Big Data Analysis: Netflix
PROBLEM STATEMENT:
How can Netflix increase its revenue and generate more profit in the Online Video Streaming segment by leveraging on its big data technology?
BACKGROUND:
• Started in the year 1997 by Marc Randolph and Reed Hastings
• Netflix had invested highly on Big data analysis
• Netflix used this as a disruptive technology in order to understand and analyse the customers
• The company made use of Big data to recommend movies and TV shows which were suitable for its subscribers
• .Hence, Netflix had access to tons of data of its customer preferences because of which the company had huge advantage compared to its competitors but faced a lot of legal problems
• .The implementation of Big data lead to multiple benefits …show more content…
In order for them to maintain their leadership, they should keep innovating and hence it is necessary for Netflix to invest more in Big data. For example, they could add a social experience in the website where the recommendations were not only from the programs you watched but also from programs currently watched by your friends
OPTION 3: Increase Membership …show more content…
All the new subscribers should be charged a $1 or $2 increase, depending on the country. The company can build loyalty by providing the existing members with the current pricing (e.g., $7.99 in the US) for a generous time period. These changes will enable Netflix to acquire more content and deliver an even better streaming experience, thus, going ahead of its competition
PORTER’s FIVE FORCES:
Threat of new entrants – High (Amazon, Youtube)
Threat of substitutes – High (Apple TV, Hulu)
Intensity of rivalry – High (HBO, low entry barriers)
Bargaining power of customers – High (a lot of choices available)
Bargaining power of suppliers – High (Content is key USP)
Threat of all five forces is high. Power of suppliers and customers are especially very high. Hence, Netflix is has so many constraints binding it and it has to choose an alternative which will take it 2 steps ahead of the competitors,
RECOMMENDATION:
In order for Netflix to stay ahead of the competition, it has to stick to its ideology and should keep innovating. Hence, OPTION 3 will be the most suitable alternative.
How can Netflix increase its revenue and generate more profit in the Online Video Streaming segment by leveraging on its big data technology?
BACKGROUND:
• Started in the year 1997 by Marc Randolph and Reed Hastings
• Netflix had invested highly on Big data analysis
• Netflix used this as a disruptive technology in order to understand and analyse the customers
• The company made use of Big data to recommend movies and TV shows which were suitable for its subscribers
• .Hence, Netflix had access to tons of data of its customer preferences because of which the company had huge advantage compared to its competitors but faced a lot of legal problems
• .The implementation of Big data lead to multiple benefits …show more content…
In order for them to maintain their leadership, they should keep innovating and hence it is necessary for Netflix to invest more in Big data. For example, they could add a social experience in the website where the recommendations were not only from the programs you watched but also from programs currently watched by your friends
OPTION 3: Increase Membership …show more content…
All the new subscribers should be charged a $1 or $2 increase, depending on the country. The company can build loyalty by providing the existing members with the current pricing (e.g., $7.99 in the US) for a generous time period. These changes will enable Netflix to acquire more content and deliver an even better streaming experience, thus, going ahead of its competition
PORTER’s FIVE FORCES:
Threat of new entrants – High (Amazon, Youtube)
Threat of substitutes – High (Apple TV, Hulu)
Intensity of rivalry – High (HBO, low entry barriers)
Bargaining power of customers – High (a lot of choices available)
Bargaining power of suppliers – High (Content is key USP)
Threat of all five forces is high. Power of suppliers and customers are especially very high. Hence, Netflix is has so many constraints binding it and it has to choose an alternative which will take it 2 steps ahead of the competitors,
RECOMMENDATION:
In order for Netflix to stay ahead of the competition, it has to stick to its ideology and should keep innovating. Hence, OPTION 3 will be the most suitable alternative.