This is a group project that we had to present at George Brown College. A problem that Netflix had during the early 2000s when they had to switch from DVDs to online streaming due to the Dot Com buzz.
6. January 15,2007, DVD Rental Giant announced that
it will launch a new online video streaming service.
“Its why we named the business Netflix
and not DVD by mail”-Hastings
10. Facts Collected from Database
A typical Netflix customer will lose interest in 60 to 90
seconds when choosing something to watch.
Interestingly, 80% of the content we watch on Netflix is
influenced by the company’s recommendation system.
If people truly dislike a movie, they would turn it off well before
they get to the 70% of movie duration.
20. References
• Netflix's Reed Hastings Is The Master Of Adaptation
Peter Cohan -
https://www.forbes.com/sites/petercohan/2013/10/22/netflixs-
reed-hastings-is-the-master-of-adaptation/#51b55529671b
• People Were Not Stoked About Netflix Streaming When It Debuted
Soo Youn –
https://bit.ly/2mhyEt
• What We Can Learn from Netflix's Marketing Strategy
https://www.thezenagency.com/latest/what-we-can-learn-from-
netflix-s-marketing-strategy
• How Netflix Is Changing The Tv Industry
Investopedia -
https://www.investopedia.com/articles/investing/060815/how-
netflix-changing-tv-industry.asp
• Topic: Netflix
Steve Fuller, Statista –
https://bit.ly/2kBzFN2
• Netflix Used Big Data To Identify The Movies That Are Too Scary To
Finish
Bernard Marr -
https://www.forbes.com/sites/bernardmarr/2018/04/18/netflix-
used-big-data-to-identify-the-movies-that-are-too-scary-to-
finish/#777fc7233990
• Netflix Makes Up Nearly 30 Percent Of Global Streaming Video
Subscriptions
Rani Molla - https://www.vox.com/2019/4/16/18410556/netflix-
30-percent-global-streaming-video-subscriptions-q1-2019
• How Netflix Uses Analytics To Thrive
https://bit.ly/2l99A8q
• What We Can Learn from Netflix's Marketing Strategy
https://www.thezenagency.com/latest/what-we-can-learn-from-
netflix-s-marketing-strategy
• How Netflix Uses Analytics To Thrive
https://bit.ly/2l99A8q
• www.Netflix.com
• www.Hoffman.com
• What Netflix Could Teach Hollywood
David Leonhardt -
https://www.nytimes.com/2006/06/07/technology/07leonhardt.h
tml?ex
• How Netflix Works
Tracy Wilson-Stephanie Crawford –
https://bit.ly/2l81Ljj
• Radical Business Model Transformation: Gaining the Competitive
Edge in a Disruptive World – book by Linz, Carsten, Müller-Stewens,
Günter, Zimmermann, Alexander
Saman :
In 1997, a thirty-something man whose resume included software geek, education reformer, and movie buff rented Apollo 13 from the biggest video-rental chain on the block— Blockbuster— and got hit with $40 in late fees.
That dent in his wallet got him thinking: why didn’t video stores work like health clubs, where you paid a flat monthly fee to use the gym as much as you wanted? Because of this experience— and armed with the $750 million he received for selling his software company.
*****************cut the extra part from video store picture( people reached, boost post part)******************************
That man, ladies and gentlemen, was Reed Hastings.
Now, you might know him as the he is the co-founder, Chairman and CEO of a “small company “ called NETFLIX.
My name is Saman Chhabra, and allow me to tell you the story of how Netflix exemplifies true excellence through its focus on “CUSTOMER VALUES AND RELATIONSHIPS”
Now, lets move ahead to 2007, the time when the now , “not so small “ company Netflix was delivering their Billionth DVD.
But 2007 was a turbulent year for Netflix, it’s when Analysts began to predict that video on demand , nowadays known as VOD , could pose a major threat to the online DVD rental business in the future. The analysts were saying that this current trend this would disrupt their successful business model ,that the internet television would replace linear television, and that apps would replace television channels and that screens would proliferate.
Also, Netflix showed a drop in DVD Rental sales in 2006.
Problem ********
In response to that, on January 15,2007, the now DVD Rental Giant announced that it will be launching a new online video streaming service.
Netflix came up with the idea that would change the way we watch everything!
In a question related to the company’s bold move, the Hasting said , ” Its why we named the business Netflix and not DVD by mail”.
He said that Netflix’s purpose was defined as allowing its customers the best “home viewing”, and not delivering DVD’s to people in a red envelope.
So, to implement that, Netflix started investing heavily in new technology, from $10 mil in 2006 to almost $40 mil in 2007 and they only increased the numbers from there.
Now, to know more about how Netflix used data and analytics to improve its customer services, I would like to invite Ola to the stage
Ola :
Good evening everyone,
They collected old data and translate that to their platform. The faster the platform is able to recommend to its viewers what they should watch, the better the user experience.
When the company was just a DVD-mailing business, they had just four data points to analyze that included customer ID, movie ID, rating and the date the movie was watched. Once they transitioned to a streaming service, a lot more data was available to review.
Netflix uses algorithms to process information
The first algorithm behind the recommendation system was Cinematch. It was successful at predicting movies that ustomers like and it was accurate 75%. Customers were satistfied by giving this system 5 star rating.
The algorthim and statisticswere used to match movies with each other rather than matching people to movies
(NF hired mathematicians with programming experience to write the algorithms and code.)
Therefore, the company’s analysis has found that a typical Netflix customer will lose interest in 60 to 90 seconds when choosing something to watch. In that time, they view 10 to 20 titles.
Also, interestingly, 80% of the content we watch on Netflix is influenced by the company’s recommendation system.
And, If people truly dislike a movie, they would turn it off well before they get to the 70% threshold.
Hence, having knowledge like that, gave Netflix a competitive edge, no other company in the world had.
Netflix will often recommend movies that fit the customer’s preference profile but that aren’t in high demand.
According to one article in the "New York Times," this recommendation system has significantly changed people's movie preferences. It has given independent releases and films that did not succeed at the box office a wider distribution .
Coming to customer services offered by Netflix through data collection,
Netflix offers excellent customer service, it customises the conversation based on the customer most recent movie they watched. The Vice president of global CS in the company said once that: "We really allow support agents to be themselves,“
Saying that, I would now like to invite Chris to the stage and offer his insights on the marketing tactics used by Netflix through its platform.
To counter that, Netflix started using new marketing tactics to lure new customers to its platform.
This was a NETFLIX Ad showing its integration between DVD rentals and VOD.
Also, Netflix introduced exciting offers like :
Let customers use streaming service naturally -
1. One Hour for Every Dollar (offering both service: DVD, VOD /at launching stage)
So if you had the $9.99 plan
Offered one hour for one dollar
2. Omni channel – consistent interface in multi device -> preference recommendation applied
Moreover, Customers could watch a TV show or movie on a computer, TV screen, tablet, phone or gaming device. Offering programming on-demand made it superior to physical stores and television in many ways, as consumers were able to watch what they wanted, when they wanted and how they wanted – without being limited to a certain time frame or even to return a DVD in the mail.
own.
*************************************************************Chris : explain above In own word **************
Also, In 2013, Netflix began competing with TV networks and cable directly for original content. Its terms were generous. While most networks only approved shows based on pilots hitting certain numbers, Netflix offered series producers and showrunners upfront contracts to create an entire season or two.
House of cards
As a result, many of the most critically acclaimed and popular new series came out on Netflix instead of the established networks, including "House of Cards," "Orange Is the New Black" and "The Crown.
To conclude, From relatively humble beginnings as a DVD-by-mail service, Netflix has grown into one of the most influential media streaming services in the world. The company was one of the first to see the potential of streaming technology and began to transition to a subscription video-on-demand model in 2007. Since this transition, annual subscriber base from 7 million to 155 million(2019) globally. That means that Netflix makes up nearly 30 percent of all video subscriptions in the World.
**********************graph not going till 2019******************, please rectify
Now that ladies and gentlemen, teaches us marketers why creating content marketing ,Utilizing data to your advantage, adapting to changing technologies and consumer demands can also make you an expert in “customer values and relationships”.
Friends, this is the story of how Netflix truly exemplifies Customer Value / Relationship in its core.
