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ABSTRACT When you're finished changing you're finished Benjamin Franklin Netflix Inc is an American provider of on demand internet streaming media and flat rate DVD by mail supplier Netflix s business model is of providing service as a core product Online streaming service and DVD delivery service are the two main product lines for Netflix Netflix Inc 2016 Netflix is choosing to outcompete rivals based on differentiation by offering a wider product selection Netflix is working to make a portfolio of movies and shows which will attract and retain viewers This paper talks about the strategy adopted by Netflix to invest in producing original content and through it its revenue growth will outpace cash burn rate allowing them to leap ahead of its competitors and cross the chasm successfully BACKGROUND Netflix is the world's top internet streaming TV network having a presence in 190 countries This service is provided with a monthly fee and content is aired without commercials The greatest expense for Netflix is securing licensing agreements with TV networks filmmakers and other content owners 



In early 2015 Netflix revealed that its budget for obtaining new licensing deals and renewing expiring arrangements for exclusive and non exclusive content would exceed 6 billion through 2018 Investopedia 2015 Netflix started producing original programs by investing billions of dollars a strategy that steers the focus away from the need for content licensing So far it is successful in introducing multiple series including House of Cards Stranger Things and Orange is the New Black This focus has helped them to stand out in the marketplace Segmentation Netflix s market is very dynamic and constantly changing in response to changes in technology and consumer behavior Segmenting in this market is not measurable and actionable due to highly diverse nature of the customer who varies in age income geographic area and watching preference Targeting Netflix target a mass market of consumer who pays an online streaming subscription of TV shows and movies aiming to have the biggest market share with the highest number of subscribers Positioning Customer s top priority is content availability ease of use reasonably priced suitable to the individual taste of the video streaming and high selection of titles EVIDENCE By producing its original content Netflix does not require to license shows from other networks With hits like House of Cards Netflix has cemented its position as a go to place for all streaming content Through extensive research and development in the content suggestion and referral algorithms customers can find movies easily thus ensuring a high level of customer satisfaction 



Over the years the share price has been rising giving investors value of their investments Graph 1 shows the share price for past 5 years which has been on the rise Yahoo Finance Netflix s pioneering practice of buying up an entire season of a series without requiring a pilot is luring writers actors and producers to work with them In October Netflix announced it added 5 3 million more subscribers around the world bringing its total subscriber base to 110 million Kafka 2017 It is a clear leader in the media streaming sector and at the same time people are migrating from other modes of watching television and movies Netflix s company culture encourages innovation at every level Employees who performing are rewarded with more responsibilities and greater pay Thus attracting greatest talent towards it This has helped Netflix to make the list of World s most innovative companies RECOMMENDATIONS To further increase its presence in the streaming business Netflix should focus implementing Live Television into their portfolio Online streaming of live sports is a big market to capture The study shows between 21 6 and 22 4 of all fans in Major North American Sports Leagues spend between 1 and 4 hours a week on an internet search for the sports news and clips Sports Business Daily 2010 This will further increase its customer reach The second action that Netflix could do is focus on the international market Netflix now streams its services in 190 countries but only shows content made for the American audience


There are few shows which belong to that market but their number is too less Netflix could start making original content for these markets as well Asian countries like India Japan Korea is the next global opportunity for Netflix Due to a large population Netflix could potentially gain a lot of subscribers which would increase the revenue CONCLUSION Overall Netflix had effectively made use of eight modes of communication Marketing communications mix which includes advertising sales events public relations and publicity interactive marketing direct marketing personal selling etc Philip Kotler 2014 The cornerstone of holistic marketing concept is customer relationships and Netflix has succeeded in building mutually long term relationships Therefore they will be able to break even the cost of investment for producing new content by having a high number of paying subscribers To successfully cross the chasm Netflix focused on their online streaming web customers niche marketing and then slowly win dominance over the firms like Sony Samsung to include its application in their devices to reach millions of more customers Netflix used them as a springboard to capture the online streaming market and now with its own content moving ahead and creating an entry point in the larger segment


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