Netflix

Netflix, Inc. is an American pay television over-the-top media service and original programming
production company. It offers subscription-based video on demand from a library of films and
television series, 40% of which is Netflix original programming produced in-house. Netflix has also
played a prominent role in independent film distribution. As of October 19, 2021, Netflix had 214
million subscribers, including 74 million in the United States and Canada, 70 million in Europe, the
Middle East and Africa, 39 million in Latin America, and 30 million in Asia-Pacific. It is available
worldwide except in mainland China (due to local restrictions), Syria, North Korea, and Crimea (due
to US sanctions). Netflix is a member of the Motion Picture Association (MPA).

Stakeholders= organizations, groups and that can affect or are affected by a firm’s acctions.

A stakeholder is a party that has an interest in a company and can either affect or be affected by the
business. The primary stakeholders in a typical corporation are its investors, employees, customers,
and suppliers.

Stakeholder analysis is the process of identifying an organisation’s stakeholders and their interests,
assessing their influence, or how they are impacted by the organisation, so as to formulate strategies
for managing relationships with them.

Internal stakeholders of Netflix

The main internal stakeholders of Netflix are the members of the leadership team, employees, and
shareholders. The key figures in the leadership team are the founder and co-CEO, co-CEO and chief
content officer, and chief officers in different functions such as marketing, legal, finance,
communications etc. A number of the vice presidents of different functions and regions also play a
big role in the success of the company.

Stoll (2021) reports that Netflix has around 9,400 full-time workers. These employees work in one of
the four teams within the company i.e. product, marketing and publicity, content, and corporate
functions. The success of the company hugely depends on its ability to hire the best people who can
research and develop cutting-edge solutions to the problems it is faced with.

Netflix and many of its contents often highlight the experiences of people from underrepresented
backgrounds; however, recent controversy concerning Dave Chappelle’s comedy ‘The Closer’ has
affected its image as a diversity champion (Ward, 2021).

Institutional shareholders hold a major ownership of Netflix. However, the company has many
individual shareholders as well. Shareholders have financial interests in the company, and therefore,
Netflix needs to keep them informed regularly.

External stakeholders of Netflix

Netflix focuses a lot on the original contents. However, to remain competitive and achieve more
customer satisfaction, it is looking forward to licensing more contents from independent producers.
These independent producers and distributors may play a big role in the success of the company in
the future.

The main competitors of Netflix are Amazon Prime Video, HBO Max, Paramount+, Hulu, Disney+, and
Apple TV. Netflix needs to monitor their activities and contents regularly to ensure that it has the
contents and other resources to gain competitive advantage.

Today, Netflix’s executives might say that the goal of the company is to become the largest

producer and distributor of television shows and movies. In order for Netflix to succeed at

this goal, the company needs to be able to offer engaging content to its subscribers who

come to the company’s website for content. A corollary goal to this primary goal is to keep

those subscribers on the website without getting distracted and dropping off to another

website or source of entertainment.

There are several critical challenges that Netflix faces in pursuit of its primary business

goals. One key challenge is streaming quality and the required supporting infrastructure;

consumers today are increasingly intolerant of slow or poor quality video streaming, and

Netflix has had to invest a lot into its streaming infrastructure to support high quality

and fast performance.

Another key challenge is that consumers are fickle. A subscriber visiting Netflix’s website

at any given time may be in a specific mood or have a specific need that is different the

moods or needs indicated in that same user’s past behavior. Being able to provide relevant

content recommendations for its users, even as their desires are constantly changing, is a

critical challenge that Netflix must solve in order to be successful in its primary goal.

One of the advantages Netflix has in the face of these challenges and increasingly tight

competition in the video streaming marketplace is that it knows a lot about consumer

preferences for movies and television shows. Its access to data on these consumer
preferences is a competitive advantage—and this is often the case for data-driven internet

companies.

Other media groups are starting to catch on to Netflix’s advantage when it comes to

consumer data. The relationship that Netflix has with competitors in the content creation

space has evolved over time as the company’s business model has evolved; initially, content

creators viewed Netflix as a way to access customers. As the dynamics of the media

streaming industry changed, however, and Netflix moved into the content creation

business, those initial partners started to view Netflix as more of a competitor. Industry

dynamics are constantly evolving across the entire market, and data-driven internet

companies are often key contributors to those shifting dynamics.

Netflix is beholden to a variety of stakeholders as a business; to understand the challenges

and advantages of their business model, it’s important to examine who those key

stakeholders are and what their interests and needs are. Netflix’s primary stakeholders are

its customers, the subscribers who pay for its streaming service—and these will be the

focus of this class’ discussion.

Netflix is also beholden to its shareholders, as any publicly traded company is. Another

key group of stakeholders are independent producers of content. This group values their

relationship with Netflix particularly strongly, because Netflix provides them access to a

wider audience in a way that traditional movie theaters and television might not.

On the infrastructure side, Netflix is beholden to Internet service providers and must work closely

with this group to deliver content more quickly and at high quality. Infrastructure for a

streaming company like Netflix is particularly intensive—a large percentage of the world’s

internet traffic is related to video streaming.

Finally, Netflix must continue to attract and retain another key group of stakeholders: its

employees. Its competitive advantages in the market are dependent in part on its ability

to attract the best developers, engineers, and researchers to continue to develop cuttingedge
approaches to the big technical problems it has to solve to achieve its goals. These problems include
not only infrastructure challenges but also the development of

recommendation and search algorithms.

1. High brand equity of Netflix

2. Large platform of content producers and consumers

3. Capacity for original content creation

Weaknesses:

1. Imitable business model

2. Dependence on content producers

3. Dependence on Internet service providers

Opportunities:

The market is continually changing with increased demands, which helps any company aspiring for
substantial growth. The need for OTT platforms is also rising, which is a good sign for Netflix. So,
some of the significant opportunities that the firm can grasp from the current market are:

As Netflix has a brand reputation, the great demand for OTT platforms in the current market can
allow the brand to expand.

Since Netflix is signing up for exclusive Netflix-only content, they can bring in other product lines,
including video games, comic books, and more.

Netflix is already a global presence. They can strengthen their subscriber base by a strategic
partnership with local markets that will help them to capture the local market.

The company can choose to work on new concepts that are better than other OTT platforms. Netflix
has already said no to the traditional advertising-based business model, which is an opportunity for
them to provide good customer service.

Threats:

For all the companies in the market, there are specific threats. The market has several OTT services,
and the customers may choose based on their parameters. Therefore, excelling in almost all the
possible parameters can be a solution to retain the position as the best. Even in that case, the
companies may have to face the threats posed in the way of their expansion. As one of the biggest
OTT companies, Netflix is not an exception. So, the threats and risks that Netflix is exposed to are:

COVID-19 has affected the reproduction of new original shows and movies. Like most parts of the
entertainment industry, Netflix is also affected by the pandemic. Gradually with normalization, the
condition will improve.

The government regulations in certain countries can hold them from expansion.
Netflix is suffering majorly from content piracy. Many people choose to watch the pirated version of
the original series available without paying, threatening the company.

Another reason for fewer customers for Netflix is that many people share one account
simultaneously.

How is Netflix ethically responsible?

While dealing with the community, it has ventured by providing charities and student scholarships.
Netflix corporate social responsibility is aware of the same, and thus it is involved in organising food
drives in the local communities, donating food and emergency relief funds to the needy.

What are Netflix legal responsabilities?