In the beginning, there was television then there was cable and now there is Netflix. Netflix is the online streaming platform that has more than 130 million subscribers worldwide including 60 million in the United States alone. Its global growth is a huge factor in Netflix's success. The unique business strategy of Netflix has played a prominent role. It is operating in over 200 countries by 2020 and it's international streaming revenues exceeded domestic streaming revenues for the first time. This is an incredible achievement for a company that was only in the US before 2010 and now in 200 countries by 2020.
Over the last five years, Netflix has amassed a huge slate of hit by streaming original shows, high-profile comedy specials and, mind-bending documentaries. It says it will have 1,000 original productions available on its service the company is projected to spend an estimated 13 billion dollars on content this year. Also, remains cheap for customers at $11 a month.
Let us understand how this DVD renting business become so popular and used worldwide by a large number of users. Netflix used to be in the business of renting other people's content. In 2007, Netflix launches a streaming service featuring TV shows and movies licensed from the major Hollywood studios that included stuff like Zoolander Law & Order SVU.
It became more popular with the passing time by introducing more and more innovations into their business. Netflix decides to partner with poplar studios such as the Hollywood studios. But, Hollywood studios demanded more money to license their shows so instead of remaining beholden to them, Netflix decided to start producing its own television shows that way it wouldn't have to rely on content from companies like Disney, NBC, and Fox to keep its customers happy. And slowly and steadily launched their own streaming network.
Phases that worked as a contributor to the success of Netflix business
Netflix carefully selected its initial adjacent markets in terms of geography and perceived differences between markets. For example, in 2010 its earliest international expansion was to Canada. Canada is geographically close as its business origin was the USA and it shares many similarities with the United States thus Netflix was able to expand in locations where the challenges of foreignness were less.
The company learned how to expand and increase its core capabilities beyond its home market. In the second phase business model of Netflix extended its footprint to some 50 countries in order to offer it in a wider variety of markets. The choice of these markets was on the basis of the degree of attractiveness shared similarities of fluent consumers and the availability of broadband internet. This phase involved expanding into a more distinct market supported by investments this also includes technological investments in big data and analytics. It helped Netflix continue learning about internationalization and partnering with local stakeholders.
It focused on adding more languages including subtitles, expanding its support for a range of device and payment partnerships. Netflix also real importance on improving its mobile experience it includes sign-ups credentials and authentication also focuses on developing relationships with device makers TV operators and Internet service providers.
Netflix has responded to the new markets it has entered the company came into contact with key local companies to forge win-win relationships. For example- in Ireland when Vodafone launched a TV series for its customers and Netflix button was included in its remote controls. Recently, Netflix partnered with KDDI in Japan and Telefonica in Spain. Importantly, it sees content production as local for global and not local for local in other words it aims to attract content to a large audience widely. Also, it saw that developing country-specific knowledge is essential for success in local markets.
Netflix has used various fabulous strategies that turned its business to successful heights. Many people who do not have time to go out and shop for movies they love enjoying movies and shows on Netflix.