- Technology – Great streaming technology backed with cutting edge technology. The company continually strives to make advancements in technology. Netflix can stream videos on any device (ios, Android, Smart TV, Laptop, etc.)
- Great User Experience – With countless TV shows and movies, Netflix provides great content and user experience to its customers.
- A large number of subscribers – Netflix has over 53 million subscribers, and it is steadily growing.
- Brand name & Popularity – Netflix brand name is widely recognized across the world for its excellent services. With increasing interest in consuming online entertainment, the popularity of Netflix is bound to increase.
- International Expansion- Netflix is steadily expanding its operating regions. With its recent expansion to Portugal, Italy & Spain in Europe and Taiwan, HongKong, Singapore, and Korea in Southeast Asian countries, the company is expected to increase its profits.
- Licensed premium / original content – Netflix originals have added to the company’s success.
| - Netflix’s DVD segment is facing a continuous decline starting 2011. Though the customers are shifting towards online streaming, loss in DVD business is contributing to revenue decrease.
- Increasing competition from strong competitors such as Amazon’s Prime Instant, Redbox Instant prevents Netflix to increase the prices for its services.
- The increasing cost to keep the content new reduces the number of opportunities for Netflix to update the content frequently. Thus, outdated and older movies may reduce interest among subscribers and eventually might move away from subscription.
- Vigorous international expansion resulted in increasing operating costs. Most of these markets are not yet profitable.
- Increasing the cost of content: Though Netflix produces its original content, it heavily relies on licensed content from other creators / production companies. The content cost has been increasing significantly while Netflix keeps their prices low.
|