ASSIGNMENT E- BUSINESS E BUSINESS ENTITY: NETFLIX

Submitted To, Ms. M V Monica Dept.of Management Studies ASIET, Kalady.

Submitted By, Joel George Varghese S2 MBA Roll No: 22 ASIET, Kalady.

CONTENT
Sl.No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 PARTICULARS INTRODUCTION SERVICES COMPETITORS BUSINESS LEVEL STRATEGY REVENUE GENERATION MODEL URL, IP ADDRESS SECURITY POLICY PRIVACY POLICY PAYMENT METHOD 4 Ps VALUE OF FIRM MARKET SHARE CAPITAL LISTED FIRM ORGANIZATIONAL CHART REFERENCE

NETFLIX

Netflix, Inc., (NASDAQ: NFLX) is an American-based provider of on-demand internet streaming video in the United States and Canada, and flat rate DVD-by-mail in the United States. The form of organization is public. The company was established in 1997 and is headquartered in Los Gatos, California. It started its subscription service in 1999 and by 2009 it was offering a collection of 100,000 titles on DVD, surpassing 10 million subscribers. On February 25, 2007, Netflix announced the billionth DVD delivery. In the summer of 2011 Netflix announced they will expand into the international market, starting in Spain by 2012. Netflix was founded in 1997 in Scotts Valley, California by Marc Randolph and Reed Hastings, who previously had worked together at Pure Software, along with Mitch Lowe. Hastings was inspired to start the company after being charged late fees for returning a rented copy of Apollo 13 after the due date. The Netflix website launched in April 1998 with an online version of a more traditional pay-per-rental model (US $4 per rental plus US $2 in postage; late fees applied). Netflix introduced the monthly subscription concept in September 1999, then dropped the single-rental model in early 2000. Since that time the company has built its reputation on the business model of flat-fee unlimited rentals without due dates, late fees, shipping or handling fees, or per title rental fees.

Netflix developed and maintains an extensive personalized video-recommendation system based on ratings and reviews by its customers. Netflix has played a prominent role in independent film distribution. Through a division called Red Envelope Entertainment, Netflix licensed and distributed independent films such as Born into Brothels and Sherrybaby. Netflix has been one of the most successful dot-com ventures. A The New York Times article from September 2002, said that, at the time, Netflix mailed about 190,000 discs per day to its 670,000 monthly subscribers. Netflix's growth has been fueled by the fast spread of DVD players in households; as of 2004, nearly two-thirds of U.S. homes had a DVD player. Netflix capitalized on the success of the DVD and its rapid expansion into U.S. homes, integrating the potential of the Internet and e-commerce to provide services and catalogs that brick and mortar retailers could not compete with. Netflix also operates an online affiliate program which has helped it to build online sales for DVD rentals. Services Netflix is a subscription-based movie and television show rental service that offers media to subscribers via Internet streaming and via US mail. Netflix offers Internet video streaming ("Watch Instantly") of selected titles to computers running Windows or Mac OS X and to compatible devices. Internet video streaming comes at no additional charge with Netflix's

regular subscription service; however, only a portion of Netflix's content is available via the "Watch Instantly" option. Competitors Netflixs primary competitors are Blockbuster and Comcast. These two companies have online and cable video-on-demand capabilities, making them threatening entities in terms of video rentals that can be viewed immediately. DVDs come standard, so the way that DVD rental companies have to differentiate themselves is through unique services. Although WalMart and Best Buy have relatively large market shares, they do not operate in rental services via the Internet, nor do they have video-on-demand services. Thus, we do not include them as primary competitors given Netflixs strategy of moving towards rentals through streaming video capability. Having been founded 12 years prior to Netflix, Blockbuster has been an existing competitor within the industry. Although Blockbuster has more of the market share than does Netflix, it saw negative sales growth from 2005 to 2008. Although Blockbuster has failed to create a sustainable strategy in which it can compete in streaming video, cable providers such as Comcast and Time Warner are increasing their video-on-demand subscribers. Netflix has to worry about this capability. Thanks to On-Demand features, these firms have the potential to steal market share from Netflix. With On-Demand, customers do not have to wait a whole business day to receive movies in the mail as they did with Netflixs primary business model. Now that Netflix is moving into the streaming video category, it is becoming more of a direct competitor with such cable providers. Business level strategy Netflixs business level strategy is on the physical distribution of movies and television titles to the consumer, whereas on a corporate scale Netflix hopes to make a push into the streaming market by introducing more titles for the consumer to have access to. When looking through Netflix VRIO they realized that Netflix has a sustainable advantage when it comes to their ability to physically distribute their titles in a new and innovative way that creates added customer service. They also have the upper hand when it comes to online streaming of content because they are the first movie distribution means that can stream directly onto their game console, computer and television. Netflix is currently positioned to make long and short-term moves in the streaming market once they gain access to more titles. This will add to consumer retention as well as bring in more consumers who will now have move access to movies than just the previous means of physical distribution. Revenue Generation Model Netflix has partnered with the Google Affiliate Network to administer their affiliate revenue going forward. If you already have a Linkshare account, you are aged to migrate their links to the Google Affiliate Network as soon as possible so that their revenue stream continues. This partnership offers better tracking on their side, as well as deep linking to any page within the Netflix site so that their developers can provide a more customized user experience.

URL www.netflix.com IP address 208.75.76.17 Security Policy Netflix takes information security very seriously and uses reasonable administrative, technical, physical and managerial measures to protect their personal information from unauthorized access. For example, they utilize Secure Sockets Layering, an industry-standard protocol for certain of their transmissions to us, in order to encrypt the personal information that you send to us through the registration and sign up process. They store their email address and payment method information in an encrypted form. In order to provide you with ease of access to their account and to help administer the Netflix service, Netflix implements technology that enables us to recognize you as the account holder and provide you with direct access to their account without requiring you to retype any password or other user identification when you revisit the Netflix service. Unfortunately, no security system can be guaranteed to be 100% secure. Accordingly, they cannot guarantee the security of their personal information and cannot assume liability for improper access to it. By using their service, including their website and user interfaces, or providing personal information to us through any means, you agree that they can communicate with you electronically regarding security, privacy, and administrative issues relating to their use of the Netflix service. Privacy Policy Privacy Policy explains their policy regarding the collection, use and disclosure of their personal information. As we update and expand their services, this policy may change, so please refer back to it periodically. By accessing their website or otherwise using their service, you consent to their information practices. Personal information means information that can be used to identify and contact you, specifically their name, postal delivery address, e-mail address, payment method (e.g., credit card, debit card, or other payment method accepted on their website) and telephone number, as well as other information when such information is combined with their personal information. The Netflix website contains links to sites operated by third parties whose policies regarding the handling of personal information may differ from ours. While we endeavor to associate with reputable websites, Netflix cannot be responsible for the information handling practices of these other websites. These linked websites have separate and independent privacy statements, notices and terms of use, which we recommend you read carefully.

You must be 18 years of age or older to subscribe to the Netflix service. While individuals under the age of 18 may utilize the service, they may do so only with the involvement of a parent or legal guardian, and subject to theirTerms of Use. While Netflix does distribute products that may be watched by children, we do not intentionally seek to collect information from individuals 13 years of age and younger nor do we knowingly collect personal information from children under 13 through the service. Payment method The original payment method was a pay-per-rent system. It costed $4 to rent a movie and a $2 shipping charge for a seven day rental with the option of an additional fee to keep the movie longer. Netflix promised to have at least 1000 copies of new releases ready to be shipped the day that the movie was avaliable in stores and gave members the option to reserve a copy in advance. The new releases were also offered at a 30% discount of the original price to rent. September, 1999 was when Netflix first started offering the option of a monthly flat-rate fee for movie rentals. In early 2000, Netflix changed the payment system to a universal monthly flat-rate fee with unlimited rentals, no due dates and no late fees. This is the payment type that all members have for Netflix to the present day. The company continues to grow at an exponential rate and is predicted to reach the 3 billion mark for DVDs and Blu-Rays delivered sometime in 2010. 4Ps Price Instantly watch up to 2 hours of movies & TV episodes online on your PC or Mac. All envelopes are prepaid by Netflix, which adds no extra hidden costs to the consumer. Netflix spends an average of $300 million on postage per year. Product Netflix has DVD and Blu-ray discs of new releases, classics from all genres and time periods, and TV series. Anytime streaming of a variety of new releases, classic movies, and TV series, directly to your computer, television, or gaming consol. Netflix is continuously working with studios to add more titles, including the deal with Warner Bros., which will increase the number of titles Netflix has to offer. Promotion Netflix began with extensive advertising campaign in many different mediums. They have taken advantage of newspaper/magazine advertising, TV commercial advertising, and online advertising. Web banners, ads on various websites, and pop-under ads are their most prominent form. These ads appear underneath the website one has recently visited, and have actually had a negative response from consumers (Kaltschnee, 2009). As Netflix has experienced significant popularity and recognition, there has been a drop in advertising

campaigns. It now relies heavily on viral marketing. In a survey conducted by Neilsen Online and ForeSee/FGI Research, over 90% of surveyed subscribers say that they would recommend Netflixs+ services to a friend. (Netflix Corporate Fact Sheet). Place Netflix is primarily a US business. Recently in 2010, Netflix has announced that they are going to be moving into the European market as a streaming only service. PCs, Internet streaming, and DVD and Blu-ray discs. Valuation of Netflix Netflix can best be valued using a Net Present Value (NPV) valuation. This technique is most responsive to growth in firms, which is generally a good indicator of a firms true value. The major fallback is that the valuation relies heavily on predictions about growth in the firm. Market Share

Sales

Blockbuster Netflix

Other Comcast Time Warner

Capital Authorized Capital: 90,000,000 (80,000,000 shares of common stock and 10,000,000 shares of preferred stock), par value $0.001, to 170,000,000 (160,000,000 shares of common stock and 10,000,000 shares of preferred stock), par value $0.001. Listed firm Listed in NAZADAQ. Stock Code is NFLX. Stock quote is $ 261.62

REFERENCE 1. www.netflix.com 2. Netflix press release-Oct 20, 2010 3. http://files.shareholder.com/downloads/NFLX/1288233725x0xS1193125 -0435647/1065280/filing.pdf 4. http://www.ip-adress.com/whois/netflix.com 5. http://www.google.com/finance?client=ob&q=NASDAQ:NFLX