{"id":13334,"date":"2013-11-12T13:12:07","date_gmt":"2013-11-12T18:12:07","guid":{"rendered":"https:\/\/bejone03.expressions.syr.edu\/trf235\/?p=13334"},"modified":"2013-11-20T15:18:29","modified_gmt":"2013-11-20T20:18:29","slug":"netflix-2","status":"publish","type":"post","link":"https:\/\/bejone03.expressions.syr.edu\/trf235\/2013\/11\/12\/netflix-2\/","title":{"rendered":"Netflix"},"content":{"rendered":"
By Will Roth<\/pre>\n
\"Netflix<\/a>
Netflix logo – courtesy digitaltrends.com<\/a><\/p><\/div>\n
Corporate Headquarters<\/strong><\/p>\n
100 Winchester Circle, Los Gatos, CA 95032<\/p>\n
(408) 540-3700<\/p>\n
www.netflix.com<\/a><\/p>\n
\u00a0History<\/strong><\/p>\n
Netflix was founded in 1997 by software executives Reed Hastings and Marc Randolph. \u00a0Two years later, the company offered its subscription service of unlimited DVD rentals for a monthly fee. \u00a0Since its inception, Netflix has grown exponentially in terms of consumer popularity and financial revenue. \u00a0Today, over 40 million subscribers consume roughly 1 billion hours of content per month through the company. [1]<\/a><\/p>\n
Key Executive<\/strong><\/p>\n
\"Reed<\/a>
Reed Hastings Courtesy of Netflix<\/a><\/p><\/div>\n
Reed Hastings co-founded Netflix in 1997 and has served as its Chairman, CEO, and President since. \u00a0Prior to this, he founded Pure Software, which he then sold to Rational Software<\/a>. \u00a0Following 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<\/a> and remains a member of the California Teachers’ Association<\/a>. [2]<\/a> [3]<\/a><\/p>\n
Financials<\/strong><\/p>\n
Netflix made its initial public offering on May 22, 2002 with 5,500,000 shares at $15.00 each. [4]<\/a>\u00a0 As of November 15, 2013 one share sat at $349.78. \u00a0The company’s all-time high was $389.16. \u00a0However, it hasn’t always been a steadily increasing stock market commodity. \u00a0On November 30, 2011 its price fell to $62.37. \u00a0This came after the company’s decision to separate its DVD rental and streaming services. \u00a0After watching the stock fall, company executives decided to abort the plan. \u00a0Its stock recovered quickly and has climbed even higher than it was before the proposed change. [5]<\/a><\/p>\n
Innovation<\/strong><\/p>\n
Netflix is a company that always seems to be ahead of the curve. \u00a0After amassing 6.3 million members as a strictly DVD rental service, it launched its online streaming service in 2007. [4]<\/a>\u00a0 After hovering around $20 per stock for years, this development started the company skyrocketing, topping out at roughly $290. \u00a0This promptly fell after the announcement of Qwikster, which was the proposed streaming-only branch of Netflix. \u00a0While this was a failure, it was innovative nonetheless.<\/p>\n
Click here<\/a> to watch a BloombergTV<\/a> feature on Qwikster.<\/p>\n
Netflix has rebuilt its popularity and image largely through original content.<\/p>\n
\"latintimes.com\"<\/a>
latintimes.com<\/a><\/p><\/div>\n
House of Cards was the first heavily advertised piece of original content from Netflix. \u00a0“A Congressman works with his equally conniving wife to exact revenge on the people who betrayed him. [6]<\/a>” \u00a0The entire 13 episode first season was released at once so that viewers could “binge watch” it. \u00a0Many analysts questioned whether this was a good business decision, theorizing that viewers wouldn’t remain hooked long enough for Netflix to prosper financially. [7]<\/a>\u00a0 The numbers proved those doubters wrong. \u00a0In the financial quarter following the show’s debut, Netflix gained 3 million new subscribers. \u00a0In that quarter alone, the company made back its money on the program in which it had invested $100 million. [8]<\/a>\u00a0 The show received 9 Emmy nominations and won for Outstanding Casting, Directing, and Cinematography in a Drama Series. [9]<\/a><\/p>\n
\"pcmag.com\"<\/a>
pcmag.com<\/a><\/p><\/div>\n
Netflix also found success in its debut of the fourth season of the cult hit Arrested Development. \u00a0Executives attributed the bump of 630,000 new subscribers in the second quarter of 2013 to the show’s dedicated fan base. [10]<\/a>\u00a0 The season earned three Emmy nominations. [11]<\/a><\/div>\n
<\/div>\n
In addition to original content, Netflix has been innovative in customizing the user experience. \u00a0In 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. \u00a0Three years later, they had received submissions from more than 40,000 teams from 186 countries. [4]<\/a> \u00a0The prize was awarded in 2009, but the company never implemented the algorithm. \u00a0According 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]<\/a>“<\/div>\n
<\/div>\n
Also in the vein of user experience, Netflix recently added the option of multiple profiles to its streaming service. \u00a0Chief Product Officer Neil Hunt acknowledged that most accounts are shared, usually within one household. \u00a0In an effort to tailor recommendations to each user specifically, customers can now specify who is watching. \u00a0The service is free of charge and will also help Netflix in collected more accurate user data. [13]<\/a><\/div>\n
<\/div>\n
Competition<\/strong><\/div>\n
<\/div>\n
One might assume that Netflix is a competitor with cable providers. \u00a0CEO Reed Hastings has a different view. \u00a0In a letter to investors<\/a>, he outlined his company’s main areas of focus moving forward, breaking down its competition into two categories. \u00a0The first is “competitors-for-time,” meaning entertainment options that do not bid against Netflix. \u00a0While 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. \u00a0The other category is “competitors-for-content.” \u00a0The largest competitor here is HBO. \u00a0Hastings 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. \u00a0Hastings also lists Amazon, Hulu and others as competitors-for-content. \u00a0At the same time, he believes that there will be enough room for everyone. \u00a0“Many consumers will subscribe to multiple services if they each have unique compelling content. [14]<\/a><\/div>\n
<\/div>\n
On The Horizon<\/strong><\/div>\n
<\/div>\n
Netflix plans to build upon its success with original content. \u00a0It has renewed each of its original shows for second seasons, and has expressed desire to make another season of Arrested Development<\/em> as well. \u00a0“[We would] be delighted to produce a fifth season of Arrested Development<\/em>, if possible, given fan reaction.” \u00a0The company also plans to produce its own full-length documentaries and comedy specials and stream them exclusively. [15]<\/a><\/div>\n
<\/div>\n
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. \u00a0Though Netflix has not confirmed this, theater owners are wary that the development could put them out of business. \u00a0Ted 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.” \u00a0Currently, theaters have a 90 day exclusivity deal, wherein films cannot be shown anywhere else for three months. \u00a0But recent studies state that theaters make 96% of total revenue from a film’s first six weeks. \u00a0At the very least, we can expect Netflix to cut the amount of time between theatrical releases to streaming down to between 30-45 days. \u00a0This would spell greater profits for both Netflix and movie studios while only trimming 4% of theaters’ revenue. [16]<\/a> \u00a0At the very least, we can expect an innovator like Netflix to be on the forefront of the entertainment business in the years to come.<\/div>\n
Sources<\/strong><\/p>\n
[1] About Netflix<\/a><\/p>\n
[2] About Reed Hastings<\/a><\/p>\n
[3] Reed Hastings Profile – Bloomberg Businessweek<\/a><\/p>\n
[4] Netflix Company Timeline<\/a><\/p>\n
[5] Nasdaq<\/a><\/p>\n
[6] House of Cards imdb<\/a><\/p>\n
[7] Variety Binge Watching<\/a><\/p>\n
[8] The Atlantic Wire<\/a><\/p>\n
[9] Emmys\u00a0– House of Cards<\/a><\/p>\n
[10] Huffington Post Tech<\/a><\/p>\n
[11] Emmys – Arrested Development<\/a><\/p>\n
[12] Forbes<\/a><\/p>\n
[13] The Verge<\/a><\/p>\n
[14] Letter to Investors<\/a><\/p>\n
[15] Tech Crunch<\/a><\/p>\n
[16] Variety<\/a><\/p>\n
 <\/p>\n
 <\/p>\n","protected":false},"excerpt":{"rendered":"
By Will Roth Corporate Headquarters 100 Winchester Circle, Los Gatos, CA 95032 (408) 540-3700 www.netflix.com \u00a0History Netflix was founded in 1997 by software executives Reed Hastings and Marc Randolph. \u00a0Two years later, the company offered its subscription service of unlimited … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":295,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[97,1479],"tags":[2248,2243,2244,2242,212,2247,2246,2090,1057,1504,1626,1027,1743,2239,339,534,2245,2240,2241,1625,1746,1402],"_links":{"self":[{"href":"https:\/\/bejone03.expressions.syr.edu\/trf235\/wp-json\/wp\/v2\/posts\/13334"}],"collection":[{"href":"https:\/\/bejone03.expressions.syr.edu\/trf235\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bejone03.expressions.syr.edu\/trf235\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bejone03.expressions.syr.edu\/trf235\/wp-json\/wp\/v2\/users\/295"}],"replies":[{"embeddable":true,"href":"https:\/\/bejone03.expressions.syr.edu\/trf235\/wp-json\/wp\/v2\/comments?post=13334"}],"version-history":[{"count":25,"href":"https:\/\/bejone03.expressions.syr.edu\/trf235\/wp-json\/wp\/v2\/posts\/13334\/revisions"}],"predecessor-version":[{"id":17059,"href":"https:\/\/bejone03.expressions.syr.edu\/trf235\/wp-json\/wp\/v2\/posts\/13334\/revisions\/17059"}],"wp:attachment":[{"href":"https:\/\/bejone03.expressions.syr.edu\/trf235\/wp-json\/wp\/v2\/media?parent=13334"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bejone03.expressions.syr.edu\/trf235\/wp-json\/wp\/v2\/categories?post=13334"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bejone03.expressions.syr.edu\/trf235\/wp-json\/wp\/v2\/tags?post=13334"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}