Netflix Marketing Strategy

Downturn, decline, depression are some of the terms used to define current economic recession prevailing in the world these days. Every industry is being suffered by the financial slum that has invaded the profitability of many companies. Most of them are out of strategies to avoid this disastrous phase. The nasty effect of this gloomy economy is directly effecting on people’s purchasing power. Netflix Established in 1997, Netflix has not just survived but also overcome the depressing on going phases of decreasing profit. It is constantly reaching higher on prosperity graph that is very rare to view currently.
Netflix is the largest online movie rental service existing on internet. It has catered more then 10 million subscribers. Marketing Strategies The biggest USP (Unique Selling Point) of Netflix is being internet rental service provider. With low monthly price one can rent movie or TV episodes DVD’s from internet instead of going to a movie shop. These movies are delivered to customer’s house with in one working day without any extra shipping charges. Customers can keep these rented movies as long as they want without any late charges.
They have a wide range of variety consisting of a library with more then 12,000 movies and programs. Netflix has not restricted it’s self into internet rental service but also provides the facility of streaming online movies and games via internet. It has also combined hands with leading consumer electronics companies to offer a range of devices for movies and TV episodes streaming. They have successful partnerships with companies like Blu-ray players (LG), broadband-enabled TVs (LG and Vizio) and Roku settop boxes to offer devices for streaming videos.

Their recent successful marketing strategy was to combine with Microsoft to provide the facility of viewing movies and TV episode through Xbox 360vidoe game and entertainment on their television. Microsoft Xbox has already a wide range of customers. This has turned out to be a profitable business for both the companies by increasing their market penetration and market share. It is also taking advantage of expanding broadband market to deliver improved streaming service over internet. They will soon phase out the shipping procedure and promote more on the streaming end.
This will save their annual shipping cost. Netflix at the time of recession cut down on their advertisement cost in the previous quarter, which did not make any effect on their revenue. As compared with Blockbuster where customers go out to rent a movie or TV series, one can easily download it through internet and preserve it for as long as they want. With payment of minimal monthly amount a person can spent this recession period entertaining itself through movies. In 2007, the company made $66. 6 million on $1. 21 billion in revenue.
It increase it’s earning in the year 2008 by making $83 million in profit on $1. 36 billion in revenue in 2008 (Stammers, Robert, 2009, March). The company anticipates finishing first quarter of the year 2009 with 10. 1-10. 3 million subscribers, posting sales of $387-393 million, above consent. It also predicts to make 10. 6-11. 3 million subscribers by the end of year 2009, making sales revenue of $1. 58-1. 635 billion, above consensus (Frommer, Dan. 2009, January). With more value addition and smart positioning, Netflix has catered masses and continuing to do so in this recession drag.
Convenience and innovation are two important pillars of their marketing strategy. People can’t deprive themselves during any conditions and keeping this in mind they are making their facilities more available and affordable. Works Cited Frommer, Dan. 2009, January 26. Netflix Q4 Massive, Guidance Strong (NFLX). http://www. businessinsider. com/2009/1/netflix-earnings-analysis Stammers, Robert. 2009, February 25. Netflix Thrives Despite The Recession . Accessed on March 19, 2009. http://www. forbes. com/2009/02/25/netflix-microsoft-blockbuster-personal-finance-investing-ideas_movie_rentals. html