This presentation go over the nine business elements of Netflix and their business model.

1. EBM
Presentation
Netflix, Inc.
Giovanna Correa
10 December 2016
Carol Wonsavage
Entertainment Business
Models Full Sail University

2. • Mission of becoming the best
global entertainment distribution
service.
• Best way to watch anything
without needing to leave home.
• Treat their employees with respect
and help to develop their career.
Why I chose this company:

3. American
multinational
entertainment
company
founded on 29
August 1997 in
California
In 2007, Netflix
grew its
business by
expanding
itself with the
introduction of
streaming
media.
Statistics say
that on January
2016, Netflix
was available in
over 190
countries.
Netflix entered
the film and
television
industry in
2013, debuting
its first series
called ‘House
of Cards’.
The company
is releasing an
estimated 126
original series
or films in
2016.
The monthly
subscription has
three different
types: basic,
standard and
premium, with
prices ranging
from $8 to $12.
Netflix
reported over
86 million
subscribers
worldwide.
Background Information

4. o Diversified mass market
• Based worldwide;
• Age range from 18 to 59 years;
• Very dynamic;
• Constantly changes;
• Follows technology innovations
and consumer behavior;
• June 2013 had 36.7 million people
subscribed to Netflix (spend 2
billion hours watching Netflix);
Customer Segments

5. Legal access to
the rich movie
database with
more than
20,000 episodes.
Customers’
ratings are used
for the
recommendations
Rating enables a
better use of
movies available
on the website
Has one of the
widest supported
devices ranges
(mobile,
computer, game
consoles)
Convenience
and usability by
the ease that is
having access to
the service
Customized
browsing gives
customers full
control over their
experience
Price is relative to
the billions of
hours of content
that Netflix can
provide on their
streaming
service.
Value Proposition

6. • Online streaming service since
2008, using the website for
computers and its application
for smartphones, tablets,
game consoles and other
platforms.
• DVD and Blu-ray discs rental
by mail;
Channels of Distribution

7. Value of no-
commitment; efforts
to continue bringing
exclusive original
high-quality content
to get subscribers.
Chances of reaching
a potential
subscriber are
higher; those
specific people
already spend some
of their time on the
Internet.
Online subscription-
based entertainment
video service =
online advertising;
social media and
web-browsing.
Customer Relationships

8. • Contracts with Major
Companies;
• Providing Content;
• Marketing;
• Video on Demand;
Key Activities

9. Key Resources
Top-quality streaming
media infrastructure:
mandatory
requirement.
Staff: A well-trained
staff able to function
each duty.
Licensing: Customers
subscribes to be given the
license required to stream
on the multiple platforms.

10. • Internet Providers;
• Television Networks
and Motion Pictures;
• Amazon Servers;
Key Partners

11. • External content: must pay for the
license cost;
• Technology and Development Cost
o Fund the streaming processes;
o Improve the originality;
• Marketing;
• Administrative costs;
• DVD Warehouse Operation;
Cost Structure

12. Cost Structure

13. Monthly no
commitment
membership
fee:
62% of the
total revenue
for domestic
streaming;
23% of the
total revenue
from
international
streaming.
Domestic
DVD and Blu-
ray rental
services:
Around 13%
of the total
revenue.
Declined from
31.5% in 2012
to 13.9% in
2014.
Revenue Streams
$6.78 billion - 2015

14. • To grow its business and increase profitability,
Netflix should focus more on customer segments
and cost structure.
• Strategy to grow more of its streaming subscription
database both domestically and internationally;
• Small net profit compared to the billions of gross
revenue; these high expenses is the flaw in the
Netflix business model;
• To continue retaining the customers, focus also on
the key resources from the key partners as they
strive to reach customers through the various
channels.
Conclusion

15. References
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