Introduction
Netflix is one of the most successful companies in the media and entertainment industry. With over 208 million subscribers globally, Netflix has revolutionized the way we consume TV shows, movies, and other video content. The company’s meteoric rise has been the result of a well-crafted business strategy that has enabled it to outshine its competitors. In this article, we’ll explore how Netflix has used its business strategy to become one of the world’s most successful companies.
The Beginning
Netflix was founded in 1997 by Reed Hastings and Marc Randolph. Initially, the company offered a DVD-by-mail rental service that allowed subscribers to rent and return DVDs without late fees. However, the emergence of online streaming services threatened to put Netflix out of business. Rather than resisting this change, Netflix adapted and embraced online streaming as part of its business model.
Netflix’s Business Strategy
Netflix’s business strategy is centered around providing subscribers with a personalized entertainment experience that is both affordable and high-quality. This strategy involves several key elements, including:
Original Content
Netflix creates its own original content, such as TV series, movies, and documentaries. This content is exclusive to Netflix and cannot be found on any other platform. By creating original content, Netflix reduces its reliance on licensed movies and TV shows. Furthermore, it allows the company to control the content that is available on its platform, which enables it to provide a consistent experience to subscribers.
Data-Driven Recommendations
Netflix uses subscriber data to provide personalized recommendations on what to watch. Using machine learning algorithms, Netflix tracks subscriber viewing habits, likes, and dislikes to suggest content that is likely to be of interest to the individual subscriber. This data-driven approach has been hugely successful and has helped Netflix retain subscribers and increase their engagement with the platform.
Low Subscription Fees
Netflix’s subscription fees are affordable and provide great value for money. This low-cost model has helped Netflix attract and retain subscribers from all over the world. Furthermore, by keeping its subscription fees low, Netflix has been able to compete with other streaming services, many of which charge significantly higher prices.
Global Expansion
Netflix has expanded globally, providing its service in over 190 countries. This global expansion has been crucial to the company’s success. By providing its service in so many countries, Netflix has been able to tap into a vast and diverse market, which has helped it grow its subscriber base and revenue.
Case Study: “Stranger Things”
“Stranger Things” is one of Netflix’s most successful original content offerings. It has been praised for its engaging plot and memorable characters. However, the success of “Stranger Things” is not just down to its content. Netflix used several crucial elements of its business strategy to make “Stranger Things” a success.
Firstly, Netflix used its data-driven approach to identify that viewers enjoyed sci-fi and horror genres. The company then used its algorithms to identify viewers who were likely to enjoy “Stranger Things” and promoted the series to them.
Secondly, by creating original content, Netflix was able to control the content available on the platform, ensuring that “Stranger Things” was exclusive to Netflix. This exclusivity helped Netflix retain subscribers and attract new ones.
Thirdly, Netflix made the first season of “Stranger Things” available for free to non-subscribers for a limited time. This promotional strategy helped Netflix attract new subscribers who enjoyed the show and wanted to watch other content on the platform.
Conclusion
Netflix’s business strategy has been instrumental in achieving its current success. By providing subscribers with a personalized experience, low subscription fees, and globally available content, Netflix has become the world’s leading streaming service provider. The company’s strategy of creating original content that is exclusive to the platform has helped it stand out from its competitors, and its data-driven approach to recommendations has increased engagement and viewer retention. Overall, Netflix’s business strategy is an excellent case study for companies looking to achieve success in a crowded market.
