Netflix Rise vs Blockbuster Fall

Before we get going with the analysis part we are going to analyze Netflix in two stages!

Enterprise to Overarching

Any analysis of Netflix takes its root in history. And the history of Netflix explains a lot about what is about to happen. In January of 2012, Netflix had over 20 million subscribers and it was an enterprise of over 4200+ employees and had a $4.12 billion revenue. A month later they put together a presentation on their prospects for the company in less than 12 months. They had plans to reach US TV all the way to DC.

Welcome To Netflix’s 2 Billion Dollar War

So what happened? We shall find out. Shortly after in February 2013, Netflix was subject to a public vote and as the stock opened on the day, the stock skyrocketed from around $41 per share to close at around $99 per share. Some had hoped that the massive increase would prove to be a good buy, but there were also many many great rumors that came out of the large user base where investors showed their interest in buying Netflix shares. The investors decided to take the leap into the future with the price rise. We can clearly see the sharp ascent in Netflix shares as the price change according to the day’s volume in the next few days.

Out Of This World

The biggest reason for the sharp rise was because of Amazon and Apple who have agreed to work together to produce new kinds of streaming products to rival Netflix and other entertainment giants. The main result of this project became an upgrade that will access 20 of Netflix’s current content. In one day investors gained a 58% return out of one share so $16 billion was raised in a little over a week. Therefore, Netflix was to become the most valuable technology and streaming service in the world.

Unfortunately, Netflix didn’t get there because of the battle of Amazon, Apple, and Google. These giants entered into the field of entertainment production and licensed content. Netflix’s attempt to outdo these players finally came to an end in 2013 when they launched a trial of 700 new shows on Netflix.

Perhaps the problem is something else… Netflix then found itself with a spectacular problem. They are competing with the entertainment giants which are already enjoying a lot of power from their impact on entertainment devices and systems. Hence, the only strategy they have to change the news industry or the entertainment industry is to try and be first and to own more shows. And they lost. Unfortunately, Netflix understood that they have a gamble game with their decision to launch the trial. Once the trial is over, the company was likely to be competitive again as large players like Apple and Amazon will enter into the industry. This might change everything about the future of Netflix. So, they made their plans pretty clear. Netflix came out with a mission to attract content from writers, directors, producers, and other businesses and become the dominant player of content.

Warfare And Entertainment Production

Netflix had a plan to dominate the company by becoming a dominant player in global entertainment production. While they did not have more content than some of the other players Netflix did have a way to dominate the market of content. But their biggest problem will be that they have to take over the producers of entertainment content.

And, there is a larger problem. As the company got more lucrative deals, they collected more shows to produce. Eventually, this will lead to streaming being everywhere. Netflix started with characters such as Faith Ford, the incredible Leslie Jones, and many more, but once they are at distribution and featuring in movies, most well-known faces will have more power.

Analyzing Hollywood

The most difficult part is to analyze Netflix but Netflix went to a great effort to come up with ways to become the dominant player in the entertainment industry. They entered into many deals and acquired thousands of shows which made the world talk about Netflix’s future. In a global way, they could get to something like good production of shows that would rival not just the competitors but the entire global entertainment industry. However, they soon found themselves in a trap.

The problem is that Netflix is investing a lot of money in content production when the company hardly has money to spend on content production. Moreover, the popularity of Netflix would eventually bring a price rise because, with more popular content, the revenue would decrease. Also, losing producing power of their original series would make them susceptible to new competitors like Amazon and Google. Hence, Netflix decided to take a programmatic strategy of their own. They are spending 1.7 billion dollars this year as it’s more than 1.4 billion dollars in 2011. Moreover, in 2017 Netflix got rid of the 3-1 split and agreed to increase the costs. Due to the decreased profits, Netflix took this drastic action to increase the profits.

So there we have it. It was a long journey for Netflix which started from enterprise to overall. We had discussed how Netflix was becoming the world’s largest streaming service so we went back to