By Christiana Ioannou
A company that started small so that we could binge and watch
In today’s entertainment world, Netflix is a company that serves 167 million customers globally.
Now that’s an impressive figure! But how did it all start?
Netflix (formerly known as Kibble) appeared to be nothing more than a fledgling DVD rental business whose only fundamental value proposition was its mail-order aspect when Reed Hastings and Marc Randolph founded it in 1997.
Started from $2 to $ 25 billion in 2020: An evolving business model
After two decades, Netflix has grown to become one of the world’s largest television and film studios, with more subscribers than all of America’s cable television channels combined. The company quickly realized that internet streaming was the way of the future and switched to online streaming in 2007.
But how did Netflix proceed from a DVD sales and rental company to becoming one of the largest media company?
Here are three strategies that helped Netflix evolve financially and create a niche in the entertainment world.
1. Extensive collection of original content
2013: A renaissance of streaming original shows.
With hit shows like “Orange Is the New Black” and “House Of Cards,” Netflix has been a trailblazer in developing exciting content for its consumers.
Invest money to make money: Investments that paid off
- One of the factors that contribute to Netflix’s financial evolution is its focus on original content. Netflix has spent the last few years amassing a vast content library than other streaming services.
- Over a year in 2017 and 2018, Netflix invested more than $10 billion on content growth.
- Netflix spent a whopping $13 billion on programming in 2020, with original shows accounting for about 85% of it.
Key takeaway: Original content is what drives the world.
2. Chameleons in the entertainment world: an adaptive approach
They adapt like a chameleon to their customer’s needs.
One of the reasons more and more people are subscribing is that they are good at providing what the customer wants!
Believe it or not, it is the pursuit of relentless customer service by the company that has taken it forward.
- Creating a personalized experience for its members
Netflix’s recommendation engine is excellent at predicting what kinds of movies people would want to watch. As a result, reviews account for 70% of the films added to subscribers’ queues.
The level of personalization encountered by users is what keeps them coming back for more.
Other notable benefits are:
- Users can access 24-7 without any advertisements.
- The audience can view movies and TV shows in high definition.
- There is unlimited access to exclusive Netflix shows.
- The platform allows the users to either turn on notifications or turn them off.
- There is a diverse range of content– educational, fictional, and sci-fi, etc.
Fuss-free and straightforward “Watch Anywhere Cancel Anytime” theory
So, what is the payback for extensive customer satisfaction?
Compared to Netflix’s rivals, such as Hulu and HBO Now, roughly 60% of their users pay for other streaming services, compared to 80% who only pay for Netflix.
3. Netflix’s key partners in the media business
Partnerships are a key to growth.
Netflix has more than 35 business partners that have helped the streaming reach the next level in numbers and countries.
Strategic partnerships have been a win-win for Netflix in the following ways.
- Partnering with Apple
Netflix has made it possible for Apple TV owners to sign up for the service directly.
They could even use their iTunes accounts to pay for the service.
It was an opportunity for Netflix to gain access to Apple’s huge customer base. On the other hand, Apple could provide a variety of content to its customers.
- Netflix targets an audience concentrated in West African nations.
Netflix partnered with the prolific filmmaker in Nigeria named Mo Abudu to create content specifically for consumers in the African countries.
Netflix’s approach to international growth is yet another indication of the company’s ability to build on previous achievements.
- Alliances with other smart TV companies like LG and Sony
The company’s recent alliances with international cellular and cable companies are simply a new way to facilitate exciting marketing deals.
Conclusion: Netflix has reshaped the way we watch TV
In the early years of 2000, Blockbuster was offered $50 million to buy Netflix and all of its assets. Who knew the same company would have a financial incline of $ 238.6 billion in 2021.
The answer lies in the business models and powerful technical strategies that have helped improve the customer/user experience.
We hope this article helps you to dominate and create an impact in your market!
1 Comment