Netflix

Posted on October 5, 2014 by mmueller

by Micaela Mueller

Company Logo – www.netflix.com

100 Winchester Circle, Los Gatos, CA 95032
(408) 540-3700

Executives [1]

Reed Hastings, Founder and CEO

David Wells, CFO

Twani Cranz, Chief Talent Officer

Kelly Bennett, Chief Marketing Officer

About [2]

Netflix is an international public company that allows users to stream movies and television shows online with a monthly subscription. They also offer rentals by mail for an additional cost and produce their own original programming.

History

Courtesy of postalnews.com

Reed Hastings and Marc Randolph founded Netflix in 1997 as an online movie rental service. In 2007, Netflix introduced streaming services that allowed members to use personal computers to instantly watch movies and television shows online. In 2012, Netflix began producing original content and became the first Internet TV network to be nominated for the primetime Emmy with 31 nominations in 2013 [3]. Currently in 2014, Netflix has over 53 million members in nearly 50 countries worldwide and accounts for more than 34 percent of the peak wired download traffic in North America [4].

Financials

Netflix is publically held. According to the company’s 2014 third quarter report, it has $1,223 billion in total revenue, a 27% increase from the same quarter of the previous year. The company reported a 20% increase in domestic revenue from the same quarter of the previous year and a 47% increase in international revenue due to their expanded global market. Netflix predicts a 6% increase in total revenue and an additional 4 million subscribers by the end of the fourth quarter, bringing their total revenue up to $1,305 billion and their global membership to 57 million. Netflix’s two major competitors are Hulu and Amazon [5].

Courtesy of finance.yahoo.com

Over a 3-month period, Netflix’s highest share price was $484.39. However, after a massive 25% drop on October 16^th, the price dropped to $361.70 and eventually reached it’s lowest share price of $346.59 on November 30^th [6].

The 25% drop in share price occurred a day after Netflix reported that the company’s subscriber growth was below the original forecast. Netflix speculates that the subscriber growth was lower than anticipated as a result of the increased price for membership that was announced in May 2014 [7]. The price increased $1 from $7.99 to $8.99 monthly [8].

Recent News

International Expansion

Courtesy of gigaom.com

For the past couple of years, Netflix has been working to increase their international presence. Since 2012, Netflix has been available internationally in the UK, Ireland, Denmark, Finland, Norway, and Sweden and in the Netherlands since 2013. In September of 2014, Netflix announced that streaming services are now available to subscribers in Germany, France, Austria, Switzerland, Belgium and Luxembourg via all devices with Internet access including computers, smartphones, and video game consoles [9].

Then, in November of 2014, Netflix announced, that by March of 2015, it will expand into New Zealand and Australia [10].

Netflix and Nielsen

Since its start in 1997, the company has never released how many people watch each show on Netflix. The company claims that because their revenue comes from subscribers and not advertisers, the only number that matters is their subscriber count. The company’s decision bothers networks such as HBO, Showtime, and Starz, who also rely on subscribers and not advertisers, but who have their ratings recorded by Nielsen [11].

However, according to the Wall Street Journal, Nielsen is going to start measuring viewership for streaming services like Netflix. Starting next month, Nielsen will use already existing in-home metering devices to record Netflix viewership without the need of the company’s permission. Nielsen, however, will not be able to record viewership via mobile devices, a platform heavily used for Netflix streaming [12].

Recent Original Content

Netflix started producing original programming in 2012 with the release their first series Lilyhammer starring former Sopranos star Steven Van Zandt [13]. Since then, the company has produced a number of successes such as Orange is the New Black, winning 3 Primetime Emmy Awards [14], and House of Cards, winning 4 Primetime Emmy Awards [15].

Courtesy of netflix.com

In addition to producing their own content, Netflix picks up dropped on-the-air television shows and continues to produce them. Arrested Development, for example, was off the air for a number of years before Netflix produced its fourth season in 2013. In August of 2014, the network confirmed that it will be producing a fifth season in the coming year [16].

On June 19, 2014, Netflix announced the company’s pairing with Chelsea Handler to produce a Netflix original comedy talk show. Handler decided to pair with Netflix in order to keep herself new and interesting. The talk show will debut in early 2016 [17]. However, on October 10^th, the network premiered a stand up comedy performance from Handler’s latest comedy tour, Uganda Be Kidding Me, as her debut to Netflix [18].

Looking Ahead

Film

Courtesy of imdb.com

On September 30, 2014, Netflix announced their pairing with the Weinstein Company to release their first original movie. The movie will be a sequel to Crouching Tiger Hidden Dragon, a 2002 martial-arts epic movie directed by Ang Lee, also the director of Life of Pi and Brokeback Mountain [19]. The sequel will be titled Crouching Tiger Hidden Dragon: The Green Legend and will be directed by Yuen Wo-ping. It will be produced by Harvey Weinstein, Academy Award winner for The King’s Speech, Peter Berg, Emmy Award winner for Friday Night Lights, and Sarah Aubrey, producer of Lone Survivor. The film tells a martial arts story where good and evil battle for the fate of the Martial World. Major stars of the film will include Harry Shum Jr., Jason Scott Lee, Roger Yuan, and Eugenia Yuan [20]. It will be released and available to all subscribers on August 28, 2015 as well as in select global IMAX theaters [21].

Days later, on October 2^nd, Netflix announced a deal they made with Adam Sandler, comedy actor and founder of Happy Madison Productions [22]. Sandler, alongside Happy Madison Productions, committed to acting and producing four films exclusively available through Netflix. The first movie could come as early as late 2015 and currently has no theatrical component [23].

Television

Courtesy of netflix.com

Netflix will be premiering two original programming pieces on December 12, 2014. The first is Marco Polo, a series centered on Marco Polo’s exploration during the time of the 13^th century war in China and will be produced by The Weinstein Company [24].

The second is a stand-up comedy special, American Ham, with actor Nick Offerman, known for his role in NBS’s Parks and Recreation. The special will appear in the US, Canada, the UK, and Ireland [25].

The company will continue their original series in 2016 with a relationship sitcom called Love. Judd Apatow, known for producing Knocked Up and 40-Year-Old Virgin, will co-write and produce this Netflix original series [26].

Courtesy of joblo.com

Another sitcom in the works is Grace and Frankie, starring Lily Tomlin and Jane Fonda. The show is targeted to premier in summer 2015 [27].

Sources

[1] “Officers and Directors”, ir.netflix.com, RT: 11/29/14

[2] “Company Overview”, pr.netflix.com, RT: 11/29/14

[3] “Company Timeline”, pr.netflix.com, RT: 11/29/14

[4] “Netflix Crowned King of Streaming With More Than a Third of Peak Traffic”, Time Magazine, 5/14/14, RT: 11/29/14

[5] “Letter to Shareholders”, ir.netflix.com, 10/15/14, RT: 11/29/14

[6] “Netflix, Inc.”, Yahoo!Finance, RT: 11/30/14

[7] “Netflix Shares tank 20% on Weak Results”, CNN Money, RT: 11/29/14

[8] “A Quick Update on Our Streaming Plans and Prices”, blog.netflix.com, 5/9/14, RT: 11/29/14

[9] “Netflix Launches in Belgium and Luxembourg”, Multichannel News,9/9/14, RT: 11/29/14

[10] “Press Releases”, pr.netflix.com, 11/18/14, RT: 11/29/14

[11] “How Much Longer Can Netflix Keep Ratings a Secret?”, Forbes, 9/18/14, RT: 11/29/14

[12] “We’re Still a Long Way Away From Knowing How Many People Watch Netflix and Amazon Shows”, vulture.com, 11/20/14, RT: 11/29/14

[13] “Lilyhammer, Netflix’s First Original Show, Available to Watch Online Now”, Huffington Post, 2/6/12, RT: 11/29/14

[14] “Orange is the New Black Awards”, IMDb.com, RT: 11/29/14

[15] “House of Cards Awards”, IMDb.com, RT: 11/29/14

[16] “Will Arnett Confirms ‘Arrested Development’ Season 5 Is Happening”, Huffington Post, 8/8/14, RT: 11/29/14

[17] “Press Releases”, pr.netflix.com, 6/19/14 RT: 11/29/14

[18] “Chelsea Handler to Launch Netflix Talk Show”, CBS News, 6/19/14, RT: 11/29/14

[19] “Ang Lee”, IMDb.com, RT: 11/29/14

[20] “Press Releases”, pr.netflix.com, 9/30/14, RT: 11/29/14

[21] “Netflix to Release First Original Movie”, Time Magazine, 9/30/14, RT: 11/29/14

[22] “Adam Sandler”, IMDb.com, RT: 11/29/14

[23] “Press Releases”, pr.netflix.com, 10/2/14, RT: 11/29/14

[24] “Press Releases”, pr.netflix.com, 4/8/14, RT: 11/29/14

[25] “Netflix Sets Premiere for Nick Offerman’s ‘American Ham’ Stand-up Comedy Special”, bostonherald.com, 11/24/14, RT: 11/29/14

[26] “Netflix (NFLX) to Stream Original Content Love in 2016”, zacks.com, 9/18/14, RT: 11/29/14

[27] “Netflix Orders Comedy Series to Star Jane Fonda, Lily Tomlin”, Variety 3/19/14, RT: 11/29/14

Netflix

Link

By Carly Goldstein

Company Logo

100 Winchester Circle

Los Gatos, CA 95032

(408) 540-3700

www.netflix.com

Executives [1]

Courtesy of Netflix.com

Reed Hastings, Founder and CEO

Courtesy of Netflix.com

Kelley Bennett, Chief Marketing Officer

Courtesy of Netflix.com

Tawni Cranz, Chief Talent Officer

Courtesy of Netflix.com

David Wells, Chief Financial Officer

About [2]

Courtesy of internettrailer.com

As a leader in internet television, Netflix not only allows its members to instantly stream movies and television for a monthly fee, but also provides customers with original content. Users can also choose to select and receive content through the mail for an additional monthly cost. Competitors of the service include Hulu and Amazon.

History [3]

Courtesy of http://smokingsection.uproxx.com/

Netflix was founded in 1997 by Reed Hastings and Marc Randolph. The company provided online movie rentals that would be delivered to the costumer’s home within several business days. In 2007, Netflix introduced streaming, allowing subscribers to instantly watch movies and television shows on their electronic devices. Netflix began to introduce original content in 2012. As of 2013, the service has over 40 million users globally.

Financials

Domestically, the company reported an increase in net additions of 2.33 million in the fourth quarter, 14% above the 2.05 million of the same quarter of the previous year.[4] Internationally, Netflix reported a net addition of 1.74 million in the fourth quarter, increasing the number of international members to 10.93 million. [4] In the coming months, Netflix aims to broaden its international presence by offering its services in Germany. [5]

Courtesy of Google Finance

In April of 2013, the company tested a new membership plan in which subscribers could simultaneously stream on four different devices for $11.99 per month. [6] Netflix continues to adjust their prices and aims to offer three different membership options for new members in the coming year. The options include the $11.99 price as well as a $6.99 subscription for those who only require instant streaming on one device.[4]

The first quarterly report of 2014 will be shared on April 21st. However, consensus estimates a dramatic increase from the first quarterly report of 2013. [7] Currently, the Netflix stock rests at 346.73.

Original Content

Courtesy of http://o.aolcdn.com/

Beginning in 2012, Netflix has produced a variety of original programming including television series, documentaries and children’s programs. Lillyhammer, a Norwegian drama starring Steven Van Zandt, is considered Netflix’s first series and premiered on February 6, 2012.[8] Other original content includes The Ropes, Bad Samaritans, Hemlock Grove, and Turbo FAST. The site has also premiered a variety of documentaries and comedy specials such as Mitt and The Square. The later was the first movie of its kind to be nominated for an Academy Award for best documentary. [9]

Courtesy of upload.wikimedia.org

Netflix also produces material that no longer has a place on television. Several years after it’s cancellation, Arrested Development was resurrected for a fourth season on the streaming service in May of 2013. [10] In 2014, the season earned a Golden Globe nomination for Jason Bateman for best actor in a comedy series. [11] Netflix will also be reviving The Killing after it’s cancellation on AMC. [12] The show’s final season will premiere on the site some time this year.

Courtesy of upload.wikimedia.org

On February 1, 2013, Netflix released House of Cards. The show, based on the English television program of the same name, follows Frank Underwood, played by Kevin Spacey, a ruthless politician who does whatever it takes to gain more political power. House of Cards also stars Robin Wright and Kate Mara. The program received favorable reviews from critics, earning 3 Emmys and a Golden Globe after its first season[13], becoming the first show of its kind to do so.

As a result of the success of the first season, Netflix ordered a second season of House of Cards which was released on February 14, 2014. Utilizing Procera Network, it was reported that 15% of users of a particular internet service viewed the first episode within 14 hours of its release, an increase from the 2% of users who watched the first episode of the first season within the premiering weekend. [14]

10 days before the premiere of the second season, Netflix announced the renewal of House of Cards for a third season. [15]

Courtesy of www.galaticnewsone.com

Orange is the New Black premiered on Netflix on July 11, 2013. The program stars Taylor Schilling as Piper Chapman, a thirty-year old woman sentenced to 15 months in jail after she is convicted of crime committed ten years before. The show is based on a memoir by Piper Kerman of the same name. The show was nominated for a Golden Globe for best performance by an Actress in a drama television series, as well as a Grammy for its theme song. [16]

Netflix announced the premiere date of the second season of Orange is the New Black after the credits of the final episode of House of Cards. [17] The show’s second season is set to be available on June 6, 2014.

Looking Ahead

Courtesy of www.wired.com

Within this year, Netflix will be premiering numerous projects. Animated comedy, Bojack Horse, staring Will Arnett and Aaron Paul, will be released in the coming months.[18] As will Marco Polo, a adventure drama produced by The Weinstein Company.[19] The company will continue to show its interest in children’s programming when animated shows Puss in Boots, King Julien and Veggie Tales in the House are available for streaming later this year. [20] The second seasons of Orange is the New Black and Hemlock Grove will also premiere in June and July, respectively.

In 2015, Netflix will not only release its third season of House of Cards, but also release new original series. Science fiction drama Sense8, from the writers of The Matrix, will debut sometime in 2015. [21] Also set to be available for streaming in 2015, Narcos, a drama depicting the Medellin Cartel in Colombia, and Grace and Frankie a situational comedy staring Jane Fonda and Lily Tomlin. [22]

Courtesy of http://www.digitaltrends.com/

In February of 2014, it was announced that Disney will collaborate with Netflix to create four original series for Marvel heroes: Daredevil, Jessica Jones, Iron Fist and Luke Cage. The Marvel’s Defenders project will cost over $200 million over a three year span and film predominately in New York City. Filming will begin July of 2014 and premiere on Netflix sometime in 2015. [23]

Sources

[1] “Officers and Directors”. netflix.com. RT: 4/10/14

[2] “Company Overview” . pr.netflix.com RT: 4/11/14

[3] “Company Timeline”. pr.netflix.com RT: 4/11/14

[4] “Letter to Shareholders” . ir.netflix.com. January 22, 2014. RT: 4/11/14

[5] “Netflix Inc. Will Arrive in Germany”. Value Walk. April 16, 2014. RT: 4/18/14

[6] “Netflix Consumers Get Ready”. Bloomberg Businessweek. January 24, 2014. RT: 4/18/14

[7] “Earnings for Netflix Projected to Rise”. Forbes. April 16, 2014. RT: 4/18/14

[8] “Lillyhammer”. wikipedia.org. RT: 4/15/14

[9] “The Square Awards”. IMDB.com. RT: 4/15/14

[10] “New Arrested Development Season”. The New York Times. April 4, 2013. RT: 4/15/14

[11] “Golden Globes 2014”. Los Angeles Times. January 12, 2014. RT: 4/15/14

[12] “The Killing Shock”. Entertainment Weekly. November 15, 2013. RT: 4/16/14

[13] “House of Cards Awards”. IMDB.com. RT: 4/13/14

[14] “House of Cards Viewing Soars”. Variety. February 14, 2014. RT: 4/13/14

[15] “Netflix Renews House of Cards”. The Hollywood Reporter. February 4, 2014. RT: 4/13/14

[16] “Orange is the New Black Awards”. IMDB.com. RT: 4/13/14

[17] “Orange is the New Black Season 2 Date Revealed”. eonline.com. February 15, 2014. RT: 4/13/14

[18] “Netflix Adds Bojack Horseman”. Variety. December 11, 2013. RT: 4/18/14

[19] “Netflix Announces Pickup”. Variety. January 14, 2014. RT: 4/18/14

[20] “DreamWorks’ Puss in Boots”. videoink.com. March 13, 2014. RT: 4/18/14

[21] “Matrix Creators to Film Netflix Series”. Chicago Tribune. March 17, 2014. RT: 4/18/14

[22] “Jane Fonda, Lily Tomlin to Star in in Netflix Sitcom”. Los Angeles Times. March 19, 2014. RT: 4/20/14

[23] “Disney to Spend $200 Million on Marvel Series”. Variety. February 26, 2014. RT: 4/20/14

Netflix

Posted on November 12, 2013 by Will Roth

By Will Roth

Netflix logo – courtesy digitaltrends.com

Corporate Headquarters

100 Winchester Circle, Los Gatos, CA 95032

(408) 540-3700

www.netflix.com

History

Netflix was founded in 1997 by software executives Reed Hastings and Marc Randolph. Two years later, the company offered its subscription service of unlimited DVD rentals for a monthly fee. Since its inception, Netflix has grown exponentially in terms of consumer popularity and financial revenue. Today, over 40 million subscribers consume roughly 1 billion hours of content per month through the company. [1]

Key Executive

Reed Hastings Courtesy of Netflix

Reed Hastings co-founded Netflix in 1997 and has served as its Chairman, CEO, and President since. Prior to this, he founded Pure Software, which he then sold to Rational Software. Following a stint in the Peace Corps during college wherein he taught high school math in Swaziland, he has served as the president of the California State Board of Education and remains a member of the California Teachers’ Association. [2] [3]

Financials

Netflix made its initial public offering on May 22, 2002 with 5,500,000 shares at $15.00 each. [4] As of November 15, 2013 one share sat at $349.78. The company’s all-time high was $389.16. However, it hasn’t always been a steadily increasing stock market commodity. On November 30, 2011 its price fell to $62.37. This came after the company’s decision to separate its DVD rental and streaming services. After watching the stock fall, company executives decided to abort the plan. Its stock recovered quickly and has climbed even higher than it was before the proposed change. [5]

Innovation

Netflix is a company that always seems to be ahead of the curve. After amassing 6.3 million members as a strictly DVD rental service, it launched its online streaming service in 2007. [4] After hovering around $20 per stock for years, this development started the company skyrocketing, topping out at roughly $290. This promptly fell after the announcement of Qwikster, which was the proposed streaming-only branch of Netflix. While this was a failure, it was innovative nonetheless.

Click here to watch a BloombergTV feature on Qwikster.

Netflix has rebuilt its popularity and image largely through original content.

latintimes.com

House of Cards was the first heavily advertised piece of original content from Netflix. “A Congressman works with his equally conniving wife to exact revenge on the people who betrayed him. [6]” The entire 13 episode first season was released at once so that viewers could “binge watch” it. Many analysts questioned whether this was a good business decision, theorizing that viewers wouldn’t remain hooked long enough for Netflix to prosper financially. [7] The numbers proved those doubters wrong. In the financial quarter following the show’s debut, Netflix gained 3 million new subscribers. In that quarter alone, the company made back its money on the program in which it had invested $100 million. [8] The show received 9 Emmy nominations and won for Outstanding Casting, Directing, and Cinematography in a Drama Series. [9]

pcmag.com

Netflix also found success in its debut of the fourth season of the cult hit Arrested Development. Executives attributed the bump of 630,000 new subscribers in the second quarter of 2013 to the show’s dedicated fan base. [10] The season earned three Emmy nominations. [11]

In addition to original content, Netflix has been innovative in customizing the user experience. In 2006, the company announced the “Netflix Prize,” which would award $1 million to the person or team who came up with the best algorithm to accurately give entertainment recommendations based on personal preference. Three years later, they had received submissions from more than 40,000 teams from 186 countries. [4] The prize was awarded in 2009, but the company never implemented the algorithm. According to Netflix, the “additional accuracy gains that we measured did not seem to justify the engineering effort needed to bring them into a production environment. [12]“

Also in the vein of user experience, Netflix recently added the option of multiple profiles to its streaming service. Chief Product Officer Neil Hunt acknowledged that most accounts are shared, usually within one household. In an effort to tailor recommendations to each user specifically, customers can now specify who is watching. The service is free of charge and will also help Netflix in collected more accurate user data. [13]

Competition

One might assume that Netflix is a competitor with cable providers. CEO Reed Hastings has a different view. In a letter to investors, he outlined his company’s main areas of focus moving forward, breaking down its competition into two categories. The first is “competitors-for-time,” meaning entertainment options that do not bid against Netflix. While markets may not overlap between Netflix and video game providers, sports networks, and piracy, all of those options eat up consumer time that could be spent watching Netflix. The other category is “competitors-for-content.” The largest competitor here is HBO. Hastings discloses that the companies have bid against each other for movie licensing and original content in the past, and that they seem to be pushing each other to be better consumer-oriented services. Hastings also lists Amazon, Hulu and others as competitors-for-content. At the same time, he believes that there will be enough room for everyone. “Many consumers will subscribe to multiple services if they each have unique compelling content. [14]

On The Horizon

Netflix plans to build upon its success with original content. It has renewed each of its original shows for second seasons, and has expressed desire to make another season of Arrested Development as well. “[We would] be delighted to produce a fifth season of Arrested Development, if possible, given fan reaction.” The company also plans to produce its own full-length documentaries and comedy specials and stream them exclusively. [15]

There is also speculation that Netflix is pushing for day-and-date movie releases, meaning that it could begin streaming a film the same day it premieres in theaters. Though Netflix has not confirmed this, theater owners are wary that the development could put them out of business. Ted Sarandos, Netflix’s Chief Content Officer, accused theaters of refusing to adapt, saying “not only are they going to kill theaters — they might kill movies.” Currently, theaters have a 90 day exclusivity deal, wherein films cannot be shown anywhere else for three months. But recent studies state that theaters make 96% of total revenue from a film’s first six weeks. At the very least, we can expect Netflix to cut the amount of time between theatrical releases to streaming down to between 30-45 days. This would spell greater profits for both Netflix and movie studios while only trimming 4% of theaters’ revenue. [16] At the very least, we can expect an innovator like Netflix to be on the forefront of the entertainment business in the years to come.

Sources

[1] About Netflix

[2] About Reed Hastings

[3] Reed Hastings Profile – Bloomberg Businessweek

[4] Netflix Company Timeline

[5] Nasdaq

[6] House of Cards imdb

[7] Variety Binge Watching

[8] The Atlantic Wire

[9] Emmys – House of Cards

[10] Huffington Post Tech

[11] Emmys – Arrested Development