2. 8

3. 7

4. 6

5. 5

6. 4

7. 3

10. In a world wrought with late fees…
came a new type of video rental service

12. Fed up with current options…
Customers embraced Netflix

13. Increasing subscribers
14,000
11,892
12,000
10,000 9,164
8,000 7,479
6,316
6,000
4,179
4,000
2,000
0
2005 2006 2007 2008 2009
(000’s)

14. Netflix continuously improved
Huge DVD selection New Streaming Video

15. Then… a perfect storm…
Pricing and service changes upset customers

16. In hindsight, it is hard to justify. Having separate
brands can in theory make sense. However,
after the price increase, Qwikster became they
symbol of Netflix not listening.
Qwikster was shut down
-- Reed Hastings, CEO, Netflix

17. Has netflix lost its way…
Or do they just suck at new releases?

18. Despite the debacle… growth.

19. Revenue growth
2,500,000 2,329,002
2,162,625
2,000,000 1,670,269
1,364,661
1,500,000
1,205,340
996,660
1,000,000
682,213
500,000
-
2005 2006 2007 2008 2009 2010 EOQ3
2011
($000’s)

20. Subscriber Growth
25,000 23,789
18,268
20,000
15,000
11,982
10,000
5,000
0
2005 2006 2007 2008 2009 2010 EOQ3
2011
(000’s)

21. International Expansion

22. Is Netflix still a strong brand?
Or has everything been taken?

23. Customers generally pleased
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
1 2 3 4 5 6 7

24. Value
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
1 2 3 4 5 6 7

25. Netflix is worth the money
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
1 2 3 4 5 6 7

26. The sands are shifting…
Netflix needs to adjust

27. 2008
Streaming is accelerating
Consumers are looking to stream content rather than rent
2009

28. Comcast
Apple
DirectTV
Time Warner
A Competitive Advantage
All Others Netfix

29. However, new challengers await
As preferences shift toward streaming, new competitors will arrive.

30. What’s a threatened brand to do?

31. The Usual Suspects: DVDs
DVD Renters enjoy the convenience of discs at their door

32. The Usual Suspects: Streaming
Streaming customers prefer easy access to movies on demand

33. Is Netflix down and out?
Or can they pull a rope-a-dope?

34. Short term strategy
Convenience Speed Content

35. Long Term Strategy
Leverage Emotion Social Interaction Entertainment Hub

36. The End?