Reason behind success of Netflix

Netflix is an American media company founded by Marc Randolph and Reed Hastings on august 29, 1997. Currently they have company valuation of $194 Billion which has surpassed Disney (whose net worth is $184 Billion down from nearly $258 Billion) as the most valued media company in the world.

Basically they provide 3 type of content…

1.     Licensed 2^nd run: It means the movie which is already released, they buy the online streaming rights.
2.     Licensed original: it talks about the movies that are produced by another studio; they have to acquire the distribution rights and release it online.
3.     Self produced original: They are in all like, from production of movies and shows to distribution.

They segment the audience psychographically and target mostly to the working professionals. The most important thing is they don’t have Ads which is frustrating for the audience while watching a show. So it overall gives a hassle free services to the users.

Now a day’s many people are active on social media. So by using digital marketing they create a awareness among the customers, so that the people try to know about Netflix. Which leads to huge traffic entering into their websites and thus the leads are formed. The free 30 day trial which is given by them is to attract the customer towards them. They drag down customer from television to Netflix. By the completion of 30day free trial most of audience connect emotionally, as a result most of the customers take the subscription. They create good content which is not available in the market because of censor restriction of the government.

One biggest reason behind their success is that, they strongly focus on customer retention rate which is 93% as compared to hulu 64% and Amazon prime 75%. They have around 182 million subscribers all over the world. They already knew that, the show HOUSE OF CARDS and ORANGE IS THE NEW BLACK would be a big hit on the platform, not because just subscribers may like it, but the truth is by using data analytics, they study the watching pattern of the users.

They read the customer subconscious mind like: like when they pause, rewind or fast forward. At what time they watch the content (they have found that people watch TV shows during week and movies during weekend), Where they watch, what devices they use to watch. When do they pause and leave content (if ever they come back or not).

The ratings are given by around 4 million people per day and also they get 3 million searches/day. They analyse browsing and scrolling behavior of the people. In a movie which character people love and watch repeatedly. So by considering all this parameters and the behavior of more than 1 crore people they produce a show. That’s the reason why Netflix is top in the media and entertainment company list. We can say Netflix is a media company as well as analytics company.