Introduction
Over the past years, the perception of consuming video content has changed drastically, as the introduction of streaming services facilitated people’s ability to access and enjoy TV, reality shows, and movies. As a pioneer in the streaming service universe, Netflix is rightfully considered one of the most successful and famous companies worldwide. Currently, with more than 220 million subscribers and availability in 190 countries, Netflix is a world-leading company that comprises nearly 50% of the global streaming market (Stoll, 2022). As a large enterprise, Netflix is faced with both opportunities and challenges in maintaining its reputation and growth. Thus, the goal of this presentation is to analyze one of the company’s opportunities to justify its position in the market by creating more user-friendly subscriber options worldwide.
Degree of Alignment
Since its creation, Netflix has been striving to become the most successful streaming service that presents both a user-friendly experience and an extensive assortment of video libraries. Currently, the company pays specific attention to such concepts as customer satisfaction, corporate social responsibility, and accessibility. As a result, Netflix tries to adhere to a customer-oriented business model, implementing a flexible framework of both subscription and content options based on the customers’ preferences and geographical location, prioritizing inclusion and selflessness (Myers, 2021).
SWOT Analysis
As of now, Netflix, while remaining a leader in the streaming segment, is overwhelmed with competition emerging in the field. Streaming services like Hulu, Amazon Prime, HBO, and Disney + are entering the market by presenting content different from the one streamed by Netflix. Thus, to beat the competition, the company needs to elaborate on its opportunities and strengths, including high customer loyalty, brand recognition, leadership, internationalization, opportunities for expansion, own production company, and agility. When focusing on these aspects, the company is likely to eliminate weaknesses and minimize threats such as competition, piracy, and financial risks. For an enterprise as successful as Netflix, the notion of self-awareness is especially relevant.
Market Trends
Subscribers’ loyalty to using Netflix services demonstrates that nowadays, the enterprise has become a market trendsetter rather than a follower. For example, the global obsession with over-the-top (OTT) video content has started with Netflix presenting a quality alternative to cable and ad-supported television. OTT stands for the process of accessing TV and media content without a satellite or cable subscription but via the Internet (Lad et al., 2019). As far as the other trends are concerned, Netflix engages in both producing socially relevant content and adhering to CSR practices in the workplace, increasing its value for both shareholders and viewers. Moreover, the company was also one of the first streaming services to present a live-time interaction with the content allowing the viewer to choose the action pivotal to the plot of the episode of Black Mirror, an antiutopian original Netflix show.
Project Objective
Based on the SWOT analysis of the company, it has become evident that Netflix is not affected by the threats unique to the enterprise, as such notions as piracy and competition are relevant to every streaming service in the market. Instead, a decision was made to dwell on the company’s strengths and opportunities to emphasize the market value of the company. The company’s weakness of the high monthly price that continues to rise makes Netflix potentially the most expensive streaming service (Hatchett, 2022). Although a high rate of customer loyalty does not let this change affect the service’s demand, this trend can turn into a threat due to the growing variety of alternative OTT content. Hence, the opportunity project’s objective is to introduce new, more user-oriented pricing alternatives that would attract new users to the service.
Measuring the Project’s Success
To make sure that this project initiative does not create a financial or marketing issue for the company, the project will operate five key performance indicators (KPIs) that address the financial outcomes of the project and the customer reaction to the change. For example, customer acquisition and satisfaction rely heavily on the notion of NPS, as this measurement shows both the customer’s overall feelings about the service and how likely they are to recommend this service to anyone else. Based on these metrics, the fiscal quarter after the implementation of the feature will be analyzed to decide whether it should become a long-lasting service feature.
Project Value
Since its creation, Netflix has been paying special attention to the values of selflessness and inclusion by creating a customer-oriented service. However, a limited number of subscription options is a feature that limits one’s opportunity to access the library. Hence, by giving the chance to tailor the customer’s preferred plan, the chances of brand loyalty increase drastically. For example, according to Palomba (2022), the production of the original TV series is an important contributing factor to any OTT. Hence, the introduction of a subscription plan that provides access exclusively to the original content library for a lower price can satisfy the requirements of a niche audience. The introduction of several such options eventually creates the value of a better customer experience and elimination of the competitive threat.
Project Map: Timeline
The overall plan for such an opportunity encompasses three major steps, including preparation and financial overview, testing on the focus group, and the mass implementation of the feature. Taking nearly two fiscal quarters to produce and present the feature, the company is encouraged to eliminate every financial and marketing risk during the first four months of preparation and analytics. Since the company pursues a U-shaped organizational structure, the project preparation will require the involvement of the VPs of Marketing, Finance, Sales, Analytics, and UX design team.
Project Map: Steps
Thus, the three primary project parts have several operational steps. The groundwork of the projects requires meticulous planning of the budgeting, minimum payment requirements per customer, and both short-term and long-term outcomes of the feature implementation. It is also necessary to secure a demographic outline of the audience to blueprint the potential subscription features. The next step presupposes the development of the beta version of the billing options and gathering a 1,000-people focus group to test the feature for nearly one month and give back a detailed feedback form. Once the feedback is compared to the preliminary sales outcomes, the decision will be made on whether the official launch will take place. If the results are positive, the third step presents the action plan for the mass launch.
Contingency Plan: Scenario One
Despite the detailed preparation of the launch, the introduction of such a change in customer billing has a series of major risks. The first worst-case scenario in financial losses for the company. In this case, the company has the choice of increasing the prices or reallocating the costs from other financial units such as producing or licensing costs. While both these options hold risks, they are likely to cover the initial losses. The primary contingency plan, however, would be to create a withdrawal plan in advance.
Contingency Plan: Scenario Two
The second likely outcome of the project is that the demand for the new subscription features is lower than expected. Before the elimination of the feature completely, the best option, in this case, would be to create a rapid feedback collection project by sending out quick forms to the userbase to identify whether they use the new options and what option would be the most useful for the customers. After analyzing the audience’s response, the UX and marketing teams can work on adapting the billing catalog according to the customers’ expectations.
Conclusion
For companies like Netflix, being ahead of the competition can become a threat in terms of internal growth and product optimization. Hence, based on the data collected, it may be concluded that creating a new system of billing options is a way towards building a user-friendly platform that promotes inclusion and a unique approach to every customer. To avoid potential risks, both groundwork and contingency plan outlines should be prioritized by the management of the company. If organized carefully, this opportunity can become an asset to the enterprise.
References
Lad, A., Butala, S., & Bide, P. (2019). A comparative analysis of over-the-top platforms: Amazon Prime Video and Netflix. In International conference on communication and intelligent systems (pp. 283-299). Springer, Singapore. Web.
Myers, V. (2021). Inclusion takes root at Netflix: Our first report. Netflix. Web.
Netflix. (n.d.). Comparably. Web.
Palomba, A. (2022). Building OTT brand loyalty and brand equity: Impact of original series on OTT services. Telematics and Informatics, 66. Web.
Parrot Analytics. (2021). Netflix Q2 2021 earnings: The true impact of competition. Web.
Stoll, J. (2022). Number of Netflix paid subscribers worldwide from 3rd quarter 2011 to 2nd quarter 2020. Statista. Web.