Netflix Swot

Can you name the largest online entertainment subscription service? If you said “Netflix” then you are correct. Netflix started in 1997 by Reed Hastings and the subscription service started in 1999. The company headquarters is based out of San Francisco, California. There are over 100 shipping location in the United States. Netflix offers over 100,000 DVD titles and over 8,000 that are ready to be watched instantly on a subscribers PC. Netflix has over 1500 fulltime and 1100 part time employees at their headquarters and shipping centers. This had made Netflix the top ranked e-commerce company in customer satisfaction and that is causing a rapid growth in subscribers, revenue and earnings.

How does it work? First, sign up create your movie list at NetFlix.com. Next, Netflix will rush you movies from your list. Then, watch the movies at your convenience. There is not due date or late fees. And finally, once you have viewed your movie return it to Netflix and get another movie from your list. More that 95% of subscribers live within 1 business day delivery. Netflix delivers over 1.8 million DVD’s each day.

Here are a few Netflix facts. Netflix allows customers to rate the movies. There are over 2 billion reviews currently on the website. Members add over 2 million movies to their queues every day. Most members say they rent twice as many movies per month than they did prior to subscribing to Netflix. 90 % of Netflix subscribers say they would recommend Netflix to friends and family. Within one week, if you stacked every movie Netflix ships, the stack would be higher that Mt Everest (that’s over 1.8 million movies a day). Netflix is concerned about the environment. It is estimated that if Netflix members had to drive to a brick and mortal rental store they would use 800,000 gallons of gas and release over 2.2 million tons of carbon dioxide emissions annually.

Netflix has been named the #1 retail Web site for customer satisfaction for six consecutive surveys since 2005 by ForeSee Results. In the fall of 2005, Fast Company named Netflix the winner of its annual Customers First Award. In January 2007, Netflix was named the Retail Innovator of the Year by the National Retail Federation. (www.netflix.com)

According to Netflix most recent SEC 10K report here is Netflix’s core strategy and marketing strategy:

Our core strategy is to grow a large DVD subscription business and to expand into Internet-based delivery of content as that market develops. We believe that the DVD format, along with its high definition successor formats, including Blu-ray will continue to be the main vehicle for watching content in the home for the foreseeable future and that by growing a large DVD subscription business; we will be well positioned to transition our subscribers and our business to Internet-based delivery of content. In January 2007, we introduced our instant-watching feature for PCs. We intend to broaden the distribution capability of our instant-watching feature to other platforms and partners over time. In January 2008, we announced a development arrangement with LG Electronics. While the terms of this arrangement have not been finalized, we anticipate developing, in conjunction with LG Electronics and other consumer electronics’ manufacturers, a set-top box device or other devices that will enable our instant-watching feature to be viewed directly on subscribers’ televisions.

We use multiple marketing channels through which we attract subscribers to our service. Online advertising is an important channel for acquiring subscribers. We advertise our service online through paid search listings, banner ads, text on popular Web portals and other Web sites and permission based e-mails. In addition, we have an affiliate program whereby we make available Web-based banner ads and other advertisements that third parties may retrieve on a self-assisted basis from our Web site and place on their Web sites. We also advertise our service on various regional and national television and radio stations. We utilize direct mail and print advertising to promote our services in certain consumer packaged goods. We also participate in a variety of cooperative advertising programs with studios under the terms of which we receive cash consideration in exchange for featuring the studios movies in Netflix promotional advertising. We believe that our paid marketing efforts are significantly enhanced by the benefits of word-of-mouth advertising, our subscriber referrals and our active public relations programs. (www.sec.gov/netflix)

Next is the SWOT part of the paper. This information was taken directly from the Netflix.com website.

Strengths:

пÑ"? Being an on-line DVD rental store, Netflix combines the growing Home Entertainment Market and the Internet. Unlike brick-and-mortar video rental business, Netflix incurs less overhead because no storefront is required and less employees are hired. Movies are sent to customers in prepaid envelope within 24 hours after the customer returns a movie. Located in San Francisco, Netflix still owns nationwide market through World