Netflix Earnings Per Talk about 2011: $6. 15
Shih W & Kaufman S. S Netflix in 2011
Abstract:
This event study examines Netflix's business model plus strategy in 2011. The company had become a prominent player in this online video internet streaming market, but it was facing increasing rivals from the two classic media companies plus new traders. Netflix needed to find ways to continue growing it is business and keeping its competitive advantage.
Claim Study:
Netflix was basically founded in 1997 as a new DVD-by-mail rental service. In 2007, the organization launched it is on the internet video streaming service, which rapidly started to be its primary enterprise. By 2011, Netflix had over 20 million clients in addition to was producing more than $2 billion in annual earnings.
Netflix's enterprise model was based on a new subscription fee that offered users unrestricted access to the streaming library. The company also supplied a DVD-by-mail service, nevertheless this was getting increasingly less famous as more and more people turned to streaming.
Netflix's method was to concentrate on offering a wide variety involving content, like the two licensed and initial programming. The organization also spent greatly in technology to improve the quality of their streaming service.
In 2011, Netflix was facing growing competition from equally traditional mass media organizations and new traders. Traditional media companies such as Comcast and Time Warner were launching their particular own streaming solutions, while new traders such as The amazon online marketplace and Hulu have been also gaining marketplace share.
Netflix needed to be able to find techniques in order to continue growing it is business and maintaining its reasonably competitive edge. The company would this by simply increasing its content library, investing in technologies, and raising price ranges.
Content Library:
Netflix expanded the content material library by license more content by major companies and by creating their own original coding. In 2011, Netflix released their initial original line, " House of Cards, " which was a critical and commercial success.
Technology:
Netflix put in heavily in engineering to improve the quality of the streaming assistance. The company created new video compression codes that granted this to stream higher-quality video in lower bitrates. Netflix in addition invested in a new cloud facilities that permitted it to size their service a great deal more easily.
Pricing:
Netflix raised prices in 2011 in get to cover this cost of their purchases in content material and technology. The particular company also presented some sort of new tier of service that presented higher-quality online video and more simultaneous streams.
Conclusion:
Netflix's strategy in 2011 was successful. The particular company continued in order to develop its enterprise and maintain the aggressive advantage. Netflix's assets in information, technologies, and charges assisted the firm to weather the increasing competition and even emerge as this head in the particular online video internet streaming market.
Discussion Queries:
- What were the key elements of Netflix's company model in 2011?
- Just what were the issues facing Netflix in 2011?
- How did Netflix respond to these types of challenges?
- What are this implications of Netflix's success for the particular future of typically the online video internet streaming market?