1

Netflix – A Game Changer in Internet Streaming Media

ASHISH ARORA

2Outline

Netflix Organization Description Company Emergence

Collaboration with different industries

Integrating different technologies in one product

Technology Involved Technologies used in making Netflix Product. The Overall IT infrastructure of Organization Technologies used by Netflix which is changing streaming media and DVD

industry.

3 Outline

The Competitive Environment Competitors Customers Partners

Economics Financial Laddering of Netflix Cash flow and Revenue Generated

Organizational Implementation Netflix Organization Structure

Critical success factor and Major Risks

Proposal to make Netflix better and handier

4

Netflix Organization Description

5Netflix – A Streaming Media Company

American Multinational Company Changing the business of television Provides on demand Internet Media Services and DVD rental

and purchase.

6Emergence of Netflix

Founded in 1997 by Reed Hastings and Mark Rudolph (Rudolph left in 2002)

1997 Founded

2000 personalized movie recommendation system

2005Reached 4.2 million subscriber

2007 Moved in to Streaming

2015 More than 50 million users

7

8The Technology

Netflix

Software Recommenda

tion Algorithm

UDP- Chain Technology

Cassandra

Open Connect CDN

Netflix on Android

Adaptive Bitrate

Streaming Technology

9Netflix Recommendation Algorithm

Many recommendation algorithms at Netflix ranging from personalized ranking to page optimization.

Every thing is recommendation

10Adaptive Bitrate Streaming

Based On HTTPWorks by detecting a user's bandwidth and CPU capacity in real time

and adjusting the quality of a video streamVery little buffering, fast start time and a good experience for both

high-end and low-end connections

11Other Important Technology Areas of Netflix

Big Data Technologies used

in Netflix

Running All of Netflix Streaming Infrastructure on Cloud - Amazon

Web Services cloud

12

The Competitive Environment

13The Competitive Environment For Netflix

14Blockbuster – A Competitor which lost the market

Ruled the movie rental business early 90’s but missed

to adopt new technology

Soon filed for bankruptcy

NetFlix set a new standard for the exploding market in movies

and video

15Top Three Competitors of Netflix

 

16

Economics

17Market Analysis of Netflix

Netflix market has had a consistent growth trend over the years.

Sales for Netflix has grown at an average of 40% Netflix has strong gross profit Margins of approx.

54% which is substantially higher compared to industry standards

Netflix has lower credit risk having higher liquidity.Market Analysis

High Sales Strong Profit Margin

Lower Credit Risk

18Market Capitalization Of Netflix in Terms of its

subscribers

19Netflix –The Financials

Initial Startup Cost - $2.5 million

20How Netflix generates revenue

Generates Revenue through the monthly membership fees for its content streaming services and DVD by mail service.

Content acquisition is an important part of Netflix business. For content delivery Netflix utilizes its own content delivery

network known as Open Connect.

21Revenue Generation through In-House Products

The In-House Products of Netflix like “House of Cards” and “Orange is the New Black” have provided strong customer base with over 60 Million customers.

22

Organizational Implementation

23Netflix Organization Structure

Reed Hastings, Founder and CEO

Kelly Bennett, Chief Marketing Officer

Netflix

Tawni Cranz, Chief Talent

Officer

Jonathan Friedland, Chief Communications

Officer

Neil Hunt, Chief Product

Officer

David Wells, Chief Financial

Officer

Organization follows a flat structure

24Key Success Factor of Netflix

Know what kind of company you are Time your opportunity Have good relationships with content providers Test a lot Price the product well Promote creativity from within

25Risk Factors For Netflix

Attract and Retain Members. The long-term and fixed cost nature of Netflix

content licenses may limit operating flexibility. Not able to manage change and growth of

business. Relying upon Amazon Web Services to operate

certain aspects of Netflix service 

26Proposal to make Netflix product to be better

Incognito Mode Integrated Social Media Playlists Bandwidth Indicator Ratings Comparisons

27REFERENCES

http://www.netflix.com/ http://netflixcompanyprofile.weebly.com/ https://en.wikipedia.org/wiki/Netflix http://techblog.netflix.com https://www.quora.com http://www.investopedia.com http://www.geek.com/ http://finance.yahoo.com/ https://www.google.com/

28

THE END