

In the ‘country’ column, we fill in missing values with the mode (most frequently occurring value) to ensure consistency and minimize data loss.

For the ‘rating’ column, we fill in missing values based on the ‘type’ of the show. We assign the mode of ‘rating’ for movies and TV shows separately.

For the ‘duration’ column, we fill in missing values based on the ‘type’ of the show. We assign the mode of ‘duration’ for movies and TV shows separately.

Dropping Remaining Missing Values

After handling missing values in specific columns, we drop any remaining rows with missing values to ensure a clean dataset for analysis.

Date Handling

We convert the ‘date_added’ column to datetime format using pd.to_datetime() to enable further analysis based on date-related attributes.

Additional Data Transformations

We extract additional attributes from the ‘date_added’ column to enhance our analysis capabilities. We remove the month and year values to analyze trends based on these temporal aspects.

Data Transformation: Cast, Country, Listed In, and Director

To analyze categorical attributes more effectively, we transform them into separate dataframes, allowing for more leisurely exploration and analysis.

For the ‘cast,’ ‘country,’ ‘listed_in,’ and ‘director’ columns, we split the values based on the comma separator and created separate rows for each value. This transformation enables us to analyze the data at a more granular level.

After completing these data preparation steps, we have a clean and transformed dataset ready for further analysis. These initial data manipulations set the foundation for exploring the Netflix dataset and uncovering insights into the streaming platform’s data-driven strategies.

Distribution of Content Types

To determine the distribution of content in the Netflix library, we can calculate the percentage distribution of content types (movies and TV shows) using the following code:

The pie chart visualization shows that approximately 70% of the content on Netflix consists of film, while the remaining 30% are TV shows. Next, to identify the top 10 countries where Netflix is popular, we can use the following code:

Top 10 Countries Where Netflix is Popular

Next, to identify the top 10 countries where Netflix is popular, we can use the following code:

The bar chart visualization reveals that the United States is the top country where Netflix is popular.

Top 10 Actors by Movie/TV Show Count

To identify the top 10 actors with the highest number of appearances in movies and TV shows, you can use the following code:

The bar chart shows that Anupam Kher has the highest appearances in movies and TV shows.

Top 10 Directors by Movie/TV Show Count

To identify the top 10 directors who have directed the highest number of movies or TV shows, you can use the following code:

The bar chart displays the top 10 directors with the most movies or TV shows. Rajiv Chilaka seems to have directed the most content in the Netflix library.

Top 10 Categories by Movie/TV Show Count

To analyze the distribution of content in different categories, you can use the following code:

The bar chart shows the top 10 categories of movies and TV shows based on their count. “International Movies” is the most dominant category, followed by “Dramas.”

Movies & TV Shows Added Over Time

To analyze the addition of movies and TV shows over time, you can use the following code:

The line chart illustrates the number of movies and TV shows added to Netflix over time. It visually represents the growth and trends in content additions, with separate lines for films and TV shows.

Netflix saw its real growth starting from the year 2015, & we can see it added more Movies than TV Shows over the years.

Also, it is interesting that the content addition dropped in 2020. This could be due to the pandemic situation.

Next, we explore the distribution of content additions across different months. This analysis helps us identify patterns and understand when Netflix introduces new content.

Content Added by Month

To investigate this, we extract the month from the ‘date_added’ column and count the occurrences of each month. Visualizing this data as a bar chart allows us to quickly identify the months with the highest content additions.

The bar chart shows that July and December are the months when Netflix adds the most content to its library. This information can be valuable for viewers who want to anticipate new releases during these months.

Another crucial aspect of Netflix’s content analysis is understanding the distribution of ratings. By examining the count of each rating category, we can determine the most prevalent types of content on the platform.

Distribution of Ratings

We start by calculating the occurrences of each rating category and visualize them using a bar chart. This visualization provides a clear overview of the distribution of ratings.

Upon analyzing the bar chart, we can observe the distribution of ratings on Netflix. It helps us identify the most common rating categories and their relative frequency.

Genre Correlation Heatmap

Genres play a significant role in categorizing and organizing content on Netflix. Analyzing the correlation between genres can reveal interesting relationships between different types of content.

We create a genre data DataFrame to investigate genre correlation and fill it with zeros. By iterating over each row in the original DataFrame, we update the genre data DataFrame based on the listed genres. We then create a correlation matrix using this genre data and visualize it as a heatmap.

The heatmap demonstrates the correlation between different genres. By analyzing the heatmap, we can identify strong positive correlations between specific genres, such as TV Dramas and International TV Shows, Romantic TV Shows, and International TV Shows.

Distribution of Movie Lengths and TV Show Episode Counts

Understanding the Duration of movies and TV shows provides insights into the content’s length and helps viewers plan their watching time. By examining the distribution of movie lengths and TV show durations, we can better understand the content available on Netflix.

To achieve this, we extract the movie lengths, and TV show episode counts from the ‘duration’ column. We then plot histograms and box plots to visualize the distribution of movie lengths and TV show durations.

Analyzing the histograms, we can observe that most movies on Netflix have a duration of around 100 minutes. On the other hand, most TV shows on Netflix have only one season.

Additionally, by examining the box plots, we can see that movies longer than approximately 2.5 hours are considered outliers. For TV shows, finding those with more than four seasons is uncommon.

The Trend of Movie/TV Show Lengths Over the Years

We can plot line charts to understand how movie lengths and TV show episode counts have evolved over the years. Identifying patterns or shifts in content duration by analyzing these trends.

We start by extracting the movie lengths and TV show episode counts from the ‘duration’ column. Then, we create line plots to visualize the changes in movie lengths and TV show episodes over the years.

Analyzing the line charts, we observe exciting patterns. We can see that movie length initially increased until around 1963-1964 and then gradually dropped, stabilizing around an average of 100 minutes. This suggests a shift in audience preferences over time.

Regarding TV show episodes, we have noticed a consistent trend since the early 2000s, where most TV shows on Netflix have one to three seasons. This indicates a preference for shorter series or limited series formats among viewers.

Most Common Words in Titles and Descriptions

Analyzing the most common words used in titles and descriptions can provide insights into the themes and content focus on Netflix. We can generate word clouds to uncover these patterns based on the titles and descriptions of Netflix’s content.

Examining the word cloud for titles, we observe that terms like “Love,” “Girl,” “Man,” “Life,” and “World” are frequently used, indicating the presence of romantic, coming-of-age, and drama genres in Netflix’s content library.

Analyzing the word cloud for descriptions, we notice dominant words such as “life,” “find,” and “family,” suggesting themes of personal journeys, relationships, and family dynamics prevalent in Netflix’s content.

Duration Distribution for Movies and TV Shows

Analyzing the duration distribution for movies and TV shows allows us to understand the typical length of content available on Netflix. We can create box plots to visualize these distributions and identify outliers or standard durations.

Analyzing the movie box plot, we can see that most movies fall within a reasonable duration range, with few outliers exceeding approximately 2.5 hours. This suggests that most movies on Netflix are designed to fit within a standard viewing time.

For TV shows, the box plot reveals that most shows have one to four seasons, with very few outliers having longer durations. This aligns with the earlier trends, indicating that Netflix focuses on shorter series formats.

With the help of this article, we have been able to learn about-

• Quantity: Our analysis revealed that Netflix had added more movies than TV shows, aligning with the expectation that movies dominate their content library.
• Content Addition: July emerged as the month when Netflix adds the most content, closely followed by December, indicating a strategic approach to content release.
• Genre Correlation: Strong positive associations were observed between various genres, such as TV dramas and international TV shows, romantic and international TV shows, and independent movies and dramas. These correlations provide insights into viewer preferences and content interconnections.
• Movie Lengths: The analysis of movie durations indicated a peak around the 1960s, followed by a stabilization around 100 minutes, highlighting a trend in movie lengths over time.
• TV Show Episodes: Most TV shows on Netflix have one season, suggesting a preference for shorter series among viewers.
• Common Themes: Words like love, life, family, and adventure were frequently found in titles and descriptions, capturing recurring themes in Netflix content.
• Rating Distribution: The distribution of ratings over the years offers insights into the evolving content landscape and audience reception.
• Data-Driven Insights: Our data analysis journey showcased the power of data in unraveling the mysteries of Netflix’s content landscape, providing valuable insights for viewers and content creators.
• Continued Relevance: As the streaming industry evolves, understanding these patterns and trends becomes increasingly essential for navigating the dynamic landscape of Netflix and its vast library.
• Happy Streaming: We hope this blog has been an enlightening and entertaining journey into the world of Netflix, and we encourage you to explore the captivating stories within its ever-changing content offerings. Let the data guide your streaming adventures!

Please find below the official links to the libraries used in our analysis. You can refer to these links for more information on the methods and functionalities provided by these libraries:

• Pandas: https://pandas.pydata.org/
• NumPy: https://numpy.org/
• Matplotlib: https://matplotlib.org/
• SciPy: https://scipy.org/
• Seaborn: https://seaborn.pydata.org/

A. Netflix is a data-driven company as it relies on extensive data collection and analysis to make informed decisions about content creation, recommendation algorithms, user experience, and business strategies. Data guides their understanding of user preferences, viewing habits, and market trends to drive innovation and personalized recommendations.

A. The Big Data strategy of Netflix involves leveraging large volumes of data from user interactions, streaming patterns, content metadata, and demographic information. This data is processed, analyzed, and utilized to enhance content discovery, optimize user experience, and inform decision-making across the organization.

A. Netflix employs various methods for data collection, including tracking user interactions on their platform, analyzing streaming data, conducting surveys and experiments, utilizing social media sentiment analysis, and gathering demographic information through user profiles.

A. Netflix’s competitive advantage in big data lies in their ability to harness vast amounts of user data to personalize content recommendations, optimize content production decisions, and create a seamless and tailored user experience. This data-driven approach enables them to deliver highly engaging and relevant content, increasing customer satisfaction and retention.

The media shown in this article is not owned by Analytics Vidhya and is used at the Author’s discretion. 

Hello there! 👋🏻 My name is Swapnil Vishwakarma, and I'm delighted to meet you! 🏄‍♂️

I've had some fantastic experiences in my journey so far! I worked as a Data Science Intern at a start-up called Data Glacier, where I had the opportunity to delve into the fascinating world of data. I also had the chance to be a Python Developer Intern at Infigon Futures, where I honed my programming skills. Additionally, I worked as a research assistant at my college, focusing on exciting applications of Artificial Intelligence. ⚗️👨‍🔬

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Netflix product strategy: A 2020 case study

Gibson Biddle

Previous VP of Product at Netflix.

Table of Contents

Netflix was the world’s largest streaming service in 2020 with over 193 million subscribers and climbing. Software as a service (SaaS) companies took notice and wanted in on the secret sauce to Netflix’s product strategy.  

What was their secret to onboarding new users and customer success?

I’m going to share a few models to help you define your product strategy. Each of these models will be brought to life with a mock 2020 articulation of Netflix's product strategy .

But first, how Netflix started...

Netflix’s product vision began with a simple goal – to get big on DVD. When Netflix started out, they were a DVD rental company, and customers had DVDs delivered to them via postal services. Then, the company’s vision evolved to become a leader in the streaming market. Going digital enabled Netflix to expand worldwide. Having achieved all of the above, Netflix is currently placing a strong focus on original content.

What is a product strategy?

Product strategy is a key part of product-led growth (PLG) . It’s a plan that helps your company establish a specific product vision and how teams work together to successfully achieve it. 

Before we begin to explore Netflix’s product strategy, it’s important to understand why product strategy is so important and necessary. 

Firstly, a strategic product plan helps us to communicate an inspired vision of the future . It’s one thing to have an idea in your head, but you need the right strategies in place to help communicate that vision to others.

Secondly, combining innovation and invention is no easy task. Inventing new solutions and features can be chaotic, and it’s almost impossible to be innovative without any chaos. However, products change, and company decisions cannot happen at random. There must be discipline, and a product development strategy is effective at blending these two forces.

A product development strategy is about forming hypotheses to what I call the DHM model . In other words, you need it to delight customers and do so in a margin-enhancing way. 

Finally, you need a product strategy to help facilitate prioritization . We must prioritize some things over others, and having a strategy in place can help you to do that while also communicating a plan.

As product leaders, we can do anything, but we can’t do everything . 

3 product strategy frameworks 

A product strategy framework is a guiding light for every department in your SaaS company. I want to briefly introduce three models for product strategy because I’ll be sharing (in later sections) how to put each to use in the context of Netflix’s 2020 product strategy. 

Here are three models (or frameworks ) to define your product strategy:

• Get Big, Lead, Expand (GLEe) model is a product strategy model that helps provide a long-term vision. It’s about growing the company to get big in its first 5 to 10 years and then expanding into different chapters of growth later. 
• Grow, Expand, Monetize (GEM) model helps different departments like marketing, finance, and Product teams to align with each other. How do you prioritize growth, expansion, and monetization?
• Delight, Hard to Copy, Monetize (DHM) model is about delighting your users in hard-to-copy ways.  

The purpose of these models includes: 

• Encourage people to think long-term
• Build cross-functional alignment
• Help people to form hypotheses to compete long-term 

Netflix’s DHM product strategy framework

If you’re a product leader, like Netflix in 2020, your main job is to delight customers in hard-to-copy margin-enhancing ways.

So, how did Netflix’s product leaders achieve this?

Netflix uses a DHM framework.

The company offers customers a very convenient service with a wide selection of movies and TV shows they can stream instantly anytime, anywhere. Customers can navigate Netflix’s selection very easily, and they get a lot of value for their money. Plus, Netflix offers customers a range of high-quality and entertaining original content.

How Netflix’s product strategy increases profits

A key part of Netflix’s product strategy is to increase profits so they can reinvest in making an even better product in the future. I refer to this as margin-enhancing and Netflix effectively increases profits in various ways.

Let’s take a closer look at the last point in the graphic above – right-size original content investment . 

Since Netflix wants to offer a wide range of movies and TV shows to suit all types of tastes and preferences, the company likes to invest in original content. However, they want to pay the right amount for this content. 

To do this as accurately as possible, Netflix predicts how many people will watch a certain TV show or movie and then line up the cost of investment with their prediction.

For example, Netflix predicted that 100 million people would watch their original series Stranger Things . Therefore, they were willing to invest $500 million in that series. The series Bojack Horseman was predicted to gain 20 million viewers, so the right-size investment in that show was estimated to be $100 million.

What made Netflix’s 2020 product strategy hard to copy

In 2020, Netflix wasn’t the world’s biggest streaming service for nothing. It was very hard for other companies and streaming services to copy what Netflix did, and that made it difficult for competitors to compete.

Netflix is a trusted brand. You can trust Netflix to keep your details private. Their brand promise is “movie enjoyment made easy,” and they achieve this by providing viewers with personalized service and the freedom to watch on almost any device with an internet connection.

Here’s why Netflix is hard to copy :

• Unique technology
• Network effect 
• Economies of scale

The brand promise of Netflix is movie enjoyment made easy. The company is a movie subscription service that delivers fast, easy entertainment in a friendly, straightforward way. 

Priorities of Netflix's product team

The product team at Netflix prioritizes monthly retention as the company’s high-level engagement metric. The team prioritizes other metrics too, including growth and monetization.

When the COVID pandemic hit in 2020, movie theaters were closed, and more people had free time at home. The company’s product team focused on key high-level product strategies (see below):

Here’s an example of the Netflix 2020 rolling roadmap , which shows how Netflix is implementing each strategy every quarter:

Netflix case studies

Now, let's look at some ways Netflix was able to win their users' attention by offering additional products.

Case Study 1: Netflix Party

Netflix Party (now Teleparty ) is a Chrome extension app that has become increasingly popular since COVID-19. It allows users to watch the same movie at the same time. They can even chat with each other while watching a movie or TV show. 

In an isolated time, such as a lockdown during the pandemic, many people enjoyed using this Chrome extension to watch movies with friends and family long-distance.

But is this an idea that Netflix should execute itself?

In the past, Netflix has tried a few variations of social experiments, including Friends in 2009, Xbox Party Mode in 2010, and Tell a Friend in 2018. All three were killed off because not enough people used the features.

However, Netflix Party has proven to be quite a success. In 2020, the app grew from 500 thousand to one million in just 60 days and acquired 10 million downloads. This data shows a substantial proof of concept, making it a possible worthwhile investment for Netflix. But the question remains – will this delight in hard-to-copy, margin-enhancing ways?

Well, this extension is hard to copy, and it would take competitors years to mimic something of this scale. It has the potential to enhance profits via word-of-mouth and increase retention. 

Case Study 2: Auto-cancel inactive members

Should Netflix auto-cancel inactive members ?

In 2020, one-half percent of Netflix members hadn’t used the service in the last 12 months. However, those members were still paying for the service despite rarely using it.

Some might argue that a better alternative would be to send those members an email notification alerting them to the fact they’ve been inactive for so long. The email could say something like, “Would you like to cancel?” Then, the user could decide whether they wanted to continue paying for the monthly subscription or cancel their membership.

If members say no, then their service will continue as normal. If they say yes, then their membership will be canceled. However, what happens to the members who don’t respond? Should their membership be auto-canceled?

In 2020, if Netflix were to auto-cancel all of the inactive members, the company would lose $100 million. Clearly, introducing the auto-cancel option was not a great way to enhance profits, as the company would be losing millions of dollars each year. But what about the delight and hard-to-copy side of their product strategy?

Offering the auto-cancel feature for inactive users may delight customers since Netflix automatically stops payments. The user could always rejoin if they choose to do so.

Auto canceling inactive Netflix users, in my opinion, would be a worthwhile strategy for Netflix to implement and here’s why:

I think that product teams and product leaders can learn a lot from Netflix’s winning 2020 product strategy, which can help you make more strategic day-to-day decisions and implement product strategies that will help you reach your vision and goals.

If you're finding it tough to nail your product-led strategy and need clearer direction for your SaaS company, you might benefit from expert guidance.

ProductLed Academy helps you and your team focus on the essentials: understanding your market, defining a winning strategy, building key capabilities, and making smart strategic choices.

The coaching program uses a nine-component framework, with building a winning strategy being the first step. This proven approach helps you scale efficiently and profitably.

Ultimately, the program's goal is to put you and your product-led team on the path to become The Obvious Choice — the best and easiest solution in your SaaS industry. Learn more and apply today .

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Table of Contents

Netflix target audience , what are the key principles of netflix marketing, marketing strategy of netflix, digital marketing strategy of netflix, 5 key takeaways from netflix marketing approach, conclusion , a case study on netflix marketing strategy.

Netflix was founded in 1997, offering online movie rentals with less than 1000 titles. Soon, it switched to the subscriber-based model, and in 2000 Netflix introduced a personalized movie recommendation system. By 2005 Netflix had over 4.2 million subscribers and started work on a video recommendation algorithm. And finally, in 2007, Netflix began its streaming services and original content creation. By 2016 Netflix had over 50 million subscribers; the story continues today as it is a worldwide presence in the video-on-demand industry. 

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Netflix marketing strategy is undoubtedly a guide for digital marketers worldwide. It is a learning experience to know how this digital media streaming company outperformed all others in the market. 

Netflix's target market is young, tech-savvy users and anyone with digital connectivity. The audience of Netflix is from diverse age groups and demographics. 

However, most of the audience are teenagers, college-goers, entrepreneurs, working professionals, etc. Netflix aggressively works on content expansion and personalization to expand the user base. They separate the kids' and adults' audiences based on their maturity levels. 

Netflix is a fantastic example of an integrating marketing strategy . It is integrated, agile, and customer-driven to make the maximum impact. Netflix follows a customer-centric model to deliver a seamless experience. The platform follows integrated marketing for effective targeting and makes the best use of content marketing for data analytics. 

• Customer-centricity: Netflix focuses on creating a solid connection with its customers by engaging them personally and personalizing their viewing experience. They also use clever marketing tactics to get people to watch their shows.
• Integrated viewing experience: Multi-device and up-to-date no matter where you view it from, makes the experience combined.
• Innovation: Modern marketers must use data analytics to create experiences that delight consumers. Netflix uses customer data analytics to get content recommendations because it knows which movies its customers like to watch. For example, if a Netflix user likes Rocky, it will also offer them sports documentaries. As you manage your business, you, too, need to use data analytics for effective marketing and website optimization.  

Netflix uses data-driven and customer-centric marketing strategies that work in the digital age. Netflix's success relies on constant analysis and optimization, so you can use these tools for marketing your business online.

Netflix's marketing strategy is a surefire example of innovation and modern-day technology growth. The platform has been eager to bring the changes per market need or user demand. The evolution of the marketing tactics from time to time is one of the core reasons behind its success. 

Netflix proves that a brand can connect with customers easily through regular analysis and optimization. Simply put, Netflix's advertising strategy is full of agility, data-collection, user-centricity, personalization, and dedication. Major and minor brands can follow such a strategy and boost brand exposure and market value. 

Let's walk through 5 effective strategies of Netflix's advertising strategy that led them to the most disruptive business model. 

1. Use Personalized Content

Netflix is an excellent example of how personalized content can improve user satisfaction. Netflix knows what TV shows and movies its users like to watch. It uses this information to create customized recommendations for them. This allows them to find the content they enjoy without searching through many lists. It also ensures that users are always getting the latest and greatest content. This level of personalization is critical for online users because it enhances their experience and makes them more likely to return to a site in the future. 

2. Ensure Multi-mode Experience

Starting with a DVD service, Netflix's journey has been successful because of its multi-device strategy. You can open Netflix on TV, computer, smartphone, and tablet with seamless content continuity being watched. The company shows zero restriction in meeting the customers wherever required. Netflix follows both online and offline promotion strategies to boost user engagement. Be it any medium; their marketing strategy remains aligned wherever it can work. 

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3. Blend Technology With Marketing Tactic

You wouldn't find two Netflix accounts with the same interface or suggestions. The recommendation shows order is as per user activity and ever-changing. They change the artwork frequently to add a sense of newness. Netflix puts modern-day technology to good use. The platform keeps on having new features to gain maximum engagement. Machine learning is a proven technology trend to transform marketing research to the next level. The blend of ML into advertising is what helps Netflix Marketing Strategy. 

4. Target Emails Like Any Other Marketing Channel

It is wrong to say or consider that email marketing is dead. Netflix is one solid example of a company making the most out of email marketing. They are one step ahead and pairing the email campaigns with machine learning systems. It helps gather more user data and preferences—further, the data segments into multiple user groups for precise and effective customer targeting. So, email marketing can introduce Netflix to new users and show relevant recommendations to the old users. One essential tip from Netflix email marketing is to be creative and take risks. Those old boring emails wouldn't help get such an impact as Netflix today. 

5. Create a Buzz With Better Interactions

Netflix has used the best content marketing strategy in the last decade. The company thinks of an out-of-the-box way to grab quick attention from users. They are bringing standalone products and unmatched experiences. On top of everything, the platform has a seamless communication channel to boost momentary awareness and recognition. The platform allows the audience to be involved in the story and make decisions. This unpredictable move is a proven game-changer for revolutionizing future television. The incomparable buzz in the platform keeps the user stuck to binge-watching. The users feel high engagement in the hopes of finding a happy ending. 

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Hence, Netflix happens to be a unique example and inspiration for many fellow companies. They have done a commendable job in content, branding, business model, and product. Netflix marketing strategy has a lot to offer to market enthusiasts and students.

Learn about such integrated marketing strategies with Simplilearn's PGP Digital Marketing Certification Program . You will be taught by Facebook and Purdue University experts, providing a holistic learning experience. Sign-up now and make yourself - job ready! 

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How data drives decision-making at Netflix

Data drives every decision at Netflix, from creative and marketing to its highly successful original content arm

Thea Sokolowski

Director of Marketing at  Outside Insight

Thea Sokolowski holds an MBA from Oxford University's Said Business School and has been uncovering insights in the social and media space for nearly 10 years.

Key Takeaway

Every decision at Netflix, from the color palette used to design program covers, to personalized drip marketing strategies, to upcoming original content, is driven entirely by data insights. Today the streaming giant is worth $140B and is creeping in on competitors across the board.

We all remember the story about House of Cards – the big gamble that launched what would become a new powerhouse at  Netflix : Original Content. The streaming giant purchased 2 full seasons of House of Cards in 2012 – a whopping $100M spend – without seeing a single episode. Instead, they’d looked carefully at data to determine how significant the audience was likely to be.

The company saw  that fans of the original UK House of Cards  also watched movies that starred Kevin Spacey and were directed by David Fincher, one of the show’s executive producers. Combining these elements with a stellar writing and production team created a recipe for success. The show immediately took off, with some indicating they would maintain their Netflix subscription for the sole purpose of watching House of Cards.

Now a major arm of its business, Netflix Original Content is heavily informed not just by its own user data, but by trends the team sees on social media, viewership in competing markets and predictive algorithms that draw correlations between elements of high-performing content – looking at combinations of talent, storylines, themes and directors.

Driven by data

According to Recode, today Netflix  is worth around $140B , following a glowing Q4 earnings report in January that sent the stock soaring 42%. It’s now worth more than McDonald’s and GE, and is creeping in on competitors like Disney and Comcast.

The brand didn’t get here by accident. Every decision made at Netflix is deeply driven by data. According to a presentation by Jeff Magnusson, manager of data platform architecture at Netflix, and engineer Charles Smith, the brand’s data philosophy  encompasses 3 key tenets :

1. Data should be accessible, easy to discover, and easy to process for everyone.

2. whether your dataset is large or small, being able to visualize it makes it easier to explain., 3. the longer you take to find the data, the less valuable it becomes..

The team digs so far into personalized customer data that color breakdowns in cover designs for new original content are determined according to their impact on subscriber viewing habits, recommendations, ratings, and more. Everything is personalized, using their advanced machine learning to offer better recommendations and inform their own upcoming content.

With access to such in-depth data – both from existing customers and from reactions to what competitors are doing in the market – the Netflix team can ask better questions and make informed decisions, without using smaller focus groups and other previous forms of testing during the production stage. Instead they can rely on comprehensive data to inform every decision, large or small.

When they do user testing, the team goes big, often spending millions on a single experiment. According to Megan Imbres, Director/Product Creative at Netflix  at the 4As 2017 Strategy Festival , CEO Reed Hastings encourages experimentation where everyone can learn something. “ If you think about it, all the time and energy you’re spending on testing – all the work that’s going into it with our data scientists – everyone is trying to read something. Something that I take to heart working at Netflix is really being able to take these big, aggressive testing swings in order to get that learning, get that hypothesis, and then taper back.”

Rewriting the blockbuster playbook

Their first big original film,  Bright,  starring Will Smith, cost the company $90M and launched on the platform in December. The purchase of the film concept and subsequent marketing was completely informed by customer data.

Bright  saw 11M viewers in its first 3 days, despite  decidedly poor reviews  from rating sites like Rotten Tomatoes. Ultimately, Netflix was able to rewrite the playbook for blockbuster filmmaking using data.

Netflix began subtly marketing the film to users in March, first categorizing and cataloguing it internally and then using carefully crafted algorithms to display tailored trailers, clips and visuals to individual users over time.

The platform’s internal marketing algorithms allow content like this to have a continual life cycle and reach new viewers over time, as opposed to trying to reach as many as possible on opening weekend as traditional box office premieres must do.

According to The Verge , “The company’s in-house tag phrase for the concept is ‘premiere night is every night.’ For users who don’t know  Bright  exists, its appearance in the browsing interface will be a moment of discovery, whether it’s December 22nd, 2017, or sometime in 2020.”

Data-driven creative marketing

The Netflix team uses external data inputs like social media to inform where to focus marketing spend and attention. Imbres gave an example of the latest Gilmore Girls season that launched in 2016.

Testing the waters with a few tweets, they saw that anything posted about the show immediately took off virally like wildfire, indicating interest was strong. So they tapped into the excitement on this particular content, taking also to offline tactics like recreating the famous Luke’s Diner in select cities, to make the most out of the season’s release.

Their marketing strategy appears to be working. So much so, in fact, that in addition to increasing spend on content creation, Netflix is focusing dollars heavily on marketing.  According to CFO David Wells in Variety , the company plans to increase marketing spending more than 50% in 2018, from $1.3 billion last year to $2 billion this year.

“We used to think every incremental dollar was best spent on content,” but it’s increasing spending on marketing because “we think marketing is a multiplier on the content spend,” Wells said.

According to Wells, the brand is set to spend upwards of $8 billion on content in 2018, with 700 original TV shows and 80 original films set to release globally. At the close of 2017, they had 117.6 million streaming members.

Today, Netflix spends more on content than any other streaming provider, as well as most TV networks. And it’s only just getting started.

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A Case Study on Netflix’s Marketing Strategies & Tactics

As the spread of COVID-19 has affected most industries and economies worldwide, people have been forced to stay contained at home to prevent the spread of coronavirus. People have also been bored to death as they have nothing to do.

In this locked-up scenario, your best partner could be your Netflix account which contains thousands of interesting movies, series, and shows. We were discussing which brand to take up for this week’s case study, and then one of our team members got an idea, let’s take the famous OTT platform Netflix which has managed to entertain a large population in no time.

Today, we are going to discuss the story of a platform that is providing us streaming services, or as we call it video-on-demand available on various platforms- personal computers, iPods, or smartphones. Netflix cut through the competitive clutter and reached out to its targeted audience by curating some interesting  brand communication strategies  over the years.

Let’s get into the success story of Netflix’s Journey.

Netflix was founded on August 29, 1997, in Scotts Valley, California when founders Marc Randolph and Reed Hastings came up with the idea of starting the service of offering online movie rentals. The company began its operations of rental stores with only 30 employees and 925 titles available, which was almost the entire catalog of DVDs in print at the time, through the pay-per-rent model with rates and due dates. Rentals were around $4 plus a $2 postage charge. After significant growth, Netflix decided to switch to a subscriber-based model.

In 2000, Netflix introduced a personalized movie recommendation system. In this system, a user-based rating helps to accurately predict choices for Netflix members. By 2005, the number of Netflix subscribers rose to 4.2 million. On October 1, 2006, Netflix offered a $1,000,000 prize to the first developer of a video-recommendation algorithm that could beat its existing algorithm Cinematch, at predicting customer ratings by more than 10%.

By 2007 the company decided to move away from its original core business model of DVDs by introducing video on demand via the internet. As a part of the internet streaming strategy, they decided to stream their content on Xbox 360, Blu-Ray disc players, and TV set-top boxes. The ventures also partnered with these companies to online streaming their content. With the introduction of the services in Canada in 2010, Netflix also made its services available on the range of Apple products, Nintendo Wii, and other internet-connected devices.

In 2013, Netflix won three Primetime Emmy Awards for its series “House of Cards. By 2014, Netflix made itself available in 6 countries in Europe and won 7 creative Emmy Awards for “House of Cards” and “Orange Is the New Black”. With blooming streaming services, Netflix gathered over 50 million members globally. By 2016, Netflix was accessible worldwide, and the company has continued to create more original content while pressing to grow its membership. From this point, Netflix was unstoppable and today it has a worldwide presence in the video-on-demand industry.

Business Model of Netflix

The platform has advanced to streaming technologies that have elevated and improved Netflix’s overall business structure and revenue. The platform gives viewers the ability to stream and watch a variety of TV shows, movies, and documentaries through its software applications. Since Netflix converted to a streaming platform, it is the world’s seventh-largest Internet company by revenue.

Now, let’s have a look at the business model of Netflix. 1. Netflix’s Key Partners:

• Netflix has built more than 35+ partners across the world. They have partnered with different types of genres for subscribers to select from and enjoy watching.
• Built alliances with Smart TV companies like LG, Sony, Samsung, Xiaomi, and other players in the market.
• Built alliances with Apple, Android, and Microsoft platforms for the purpose of converting business leads from mail-in-system to streaming.
• Built alliances with telecom networks like Airtel, Reliance Jio, and Vodafone.

2. Netflix’s Value Proposition:  Netflix aims to provide the best customer experience by deploying valuable propositions. Here is how the online streaming brand strives to do so:

• With a 24*7 streaming service, users can enjoy shows and movies in high-definition quality from anywhere whether they are at home or traveling.
• Users get access to thousands of movies and tv shows and Netflix Original movies or shows.
• New signups can avail of a 30-day free trial and have the option of canceling their subscriptions anytime.
• Receive algorithmic recommendations for new items to watch.
• At Netflix, users have the flexibility to either turn on notifications and suggestions or keep them switched off.
• Netflix’s “user profiles” give leverage for users to personalize their user accounts and preferences. The User profiles allow the “admin-user” to modify, allow or ever restrict certain users.
• Sharing account options is one of the rarest features a movie platform can provide. Sharing accounts feature on Netflix allows spouses, friends, or even groups to share an account with specific filters and preferences already set.

3. Netflix’s Key Activities

• Maintain and continue to expand its platforms on the website, mobile apps
• Curate, develop and acquire licenses for Netflix’s original content and expand its video library.
• Ensure high-quality user recommendations to retain the customer base
• Develop and maintain partnerships with studios, content production houses, and movie production houses.
• Operate according to censorship laws. Netflix always promotes and operates within the boundaries of censorship.

4. Netflix’s Customer Relationships:  Netflix has designed a customer-friendly platform that offers:

• Self-Setup:  Netflix platform was originally designed to ensure that it is simple and easy to use. Developers of the website ensured to associate elements and themes that serve, promote friendliness, and provide self-setup.
• Unbelievable Customer Experience:  Customers can solve their queries by reaching the Netflix team through the website portal, emailing inquiries, and directly reaching the representative on call or live chat.
• Social Media Channels:  Netflix also engages its audience through social media platforms such as Facebook, Instagram, and LinkedIn. It advertises and offers deals to gain high attraction customers and enhance its customer base.
• Netflix Gift Cards:  Netflix offers its customers special promotional discounts and other gift cards as a part of their subscription plan.

Netflix’s Revenue Model

Netflix gained major popularity when the platform launched online streaming services. Let’s have a look at how the platform earns.

• Subscription-Based Business Model:  Netflix offers monthly subscription fees with three different price options basic, standard, and premium plan. Today, Netflix has over 125 million paid members from over 190 countries and generates $15 billion annually.
• Important partnerships:  Built alliances with a wide range of movie producers, filmmakers, writers, and animators to receive content and legally broadcast the contents required by aligning licenses.
• Internet Service Provider:  One of the most influential tactics implemented was its ability to build alliances with a wide range of movie producers, filmmakers, writers, and animators to receive content and legally broadcast the contents required by aligning licenses.

Netflix was able to establish a well-reputed image worldwide and increased its customer base day by day. When it comes to giving competition, the brand has devised various digital marketing strategies and has gained wide popularity on digital media platforms. With the help of the best digital marketing services, they have kindled the excitement and craze in the people to travel and host.

Digital Marketing Model of Netflix

In less than 4 years, Netflix has gathered a major share of the Indian market. Today a majority of households in India subscribe to Netflix, and that number is expected to rise this year and further in the years to come. The product is designed so well, that you remain engrossed in the content they deliver. They adopted top digital marketing strategies. Consult the best brand activation agencies. Further, let’s talk about a few of the digital marketing principles that Netflix has successfully implemented to gather customers.

1. Personalised Content Marketing:  People love using Netflix because they get a broad range of things to watch. Netflix’s library of TV shows and movies from all over the world is there for consumers to choose from at any time.

The reason that Netflix won the personalization game is that its advanced algorithm continues to rearrange the programs overtime on the basis of your viewing history. Hire some of the best  performance marketing agencies  for personalized content.

2. Website Development:  Netflix has designed its website with a user-friendly interface that allows customers to rate TV shows and movies, which then goes through Netflix’s algorithm to recommend more content they might enjoy. With the onsite optimization for the website, they have optimized each and every page for enhanced customer experience.

To easily get in the minds of customers, they have optimized their website for content by title, by an actor’s name, or even by a director’s name. By leveraging the  best website development services , they added a host of personalization features to their website with clean looks no matter which platform you are using.

3. Email Marketing:  Netflix tapped on email marketing techniques as a part of its digital marketing strategy and as a key component of customer onboarding and nurturing. New Netflix customers receive a series of emails that make content recommendations and encourage new users to explore the platform. Netflix marketers invest hours in building creative email marketing campaigns designed to engage and delight recipients. With the help of the  best email marketing services , they continue to enhance the experience of the customers

4. Search Engine Optimization:  Netflix makes use of search engine optimization services for the sake of improving organic research and establishing its brand presence. The brand aimed at the  best search engine optimization services  to drive traffic organically and adopted both on-page and off-page SEO strategies. They optimized their content with potential keywords that show up high in search results. They also tapped the strategy of International SEO to gain organic leads from the worldwide stage.

5. Social Media Optimization:  Today, social media platforms have become an integral part of digital marketing strategy. If you want to connect with your audience in real time, then it is the best platform to establish your brand image. As social media plays a vital role in the lives of people, Netflix decided to leverage the  best social media optimization services  that made them earn billions. They made use of the following platforms:

Through  creative social media optimization strategies,  Netflix has garnered more than 61 million Facebook followers. In just one year, the brand added 11 million followers to its account. Netflix posts nearly 90% of videos and the rests images. Videos featured on Netflix’s

Facebook pages are typically clips from interviews with the actors from the upcoming movies, clips from the upcoming movies and TV shows, offering audiences a sneak peek into what’s in store for them. Besides videos, the OTT platforms share images, GIFs, funny memes, and simple text posts featuring questions about current movies and TV shows.

Netflix carries 19 million followers. The majority of Netflix’s posts on Instagram are images, post scenes from TV shows featuring engaging captions to get a conversation going, and behind-the-scenes clips and interviews with actors. A recent video featured a behind-the-scenes bloopers video from the set of Stranger Things, which garnered 1.2 million views and almost 3,000 comments. Netflix uses a simple approach to posting, with most posts not featuring any hashtags at all.

Netflix carries 6.8 million followers on Twitter and has tweeted over 30,000 times. Netflix is renowned for its witty replies and comebacks on Twitter, and the brand tweets an average of 14 times a day. This shows just how important engagement is for the brand and how much it values brand awareness. These are the digital marketing techniques that the famous OTT platform adopted from time to time to the subscribers’ engagement and retention. Hence it has yielded high returns for their business.

Campaigns of Netflix

1. Netflix: The Spoiler Billboard:  Netflix’s new campaign uses spoilers of its most popular shows, including Stranger Things, Money Heist and Narcos, to promote social distancing amid the COVID-19 crisis, and while the effort is getting a lot of buzzes, it’s a fake.

2. FU2016:  To launch season four of the political drama House of Cards, Netflix worked with BBH New York and built a fake presidential campaign around the show’s lead character Frank Underwood. The campaign became the top trending topic on Facebook and Twitter during the debate, and it won a Grand Prix in the Integrated category at Cannes in 2016.

3. The Censor’s Cut:  The streaming company wanted to advertise Narcos Mexico in Thailand. Netflix worked with JWT Bangkok and cut around the offending images within each scene, leaving a clear enough outline that anyone could still identify what had been removed. The campaign achieved the opposite effect of what censorship is supposed to do by reaching 34 million people.

Conclusion Netflix is a rare example of a company doing everything right. From its branding and content right down to its business model and product, the company has always excelled at making smart, strategic decisions. With its large market share and focus on numbers, Netflix has managed to develop a deep understanding of its audience that very few others have. With this knowledge, paired with a strong, affordable product, there’s no limit to what this brand can do in the future.

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Experential

How Netflix Expanded to 190 Countries in 7 Years

by Louis Brennan

Summary .   

Netflix’s global growth is a big factor in the company’s success. It operates in over 190 countries, and its international streaming revenues now exceed its domestic revenues. But only eight years ago Netflix was only in the U.S. How did it expand so quickly? First, it didn’t enter all markets at once. It started slowly, in countries that were similar to its U.S. home market. Using what it learned in these markets, it expanded to a few dozen countries by 2015, and then continued learning and growing from there. Second, it adapted to local cultures and preferences, using that knowledge to appeal to customers all over the world, both with its content offerings and with the partnerships it formed with local stakeholders. Netflix’s strategy constitutes a new approach to growth that the author calls exponential globalization , and it’s one that other companies can use too.

Netflix’s global growth is a big factor in the company’s success. By 2017 it was operating in over 190 countries, and today close to 73 million of its some 130 million subscribers are outside the U.S. In the second quarter of 2018, its international streaming revenues exceeded domestic streaming revenues for the first time. This is a remarkable achievement for a company that was only in the U.S. before 2010, and in only 50 countries by 2015.

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Netflix SWOT Analysis & Recommendations

This SWOT analysis of Netflix examines the internal and external factors that influence the competitive advantages of the entertainment and content streaming business. The company’s operations depend on information technology for its streaming infrastructure, as well as consumer electronics and Internet services available to target customers. These factors in the internal and external environments of the business are considered in this SWOT analysis of Netflix, relating to the company’s comparative performance and competitive advantages relative to other firms in the international market. Netflix’s growth and expansion and current potential for further business growth and profitability are positive indicators considered in this SWOT analysis.

This SWOT analysis includes an internal analysis of Netflix’s strengths and weaknesses, which determine core competencies and business capabilities for competitive advantages. This SWOT analysis also shows an external analysis of Netflix’s opportunities and the threats to its business. These strengths, weaknesses, opportunities, and threats (SWOT) represent the company’s status and position as a competitor in the entertainment content production and streaming market.

Netflix’s Strengths

Internal factors that make the video streaming business competitive are evaluated in this part of the SWOT analysis. The following competitive advantages are Netflix’s strengths:

• International market reach
• Economies of scale
• Content production capabilities

Netflix’s international market reach equates to a large user base, a large market share, and commensurate revenues from streaming services. This multinational user base also supports the company’s economies of scale, which ensures adequate funds for business operations, such as the production of original movies and series. Considering the internal business environment evaluated in this SWOT analysis of Netflix, these internal factors are competitive advantages that allow for large-scale operations and profitability in streaming services. The company also maintains competitive pricing for streaming services with support from these business strengths. Moreover, Netflix’s content production capabilities are relevant to this SWOT analysis. This strength is a competitive advantage that empowers the business to retain subscribers despite competitors and alternatives for Netflix’s streaming services. This part of the SWOT analysis shows the competitive advantages for achieving the entertainment goals and strategic objectives established through Netflix’s mission and vision , which aim to provide entertainment for the global market.

Netflix’s Weaknesses

Internal factors that prevent maximum business performance are considered in this part of the SWOT analysis. The following business conditions are Netflix’s weaknesses:

• Lack of own data center
• Low control over mobile app availability and accessibility
• Low control over internet connection speeds
• Limited content production

Netflix streams movies and series from cloud computing infrastructure using Amazon Web Services (AWS). Also, Netflix’s app availability and accessibility are subject to the requirements and limits of app stores, such as Apple ’s App Store and Google Play Store. Moreover, internet service providers (ISPs) determine connection speeds and throttling policies for streaming videos. In this SWOT analysis of Netflix, these weaknesses are internal factors that indicate limited or low control over some critical factors that affect the company’s online services and competitive advantages. Furthermore, the limited extent of the company’s content production is a weakness in this SWOT analysis, considering some competitors’ large-scale entertainment production and distribution capabilities. The strategies and tactics involved in Netflix’s marketing mix (4P) depend on how these weaknesses affect business operations. For example, this SWOT analysis shows limited content production, which affects the product mix, as well as lack of control on app availability and accessibility, which influences Netflix’s distribution strategy.

Opportunities for Netflix

External factors that can improve business performance are evaluated in this part of the SWOT analysis. The following are Netflix’s opportunities:

• Development of novel digital products/services for subscribers
• Diversification for business growth outside content streaming
• Development of the company’s own data center

The opportunity to provide new products capitalizes on Netflix’s strength of its international market reach. For example, the company can develop and offer additional or new mobile games on top of its core movies and series. Another of Netflix’s opportunities is diversification, which can include consumer electronics that create a service ecosystem involving movies, series, and video games. In this SWOT analysis, developing new products and diversifying the online business can create new revenue-generation channels. Netflix can also consider building a data center as its operations grow, considering dependence on AWS, which is a weakness considered in this SWOT analysis. However, the company continues to indicate that the benefits of using AWS outweigh its disadvantages. For the opportunities in this part of the SWOT analysis, Netflix’s competitive strategy and growth strategies include competitive advantages for product development and diversification.

Threats to Netflix

External factors that limit or decrease business performance are considered in this part of the SWOT analysis. The following industry and market factors are the threats to Netflix:

• Competition
• Content piracy
• Changes in Amazon’s rules and policies for AWS

The aggressive and high-pressure competition described in the Five Forces analysis of Netflix is a major threat relevant to this SWOT analysis of the business. The company competes with the movie and series production and distribution businesses of Disney , Sony , and NBCUniversal, as well as the content production and streaming services of Apple TV Plus, Google’s (Alphabet’s) YouTube, Facebook (Meta) , Amazon Prime Video, and Microsoft Movies & TV (Films & TV). Netflix also states that content piracy in some countries or regional markets is an external factor that threatens the business. In this SWOT analysis, piracy can reduce or limit membership and corresponding subscription revenues. Nonetheless, Netflix’s competitive and affordable pricing can encourage customers to pay for the company’s service instead of consuming pirated entertainment content. Considering this competitive landscape, changes in AWS policies and strategies can threaten the stability of Netflix’s cloud computing infrastructure and online services. The threats in this SWOT analysis are beyond the company’s control, although strengthening competitive advantages can protect the integrity and profitability of the online business.

Netflix SWOT Analysis – Recommendations

The internal and external factors in this SWOT analysis of Netflix indicate a business situation where the company can grow with cautious strategic implementation. While the company’s competitive advantages can promote further growth, strategic prioritization for content production, product development, and business diversification can address the weaknesses, opportunities, and threats considered in this SWOT analysis. Netflix’s strengths and competitive advantages can support this strategic prioritization and corresponding adjustments in its operations.

• Jang, M., Kim, D., & Baek, H. (2023). How do global audiences of TV shows take shape? Evidence from Netflix. Applied Economics Letters, 30 (3), 285-291.
• Netflix, Inc. – Form 10-K .
• Netflix, Inc. – Long-Term View .
• Netflix, Inc. – Top Investor Questions .
• Taherdoost, H., & Madanchian, M. (2021). Determination of business strategies using SWOT analysis; Planning and managing the organizational resources to enhance growth and profitability. Macro Management & Public Policies, 3 (1), 19-22.
• U.S. Department of Commerce – International Trade Administration – Media and Entertainment Industry .
• van Es, K. (2023). Netflix & big data: The strategic ambivalence of an entertainment company. Television & New Media, 24 (6), 656-672.
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• Educators, Researchers, and Students: You are permitted to quote or paraphrase parts of this article (not the entire article) for educational or research purposes, as long as the article is properly cited and referenced together with its URL/link.

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How Data Analytics can be a Game Changer: A Netflix Case Study

As per McKinsey, machine learning that incorporates a wide plethora of algorithms in the past few years is evolving faster due to the advent of analytics. With businesses investing heavily in cloud and the rapid digitization of the professional ecosystem, analytics is all set to become a significant aspect in deciding the fate of organizations.

Data Analytics – How Can It Transform Your Business?

As per a study by SAS , more than 70% of organizations believe that data analytics plays a vital role in getting precise insights. The study also said that out of ten organizations, six of them said that leveraging analytics makes them more innovative. Analytics is slowly but steadily evolving in the competitive landscape. Industry leaders are using analytics to make decisions that can help them to stay ahead of their peers, besides exploring better revenue opportunities, new markets, and building a better relationship with their customers.

The very reason why business models of Uber, Airbnb, and Spotify are sustaining is data and analytics. When you digitize your interactions with customers, you create a window to get immense information. This customer information could be utilized for making effective marketing strategies, better products, and making more sales.

A lot of C-suite leaders now understand the importance of data and understand the risk it carries if not secured correctly. What is startling is and makes investment in data and analytics even more important is the kind of ROI it gives. In the Journal of Applied Marketing Analytics, Jacques Bughin says, the ROI on data and analytics is better than the investments done in computers during the 1980s.

The power of data and analytics is also harnessed to improvise core operations or create new business models from scratch. The most exceptional example is Netflix. Netflix has efficiently used its customer data to refine its recommendation engine and give a better experience to the users. Not only that Netflix has surpassed Disney as the most valued media company in the world with a valuation of more than $160 billion. One of the biggest reasons for their success is their impeccable customer retention rate. Their customer retention rate is more than a staggering 90% which is far better than Hulu’s 64% and Amazon Prime’s 75%.

The second most important reason why Netflix is way ahead of its competitors is- Content Creation . The kind of quality shows and movies it makes like “Orange is The New Black”, “Sacred Games”, and “BirdBox”. These shows have received a thunderous response across the globe resulting in a steady rise in subscription rates. One of the primary reasons why they succeed in making better content is that they understand what their audience wants to see leveraging data and analytics.

So, How Does Netflix Leverage Big Data and Analytics?

Netflix has digitized its interactions with its 151 million subscribers . It collects data from each of its users and with the help of data analytics understands the behavior of subscribers and their watching patterns. It then leverages that information to recommend movies and TV shows customized as per the subscriber’s choice and preferences.

As per Netflix, around 80% of the viewer’s activity is triggered by personalized algorithmic recommendations. Where Netflix gains an edge over its peers is that by collecting different data points, it creates detailed profiles of its subscribers which helps them engage with them better.

Netflix collects information on how a user interacted and responded to a TV show or a movie. If we go into details, it collects the following data: –

• Time and date when a user watched a show
• The device used to watch the show
• If the user pauses the show, do they resume watching
• Does the user binge-watch an entire season of a TV show?
• If they do, how much time does it take to binge watch it?

More than that, Netflix has ratings that the viewer gives to the content they watch, the number of searches they do, and what they search. The information collected is enough for creating a detailed profile of a user, and this is exactly what Netflix does. It leverages data analytics to make a robust recommendation algorithm that suggests the best content to the subscriber as per their needs and preferences. The user no more must endlessly search through streams of content to find out what he or she wants to watch. Netflix makes the job easier for them in the process, giving them a better and customized viewer experience.

The recommendation system of Netflix contributes to more than 80% of the content streamed by its subscribers which has helped Netflix earn a whopping one billion via customer retention . Due to this reason, Netflix doesn’t have to invest too much on advertising and marketing their shows. They precisely know an estimate of the people who would be interested in watching a show.

Apart from monitoring the online behavior of their users, Netflix has a feedback system in place. They encourage feedback from their audience, which further helps them understand their preferences and helps them in suggesting better shows and creating better content.

Why Investing in Data Analytics is Important?

There is a data explosion today, and the need for analytics has been growing exponentially. Tools and software are being developed to get precise insights from data.

If you want to know your customers better, find revenue opportunities, and tap into new markets. You need to have a mechanism that helps you gain better insights. As an organization, investing in data analytics will give you four significant benefits.

1. A Deeper Understanding of Customers

Earlier companies would generally categorize customers based on age, gender, and location. Now with the help of AI, one can map the digital footprints of their customers. Decision-makers can go through crucial behavior patterns of customers like price sensitivity, brand affinity, affluence, and preferences. These kinds of data mapping help in understanding your customers better enhancing your ability to build better products and services for them.

2. Early Detection of Problems in Products And Services

More than half of the professionals across North America and Europe are heavily dependent on analytics to enhance the quality of their products and services as per research from Forbes Insights and Cisco. Analytics can give you precise insights on the kind of concerns customers have, their changing needs, and based on that, you can innovate your offerings.

3. Identifying Better Marketing Strategies

With various digitization channels for customer interaction available now, businesses are adopting an omnichannel approach to engage with customers. Using analytics, marketers can get inputs on how to have meaningful engagements with customers across all channels. Also, analytics can help analyze successful marketing programs and identify strategies that yield better ROIs.

4. Finding Ways To Reduce Expenses

Once you start getting insights at departmental levels, it will help you identify areas where you can curb your costs. Insurance companies saved a good amount of money by identifying patterns of fraud and dismissing false claims.

How To Harness The Power of Data?

As an organization, do not be afraid of change. If you are yet to use analytics as an organization, start with small steps, fail faster, and make a steady transition. Do not go for overnight results instead practice consistency and prioritize your efforts.

The first step you need to do as a decision-maker is incorporating data and analytics into the core vision of the organization, focus on nurturing a data-driven culture. Slowly but steadily create a powerful data infrastructure and hire talent to operate it, make sure to highlight your data-driven culture in your employer branding campaigns.

Your success doesn’t lie in adopting the most powerful technology rather digitization of your organization from the bottom. Companies like Netflix, Amazon, and Google, who are leading the analytics game, gradually transitioned to a data-savvy culture. It wasn’t all overnight but a gradual process that took a few years. Not only did they heavily invest in analytics but they have also kept themselves observant of the changing trends of artificial intelligence. They are putting the case strongly before all other organizations- if you want to survive in the market, you need to invest in data analytics, and that is not negotiable at all. Contact Us for more details.

References-

1. https://seleritysas.com/blog/2019/04/05/how-netflix-used-big-data-and-analytics-to-generate-billions 2. https://www.mckinsey.com/business-functions/mckinsey-analytics/our-insights/how-companies-are-using-big-data-and-analytics

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A Machine Learning Case Study for Recommendation System of movies based on collaborative filtering and content based filtering.

veeralakrishna/Case-Study-ML-Netflix-Movie-Recommendation-System

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Case-study-ml-netflix-movie-recommendation-system, business problem.

Netflix is all about connecting people to the movies they love. To help customers find those movies, they developed world-class movie recommendation system: CinematchSM. Its job is to predict whether someone will enjoy a movie based on how much they liked or disliked other movies. Netflix use those predictions to make personal movie recommendations based on each customer’s unique tastes. And while Cinematch is doing pretty well, it can always be made better. Now there are a lot of interesting alternative approaches to how Cinematch works that netflix haven’t tried. Some are described in the literature, some aren’t. We’re curious whether any of these can beat Cinematch by making better predictions. Because, frankly, if there is a much better approach it could make a big difference to our customers and our business. Credits: https://www.netflixprize.com/rules.html

Problem Statement

Netflix provided a lot of anonymous rating data, and a prediction accuracy bar that is 10% better than what Cinematch can do on the same training data set. (Accuracy is a measurement of how closely predicted ratings of movies match subsequent actual ratings.)

• https://www.netflixprize.com/rules.html
• https://www.kaggle.com/netflix-inc/netflix-prize-data
• Netflix blog: https://medium.com/netflix-techblog/netflix-recommendations-beyond-the-5-stars-part-1-55838468f429
• surprise library: http://surpriselib.com/ (we use many models from this library)
• surprise library doc: http://surprise.readthedocs.io/en/stable/getting_started.html (we use many models from this library)
• installing surprise: https://github.com/NicolasHug/Surprise#installation
• Research paper: http://courses.ischool.berkeley.edu/i290-dm/s11/SECURE/a1-koren.pdf (most of our work was inspired by this paper)
• SVD Decomposition : https://www.youtube.com/watch?v=P5mlg91as1c

Real world/Business Objectives and constraints

Objectives:.

• Predict the rating that a user would give to a movie that he has not yet rated.
• Minimize the difference between predicted and actual rating (RMSE and MAPE)

Constraints:

• Some form of interpretability.
• There is no low latency requirement as the recommended movies can be precomputed earlier.

Type of Data:

• There are 17770 unique movie IDs.
• There are 480189 unique user IDs.
• There are ratings. Ratings are on a five star (integral) scale from 1 to 5.
• There is a date on which the movie is watched by the user in the format YYYY-MM-DD.

Getting Started

Start by downloading the project and run "NetflixMoviesRecommendation.ipynb" file in ipython-notebook.

Prerequisites

You need to have installed following softwares and libraries in your machine before running this project.

• Anaconda: It will install ipython notebook and most of the libraries which are needed like sklearn, pandas, seaborn, matplotlib, numpy, scipy.
• Python 3: https://www.python.org/downloads/
• Anaconda: https://www.anaconda.com/download/
• XGBoost: conda install -c conda-forge xgboost
• Surprise: pip install surprise
• ipython-notebook - Python Text Editor
• sklearn - Machine learning library
• seaborn, matplotlib.pyplot, - Visualization libraries
• numpy, scipy- number python library
• pandas - data handling library
• XGBoost - Used for making regression models
• Surprise - used for making recommendation system models

Veerala Hari Krishna - Complete work

Acknowledgments

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Does the vaccination against tick-borne encephalitis offer good value for money for incidence rates below the who threshold for endemicity a case study for germany.

1. Introduction

2. materials and methods, 2.1. general model settings, 2.2. model structure, 2.3. base case inputs, 2.4. vaccination, 2.5. health utility (hu) estimates, 2.6. cost estimates, 2.7. analysis, 3.1. base case results, 3.2. incidence threshold analysis, 4. discussion, 5. conclusions, supplementary materials, author contributions, institutional review board statement, informed consent statement, data availability statement, conflicts of interest.

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Müller, M.; Lintener, H.; Henkel, V.; Pilz, A.; Halsby, K.; Malerczyk, C.; Madhava, H.; Moïsi, J.C.; Yu, H.; Schley, K. Does the Vaccination against Tick-Borne Encephalitis Offer Good Value for Money for Incidence Rates below the WHO Threshold for Endemicity? A Case Study for Germany. Vaccines 2024 , 12 , 1165. https://doi.org/10.3390/vaccines12101165

Müller M, Lintener H, Henkel V, Pilz A, Halsby K, Malerczyk C, Madhava H, Moïsi JC, Yu H, Schley K. Does the Vaccination against Tick-Borne Encephalitis Offer Good Value for Money for Incidence Rates below the WHO Threshold for Endemicity? A Case Study for Germany. Vaccines . 2024; 12(10):1165. https://doi.org/10.3390/vaccines12101165

Müller, Malina, Hannah Lintener, Vivien Henkel, Andreas Pilz, Kate Halsby, Claudius Malerczyk, Harish Madhava, Jennifer C. Moïsi, Holly Yu, and Katharina Schley. 2024. "Does the Vaccination against Tick-Borne Encephalitis Offer Good Value for Money for Incidence Rates below the WHO Threshold for Endemicity? A Case Study for Germany" Vaccines 12, no. 10: 1165. https://doi.org/10.3390/vaccines12101165

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