Netflix

Posted on December 1, 2014 by ptharami

by Paul Haramis

Netflix Logo – Courtesy of pr.netflix.com [1]

Corporate Headquarters [2]

100 Winchester Circle, Los Gatos, CA 95032

Phone: +1 (408) 540-3700

www.netflix.com

Key Executives [3]:

Reed Hastings, Founder and CEO

David Wells, Chief Financial Officer

Ted Sarandos, Chief Content Officer

Neil Hunt, Chief Product Officer

Greg Peters, Chief Streaming and Partnerships Officer

Tawni Cranz, Chief Talent Officer

History [4]:

http://www.qualitylogoproducts.com/blog/wp-content/uploads/2012/02/netflix-envelope-e1329161999677.jpg

Netflix didn’t offer streaming services until 2007 – Photo courtesy of qualitylogoproducts.com

Reed Hastings founded Netflix in 1997 with Marc Randolph [4]. The company was initially founded to offer online movie rentals. Customers would select a movie from the database and have it shipped directly to their home. In 1999, the company introduced monthly subscriptions, a format that the company still uses today. In 2002, Netflix first became available to the public on the NASDAQ. In 2007, Netflix began its streaming service, which has allowed the company to see exponential growth. Today there are more than 53 million members of Netflix, all of whom are scattered around the globe.

Financials [5]:

Courtesy of Google Finance

The third quarter was disappointing for Netflix as it fell short of its internal projections. They believed they would make around $1.41 billion dollars, but instead made around $1.22 billion dollars [4]. This is largely due to new subscriptions coming in at 980,000 as compared to the 1.3 million they projected. One of the biggest factors for the lower than anticipated new subscribers is believed to be the rise in price for a monthly subscription. The price rose from $7.99 a month to $8.99 a month. As part of their damage control, Netflix said that sometimes they over-predict their growth and sometimes they undersell it. This was to much avail as Netflix saw a 25% decrease in their stock after their third quarter earnings were released [6]. Some entrepreneurs saw this as an unbelievable opportunity. Netflix addressed fears that this was due to competition by saying, “Since our per-member viewing and retention in the US are as strong as ever, we don’t think increased competition from piracy, TV Everywhere, Amazon Prime Instant Video, Hulu, etc., is a major factor” [5]. This still didn’t prevent stock from dropping another 4% when HBO announced that HBO Go will be offered as a stand-alone streaming service and users won’t need an HBO cable subscription [5]. Netflix has been predicting this since 2011 and believes that since the content available on both is different, that both companies can continue to grow moving forward [5].

Original Content:

Netflix’s original content continues to be extremely strong and Netflix responded by creating additional new content as well as renewing current shows. In the third quarter, Netflix released an adult animated show “BoJack Horseman” as well as two new seasons of their hit shows “Orange is the New Black” and “The Killing” [5]. In addition, today Netflix announced that season 3 of the hit-show House of Cards, will be premiering on February 27, 2015 [7].

According to a Centris survey, 72% of domestic subscribers have watched some type of Netflix original programming [8]. This is up 15% from the first quarter of 2014 and is a great sign for Netflix that their subscribers are at least sampling their original programming. In another survey conducted for Netflix, 57% of subscribers stated that “original content was ‘extremely important,’ ‘quite important,’ or ‘moderately important” [8]. This information has pushed Netflix to churn out more original programming as they have a new show, “Marco Polo” set to release on December 12th. Netflix has reportedly spent $90 million dollars on the production of the show, which is expected to rival HBO’s hit show, “Game of Thrones” [9].

Netflix also recently announced that they will be creating an original series based on Lemony Snicket’s, “A Series of Unfortunate Events.” The books were international best sellers and the move allows Netflix to broaden its content reach with original programming [10].

Innovation

Netflix continues to innovate to make their product better and more expansive. This past quarter, Netflix has taken a number of big steps. The first was the completion of a four-year long project to switch over to HTML5 streaming [11]. The move should increase their streaming services as they will prevent users from having to download Microsoft Silverlight to stream Netflix. One of the most important tools for Netflix is their personal recommendations tool. This suggests new shows to users based on their previous shows and allows subscribers to keep watching new content. Netflix is continually testing new algorithms to improve this service and recently introduced a new feature that recommends shows based on characters from their original programming [12]. For example, subscribers can see programs recommended by Claire Underwood.

Photo courtesy of zap2it.com

This is a new way that Netflix believes it can keep pushing content on subscribers and keep their strong retention rate. The biggest innovation that Netflix made in the third quarter was their announcement of Crouching Tiger Hidden Dragon 2 straight to Netflix and select IMAX theaters [13]. This has several theater chains up in arms as they wonder about the potential future repercussions. Netflix also struck a deal with Adam Sandler and Happy Madison Productions to produce four movies released straight to Netflix [14]. It will be interesting to see if this causes a rise in subscriptions to view content that is exclusive to Netflix. It will also be interesting to see how many viewers the films get as Nielsen recently announced they will begin to track online viewing [15]. Netflix has refused to show viewership in the past as a way to alleviate pressure from its programming. It will be interesting to see how the new Nielsen ratings will effect the recent proclamation made by CEO, Reed Hastings this past weekend [16].

Global Expansion

The ultimate end goal for Netflix is to be a wide spread global company. In this past quarter, Netflix has made big strides in achieving that goal.

Photo courtesy of static.amigobulls.com

Earlier in the quarter, Netflix officially launched in six new European countries: France, Germany, Austria, Switzerland, Belgium, and Luxembourg [17]. This launch opened up Netflix to 63 million potential new households [17]. To accommodate the new European countries, many local and European content have been added to the database, as well as the addition of subtitles or dubbing European language over some current American content [17]. In the past two weeks, Netflix announced they will be launching in Australia and New Zealand in March 2015 [18]. The move pushes the number of countries and territories that Netflix is in over 50 [18]. Netflix will continue to grow that number as they expand globally.

Overview and Moving Forward:

Overall, despite failing to reach their projections, this has been an extremely successful quarter for Netflix as they continue to expand in both subscriptions and capabilities. It will be extremely exciting to tract their growth in the new year!

Sources:

[1] Netflix Logo, Netflix Media Center, Retrieved: November 29, 2014

[2] Company Overview, Netflix Media Center, Retrieved November 29, 2014

[3] Netflix: Officers & Directors, Officers & Directors, Retrieved: November 29, 2014

[4] Company Timeline, Netflix Media Center, Retrieved: November 29, 2014

[5] Letter to Shareholders, Quarterly Earnings, Retrieved: November 29, 2014

[6] Netflix Stock is Down 25% on This One Key Number in Earnings, MoneyMorning.com, Retrieved: November 29, 2014

[7] Netflix Announces ‘House of Cards’ Season 3 Premiere Date, Entertainment Weekly, Retrieved: December 1, 2014

[8] Netflix U.S. Viewership of Original Series Surges in Q3: Study, Variety, Retrieved: November 30, 2014

[9] Netflix is Creating One of the Most Expensive TV Shows in the World – Here’s Why It’s So Important, Business Insider, Retrieved: November 30, 2014

[10] Netflix to Adapt Lemony Snicket’s ‘A Series of Unfortunate Events’ into an Original Series, Netflix Media Center, Retrieved: November 30, 2014

[11] Netflix Goes HTML5 for Laptop Streaming, ZDNet, Retrieved: November 30, 2014

[12] Netflix Uses its Fictional Characters for Recommendations, Netflix Life, Retrieved: November 30, 2014

[13] Netflix Announces First Original Movie, Netflix Media Center, Retrieved: November 30, 2014

[14] O’Doyle Rules! Adam Sandler Heads to Netflix, Netflix Media Center, Retrieved: November 30, 2014

[15] Nielsen Plans to Track Netflix, Amazon — And It’s a Big Deal, Forbes, Retrieved: November 30, 2014

[16] Netflix CEO Reed Hastings says Cable TV Will be Dead by 2030, MSN, Retrieved: December 1, 2014

[17] Netflix Now in France, Germany, Austria, Switzerland, Belgium, and Luxembourg, Netflix Media Center, Retrieved: November 30, 2014

[18] Netflix, Inc. Heads to the Land Down Under, Nasdaq, Retrieved: November 30, 2014

Weinstein Company

Posted on October 5, 2014 by pbsteinf

by Phoebe Steinfeld

[1] The Weinstein Company logo

About TWC

Bob Weinstein and Harvey Weinstein, the original creators of MIRIMAX Films, which was sold to Disney in 1993, founded the Weinstein Company in 2005. TWC is an independent production and distribution known for its knack for taking home Oscars and ability to captivate audiences with offbeat, dramatic films. TWC also encompasses Dimensions Films, originally under MIRAMAX, and has recently stepped into the world of television production. [2]

Who’s Who: Key Executives

Bob Weinstein: Co-Chairman [3]

[4] Bob Weinstein

Harvey Weinstein: Co-Chairman [5]

[6] Harvey Weinstein

Dylan Sellers: President of Production

[7] Dylan Sellers

In September it was announced that Dylan Sellers is stepping down as President of Production after three years at TWC to pursue his producing career. Sellers is responsible for such titles as award winning August: Osage County and the recent release, St. Vincent.[8]

Stephen Bruno: President of Marketing

[9] Stephen Bruno

Stephen Bruno has served as President of Marketing for TWC for the past three years. He has recently been offered a position by Netflix to head their marketing department. After 7 years with TWC, his contract is up at the end of the year.[10]

New Releases [11]/ Box Office Results

The Weinstein Company released 14 films to date in 2014. In the US market these films have brought in $132,955,985 so far[12], making TWC the 8th highest grossing studio with 2% market share. TWC was ranked eighth in 2013, but they are down 2.5% market share from 2013[13]. Though the summer was a flop for films such as Begin Again[14] with Adam Levine, The Giver[15], and Sin City: A Dame to Kill For[16], TWC has five promising new titles in theaters this fall that could raise revenues and bring in awards for the studio. These titles include, The Disapearance of Eleanor Rigby, St. Vincent, Tracks, The Imitation Game and One Chance.

St. Vincent [17]

[18] Staring Bill Murray, Melissa McCarthy, Naomi Watts, and Chris O’Dowd, St. Vincent is the story of an unlikely friendship between two neighbors as they both struggle to find their way in the world.

The quirky comedy has already received Oscar buzz and high praise upon its debut at the Toronto Film Festival. It was released limitedly on October 10^th in 4 theaters and saw $109, 878 in box office sales.Upon it’s wide release on October 24^th, St. Vincent saw $7,746,596 in revenue in 2,282 theaters, ranking #6 in the box office overall that weekend. In its 9^th week, St. Vincent has made $40,749,905 domestically, and $41,346,602 worldwide. Just 1.4% of revenue was seen internationally.[19] This may have to do with Netflix’s deal with TWC to release the feature film for streaming on Netflix in France the same day as the US wide release.[20] The week leading into its wide release, Variety reported that St. Vincent lead the week in TV ad sales, spending $5.1 million [21].

[22]

The Disappearance of Eleanor Rigby [23]

The Disappearance of Eleanor Rigby: Him and Her is the classic tail of two people falling out of love.

[24]The Disappearance of Eleanor Rigby: Him and Her shows both sides of the story in this classic tale of two people falling out of love.

The Disappearance of Eleanor Rigby: Them stands completely alone from Him and Her with a fresh perspective on Conor and Eleanor's relationship

[25]The Disappearance of Eleanor Rigby: Them stands completely alone from Him and Her with a fresh perspective on Conor and Eleanor’s relationship.

The Disappearance of Eleanor Rigby is The Weinstein Company’s attempt to break the traditional templates of production. The Disappearance of Eleanor Rigby follows the relationship of Jessica Chastain and James McAvoy and consists of three feature length films from three different perspectives; his, her’s, theirs. Each film was created explicitly through editing, yet each film tells a completely different story and can stand on its own as a feature film. Him and Her were released on September 12th as a two part, 200 minute film, and Them was released on September 4th as a 123 minute film[26]. Though Eleanor Rigby has created quite a bit of buzz in the industry, the box office results have been anything but stellar. To date, the total revenue has been $985,007 worldwide. 59.7% of that revenue was seen domestically. Originally only in four theaters, by its 3rd week Eleanor Rigby was in 139 theaters, but is now only available in two.[27]

[28]

Tracks [29]

Directed by John Curran, Tracks tells the true story of Robyn Davidson, the woman who journeyed across the Australian Outback.

[30]Tracks tells the true story of Robyn Davidson, the woman who journeyed across the Australian Outback.

The Weinstein Company acquired the rights to Tracks, directed by John Curran after its premier in the Venice Film Festival. It premiered in the United States during the Telluride Film Festival and also made a favorable impression at the Toronto Film Festival[31]. Tracks was released in seven theaters on September 19th and grossed $21,544 opening weekend. After ten weeks in theaters, the film has grossed $4,878,242. Notably, only 10.5% of that revenue is from the domestic box office[32].

[33]

One Chance[34]

[35]One Chance is an original biopic about singer Paul Potts

One Chance tells the story of Britain’s Got Talent’s first winner, Paul Potts. It was originally released to stream on Yahoo before debuting in theaters.[36] This was an attempt by TWC to capture more audiences as the landscape of movie viewing is vastly changing. The financials of the TWC/Yahoo deal were not released, but ads were shown throughout the online screening.Theater chains were reportedly unhappy with this deal[37]. When One Chance hit the box office on October 10th, it saw $33,405 in 43 theaters. To date, it has grossed $10,889,830 worldwide, with only 0.8% domestic sales.[38]

[39]

The Imitation Game[40]

Benedict Cumberbach stars in the biopic of Alan Turing, a brilliant mathematician condemned for his homosexuality.

[41] Benedict Cumberbatch stars in the biopic of Alan Turing, a brilliant mathematician condemned for his homosexuality.

The Imitation Game is yet another British biopic about Alan Turing, a mathematician responsible for breaking Nazi codes during WWII. The film was produced by two first timers, Nora Grossman and Ido Ostrowsky.[42] There is already much Oscar buzz surrounding this film, and it was listed as one of AFI’s top films of 2014.[43] It was released on November 18th, and has already grossed $18,676,784. However, again only a small portion of those sales were domestic (5.5%).[44]

[45]

Shaking Up Distribution Models/ Future of TWC

“In today’s digital era, technology has developed and changed the landscape of how many people watch movies and TV,” -David Glasser, COO [46]

The Weinstein Company has always been known to push boundaries and play by their own rules. Due to the rapidly changing landscape of the media, TWC has attempted to capture audiences using unique distribution models. This fall, TWC announced they would be partnering with Netflix to release Crouching Tiger Hidden Dragon: The Green Legend. The second installment of the Crouching Tiger franchise will simultaneously be released in IMAX theaters and become available to screen at home on Netflix.[47]The industry saw similar shake ups with TWC’s Yahoo release of One Chance and the Netflix release of St. Vincent in France. As platforms continue to develop and media viewing continues to change, we should expect similar distribution disturbances and innovations from The Weinstein Company.

Sources:

1. The Weinstein Company Logo, Google Image. 12/1/14

2. About TWC, weinsteinco.com. 12/3/14

3. Bob Weinstein IMDB, IMDB. 12/3/14

4. Bob Weinstein Photo, Google Image. 12/3/14

5. Harvey Weinstein IMDB, IMDB. 12/3/14

6. Harvey Weinstein Photo, Google Image. 12/3/14

7.“Dylan Sellers Exits”, Deadline. 10/12/14

8.“Dylan Sellers Out”, Variety. 10/12/14

9. “Next Gen: 2012”, Hollywood Reporter. 12/4/14

10. “Netflix Courts Weinstein Marketing Head”, Deadline. 12/4/14

11. Now Playing, weinsteinco.com. 12/8/14