Netflix

Akshay Kavthekar (akshayvk)

Problem● Cable is Expensive

● Want to watch anything, anytime

● Stream on multiple devices

Product

Finances

2013 2014 2015

Total Revenue (in thousands)

4,374,562 5,504,656 6,779,511

Cost of Revenue (in thousands)

3,117,203 3,752,760 4,591,476

Gross Profit (in thousands)

1,257,359 1,751,896 2,188,035

Subscriber Growth

Business Model● Subscription model

● Flat monthly cost

● Make deals with content owners, deliver to you

As a startup● Founded in 1997 by Reed Hastings and Marc Randolph

● Inspired by late fees, started at 50¢ per US rental

● Later moved to monthly subscription

Establishing the Brand● 2000: Blockbuster passes on offer for $50 Million

● IPO’d in 2002 at $15.00 (up 11,471%)

● Started to move to VOD in 2007

Secret Sauce and What’s Hot● Variety to cater to all audiences

● Netflix Originals

● Deals with Major Studios

Reach and Influence

Netflix Originals● Different process from TV networks

● Produced hits: House of Cards, OITNB, Stranger Things

● Won 149 awards w/ 744 nominations

Role of Netflix● Started as DVD rental service in entertainment industry

● Middleman between content and you

● Now becoming content creator

CompetitorsCompany Cost Number of

Subscribers2016 Emmy Nominations for Original Content

$7.99/mo 93 million 54

$7.99/mo 12 million+ 2

$8.25/mo ($99/yr)

54 million+ 16

$14.99/mo 1 million 94

Future Outlook● Deals with major studios

● Expansion into India, China

● Original Content = Success

References● https://en.wikipedia.org/wiki/Netflix

● https://rctom.hbs.org/wp-content/uploads/sites/4/2015/12/netflix-revenue1.png

● https://mic.com/articles/134272/how-does-netflix-pay-studios-what-the-streaming-

giant-does-to-obtain-content#.j0V3KAQox

● http://www.investopedia.com/articles/investing/062515/how-netflix-pays-movie-an

d-tv-show-licensing.asp

● http://money.cnn.com/2016/05/04/media/hulu-subscribers-cable-bundle/

● http://www.investors.com/news/amazon-com-has-more-u-s-streaming-subscribers-

than-netflix/

● http://finance.yahoo.com/quote/NFLX/financials?p=NFLX

Questions?