Netflix: Case Study

Presented by

Susmitha Annamaneni

Overview World’s largest online movie rental service

Founded by Reed Hastings

Established in 1998 and headquartered in Los Gatos,California

More than 90,000 DVD titles

Offers flat rate rental-by-mail to customers

Growing library of more than 5,000 choices that can bewatched instantly on their PCs

Over 6.7 million subscribers

They have over 55 million discs and ship 1.6 million aday, on average

Corporate History Netflix was incorporated on August 29, 1997 Began operations on April 14, 1998 Initiated an initial public offering (IPO) on May 29, 2002selling 5,500,000 shares of common stock at the price of

US$15.00 per share On June 14, 2002, it sold an additional 825,000 shares of

common stock at the same price Netflix posted its first profit during fiscal year 2003 Netflix mails about 190,000 discs per day to its 670,000

monthly subscribers. Subscriber counts have increased from one million by the

fourth quarter of 2002 to around 5.6 million at the end ofthe third quarter of 2006

How Netflix Works?

Features

Instant Viewing

Queue

Browse

Movie Recommendations

Community

Netflix Facts

Ratings

Rental Habits

Recommendations

CustomerSatisfaction

Inventory

Volume

Environment

Services

Flat-fee service

Various plans

Sells gift subscriptions

Instant Viewing

Sells used DVDs to its subscribers

Pricing Levels1 at-a-time (2 a month) - just $4.99 a month1 at-a-time (Unlimited) - just $8.99 a month2 at-a-time (Unlimited) - just $13.99 a month3 at-a-time (Unlimited) - just $16.99 a month4 at-a-time (Unlimited) - just $23.99 a month5 at-a-time (Unlimited) - just $29.99 a month6 at-a-time (Unlimited) - just $35.99 a month7 at-a-time (Unlimited) - just $41.99 a month8 at-a-time (Unlimited) - just $47.99 a month

Marketing Strategies

Pay-for-performance banner fromyahoo, MSN, AOL

Search-engine Third party download ads and logos Best-buy to include flyers Free trials Shared revenue with studios

Competitors

Blockbuster, Inc. Wal-Mart Stores, Inc. Amazon. COM, Inc.

Netflix Growth

Achievements

Number #1 website in Spring 2005 ,Spring 2006, and Spring 2007

Fall 2005 - Annual Customers FirstAward

January 2007 - Retail Innovator ofthe Year

References http://www.netflix.com/MediaCenter?id=5379&hnjr

=8#snapshot http://en.wikipedia.org/wiki/Netflix http://www.fundinguniverse.com/company-

histories/Netflix-Inc-Company-History.html http://ir.netflix.com/