The Recession Period Of Netflix
Background of Netflix
Netflix is an American company that is media service provider. It was founded by Reed Hasting and Marc Randolph in the valley of Scotts. It headquarter was located in Los Gatos in California. The Netflix primary business is based on subscriptions, stream media service which gives the online stream of films and television program. The initial business of Netflix include DVD’s, rental by mails but latter on its main focus was on rental DVD business. It expands its business internationally by introducing it to Canada in 2010 and at the start of 2016 it operated its service in 190 countries. But unfortunately it isn’t available in mainland china Syria, North Korea and Crimea.
The production of Netflix has expanded in the Films and TV shows by offering “Netflix Original” by the help of its online library. It has released an estimate of 126 films and by now it has 130 million subscribers worldwide including 57. 38 million from US. Netflix is spreading more fast and worldwide with huge profit making for its business. Recession Period Businesses are suffering due to economy which has been slumping for more than a year. Los Gatos-based Netflix has experienced progressively rising sales, earnings and subscribers.
The company has been getting benefits from consumers’ longing for cheap entertainment, which has been unstoppable and only enhanced with the passage of times. The recession was a blessing from the heavens for Netflix with over 10 million paid subscribers (that count is only increasing) and has a market value of nearly $3 billion. Netflix earned $432 million in third quarter of 2018 and analysts expect it to meet its goal of adding 300,000 to 500,000 new customers in the next ending quarter which would be about 2. 5 million more subscribers than 2008. That would be a record growth in the company’s 10-year history.
Manufacturing
Netflix is an American media services provider in Los Gatos, California and was founded in 1997 by Reed Hastings and Marc Randolph. The company's primary business is its subscription-based streaming media service, which offers online streaming of movies, TV series, and seasons. Netflix's initially as a business model included DVD sales and rental by mail. It did not benefit much in the few starting years, so they had to expand their business with the introduction of streaming media along with the DVD and Blu-ray rental service. The company has expanded internationally and is operated in over 190 countries.
Employee Turnover
During the recession period of 2008, Netflix also faced high rate of employee turnover because people found no room for growth and extremely strict environment. High favoritism and nepotism were also noticed among the top managers who were trying to save their jobs by incorporating their people around. There was extremely high pressure in the working environment which decreased the job satisfaction of employees. Rather than investing in training of the employee, they just hired large swathes of people and then fired the ones that did not fit into their environment. People getting overworked was very common at the workplace.
Customer Service
During this period, Netflix had an exceptionally good customer service that provided them with the satisfaction regarding their website. They helped people through their online help forums and also provided a customer service number for one on one talk. They answered all the questions regarding troubleshooting, billing, payments, subscriptions etc. The comeback of Netflix through its training interventions Through training inventions Netflix Company made growth in the market and achieved success. In year 2011 they were in two businesses, DVD and streaming.
For this Netflix gave training to their employees so they can master in such skills being used for their business to comeback in the market. Following are some steps taken by the company: The Price: In starting customers paid one dollar for one hour, so if you had $9. 99 plan you can stream 100 hours’ worth of free programs. But today they provide unlimited streaming for $7. 99 to $11. 99. By providing reasonable pricing the company controlled its cost of production. Company trained its employees to provide good service at low rate to comeback in the market after facing loss. The DVD/Stream Divide: In year 2006 suddenly DVD sales dropped therefore, Netflix provided training to the company to provide DVD by mail. Through this training they knew they could attract the customer and make profit. As people backed off from buying DVD’s and got interested in online watching or DVD by mail.
Audience with Personalization: Trainer were allowed to personalize course suggestion based on the user behavior. For Netflix it was easy to create online training material. Users found Netflix trust worthy as they were providing online training and people could observe what kind of training they are providing. In such a way they created good reputation in the market and this kind of training became useful for them. Culture Learning Path: Culture learning path is a training given as a sequence to complete training goal. Netflix provided its company with such program so that the company could achieve its goals quickly and efficiently. By achieving its goals on time they created a good comeback in the market.
Customer Interest: Training employees from customer’s point of view Netflix observed which programs were frequently watched and which were not likable by the users. Those which were not being watched were creating the cause loss for the company. Netflix offered fixed annual cost, being loyal, committed and providing training movies this made them strong and different from their competitors.
Selection: There is a large range of selections of movies/TV provided by Netflix. Last year it was 5000-7000 customers get high range of variety to watch. Many users were using Netflix and the company comeback into the society and achieve its goals. Netflix set few goals for its company and follow the strategy to be the best channel in the market.
The challenges faced by Netflix
Language barriers and local relevance
As we know that most of the content that is technically available or accessible anywhere in the world is basically only available in English language. There are 20 languages in which the subtitles are also available. But they focus on African, Asian and the eastern languages. This basically limits the appeal of the services provides too many countries worldwide. Creating subtitles will be expensive for all of the contents and is a time consuming task. So during the recession time it was one of the biggest challenge faced by the Netflix. As we think that Netflix will find it difficult to persuade audiences forsake trusted users if their catalogue lack the brands or if the content has little bit relevance or the interest.
Increased regularity / censor scrutiny
It is noted that many of the premium films and the TV shows that are helping the Netflix to build its business will be found faulted on a lot of levels in may new target markets. It have to take a lot of consideration towards political, religious sensitivities, it also has to make sure that it does not violate any local laws. 3) High cost of ownership A low price has already been set by the Netflix for the global services. At the time of the recession high cost of ownership was also a challenge faced by the Netflix. It has a lot of subscription charges which the Netflix has to deal with because the people were not willing enough to pay that much amount instead they preferred to watch movies or shows on such sites that were free to them. The cost of ownership was pushed higher at the time of the recession and the Netflix had to control it to yes it was one of the biggest challenge at that time
Billing/ payment
Most of the customers pay their charges through credit cards but the American expansion was being achieved by the use of the prepaid cards. So Netflix was trying to enter in the market where the credit card use was low. So the company was thinking of the ways customers can pay their charges but the cash payments were the best options for the consumer
Content licensing
Content licensing was also a major challenge that was faced at the time if the recession because at that time having the content license was very difficult to have as many of the shows or movies were having many illegal content so this issue was to be solved as soon as possible to take the company out of the recession and the Netflix worked really hard on it and then the issue was solved. Was it successful or failure in reality? Netflix in reality is a successful company. Today Netflix has established itself as a global TV network and it is still a tech company in the heart of many people. For the success of the company it have its own cell tower to know how many apps are running on mobiles phones all around the world. Netflix is also successful because its service has achieved the rate of 99. 97% which after the recession never let it go down.
The subscribers of Netflix has also increased day by day which head Netflix to the success as they also reduce the price of their DVD’S and improved its customer satisfaction. The main success behind it was in the training and development of the employees which make them loyal towards the company and give their best to make it successful after the recession period of 2008. So today Netflix is one of the most used site for the movies and drama serials and the most successful as well.
