Netflix is among the most successful online entertainment brands. However, the company has achieved this success after having chased the target for several years. International growth has not come so easy for Netflix. However, since 2016, its audience size and global popularity have climbed fast. There are several reasons behind it. Apart from original content and an easy to use interface, the company has also focused on marketing. To a certain extent the success of Netflix can be attributed to its success at creating the image of a customer centric and modern brand. Revenue and net profits of Netflix have risen in the recent years. Impressive growth was a result of successful targeting and strong customer connection.
There is enough competition in the online market and apart from the social media channels and gaming, various other platforms are also competing with Netflix for market share. At a point analysts had predicted that the market had saturated and at least in US, Netflix would be unable to find farther growth. Netflix on the other hand has continued to grow its audience and business quite against the predictions. Technology does have an important role to play and so is Netflix’s focus on user’s taste and content quality. However, one other factor that Netflix is growing its audience faster is its marketing strategy.
Netflix is different than the other online video streaming sites. It is not the ordinary video streaming site but one with far better options for its viewers. Differentiation is one of the most important pillars of the marketing strategy of Netflix. The crowd of streaming video platforms has grown and Netflix did not want to remain behind the others. So, the best strategy was to offer a differentiated customer experience. The brand focused on making its products stand out and the overall customer experience much more attractive and elegant than the direct and indirect competitors. The main reason behind Netflix spending so much on original content rather than just using licensed material is to differentiate its services from others and keep users spell bound by offering them something that caters to their taste. It is not limited to just US but Netflix is offering original regional content in other regions too including India.
A large collection of original and licensed content is enough to keep the viewers glued to the screen of their internet enabled devices. Apart from that Netflix has also invested in making its interface look better than others. The user interface apart from being simpler offers a superior experience. Netflix serves content in SD as well as HD and UHD. Depending upon the plan, the quality of videos differs. However, in terms of content the users are exposed to a large range of choices in both english and some other regional languages. Customer experience is very important in this era both in terms of marketing and sales.
Netflix has benefited a lot from word of mouth marketing. It is however, a result of its focus on customer experience. The outstanding customer experience has led to very high level of popularity and faster growth. In both the online and offline environment, the role of customer experience in marketing has grown critical. It is why all the major brands are investing in improving the customer experience. Netflix user interface offers suggestions, parental controls as well as more features to make online viewing a superior experience.
Apart from word of mouth marketing, netflix has been able to attract a lot of buzz in the media as well. Some of it can be attributed to its fast and enormous growth which already brought it into the limelight and the rest to its large base of original content targeted at both domestic and international users. From movies to multi-season series, from action to comedy and several more genres, as well as documentaries and docuseries, Netflix has everything to attract modern viewers including sports fans. The number of choices is definitely larger and the range better on Netflix than the competing streaming video platforms and in many cases even the cable television. Its product offerings are targeted at the users who have traditionally depended on TV for their entertainment.
While Netflix is not trying to be a replacement for TV, still there is a lot on the platform which competes with TV directly except news. Its original content has become a major contributor to its rising demand . Since it is original and of superior quality, substitutes are generally not available which works to grow the demand among users. Analysts have shown concern over the huge bet that Netflix is placing on original content and the huge chunk of money it invests in producing original content. However, investing in original content has also helped Netflix build a large and loyal user base faster. Despite all the concerns expressed regarding Netflix’s expenditure on original content, it is the central attraction of the platform and primary driver of demand.
Netflix is targeting mainly the youth segment of viewers. It is mainly the millenial users who are its main target marKet. However, apart from individual users, it is also targeting middle and high income families. The lifestyles of people have changed a lot in last one decade. Part from having busier lifestyles, people’s entertainment needs have also changed. Now, most people want entertainment which they can access anywhere and everywhere as per their need. A very large proportion of the millenials users are accessing entertainment on the internet. While social media is ahead of all in terms of engaging the millenial users, other online entertainment channels are also attracting millenial users in very large numbers.
The largest market of Netflix is US which generates the largest part of revenue for the company. However, the business of Netflix is divided into three segments that are – domestic streaming, international streaming and domestic DVD. Netflix also spends on creation of new and original content. In 2017, it spent 981.3 millions on research and development. Apart from that the brand employs paid marketing channels for marketing and promotions. In 2017, it spent around 1.28 Billion Dollars on advertising of which around 1.1 Billion went to advertising.
Another important promotional channel for Netflix is social media which the company uses to engage its loyal customers and to promote its new programs before its global audience. Facebook has played a very important role in its social media marketing strategy. Netflix also uses Twitter, YouTube and other social media channels for the promotion of its products and brand. Overall, the multichannel marketing strategy of Netflix has worked well because the number of total subscribers has grown past 139 millions. In the first quarter of 2019 more than 148 million paid subscribers were enjoying the services of Netflix in more than 190 countries. (Around 60 million paid streaming members in US and around 88 million international) Most important thing is that Netflix has created one of the most desirable online experiences and offers the audience more than it desires.
Netflix Annual Report 2017