this is the analysis of the situation faced by Netflix in 2011. The major reasons being sudden price hike and lack of communication between company and consumers.

1. NETFLIX: The Public Relations
Box Office Flop
Presented by-
Kuhu Pathak
Abhijeet Thorat

2. Case Synopsis-
• The world’s largest internet subscription service for watching
movies and TV instantly with more than 25 million members
worldwide.
• Netflix is revolutionizing the way people watch movies and TV
shows by streaming directly to them.
• Netflix has become the preferred online provider of the
entertainment experience in the U.S.A.

3. • Netflix streams on:
• Microsoft
• Xbox 360
• Nintendo Wii
• Sony PS3 console
• Blu-ray disc players
• Internet-connected TVs
• Home theater system
• Internet video players: Apple iPhone, iPad and iPod touch, Android devices, as well
as Apple TV and Google TV.
• During the first quarter of 2011, sales and rentals of packaged DVDs and
Blu-ray Discs plunged about 20 percent, and the sell-through of packaged
discs fell 19.99 percent to $2.07 billion, with more money spent on
subscription rentals than in-store rentals

4. Fast facts
Spilt into two companies.
Increased prices 60%.
In 2003, 1st Operating profit achieved.
Focused on Content Online Streaming.

5. 1997- Reed
Hastings & Marc
Randolph
founded Netflix
1999- Change of
plans-Monthly
fee
2000- 300,000
subscribers(but
still in losses)
May 2002-
released IPO
2003- 1st
operating profit
2007- 1 Billionth
DVD rented
2010- Global
Expansion
2011, Sept-
Prices Increased
60%
2011, Qwikster
Timeline-

6. Lack Of
Communication
Price Increase
Response time
Lack of comparable selection
between DVDs by mail and Instant
Stream
Customer’s
dissatisfaction
Not developed
business strategy
Brand Image
Degradation

7. Netflix statistics
0
5
10
15
20
25
2007 2008 2009 2010
Members In millions
0
20
40
60
80
100
120
140
160
180
2007 2008 2009 2010
Net Income in $million

8. Recommendations: Alternative Business
Models
Bundle
services with
pay-tv
packages.
Less money from
more customers =
Revenue boost
Less competition =
Lower licensing fees
Customers
sign up for
service
directly on
AppleTV & pay
through
iTunes.
Reach more
customers = Revenue
boost
Partner with
gaming
companies to
offer on-
demand video
game services.
New customer
segment = Revenue
boost
Develop “HBO
quality”
original
content.
Lure & retain
customers with
content that’s
untouchable by
competitors =
Revenue boost

9. Conclusion
• Customers still enjoy Netflix capabilities
Mostly good feedback
Netflix performs well against competitors
Supporters create social media buzz
• Price, prompt delivery, communication method
Main obstacles: