Netflix rate of growth in developing markets outside the US is highly impacted by domestic players and regional competitors functioning on the same business model. Hence, there is limited scope for Netflix in the international markets due to local competition and lack of an exhaustive media library with access to local content. This makes it significantly less compelling in markets that are mostly newly launched.
Rivalry from other media companies
The value of Netflix comes from the content that it offers to its subscribers. Many other media companies competing against Netflix are reluctant in selling their content to streaming service providers. For example, Time Warner, an American cable television company, stressed on extending the time between the original air time of a show on television and the running of the same on video on demand services like Netflix.
Brand Resurgence Strategies of Netflix
For content marketing brands like Netflix, content is the centre of all growth and opportunity. If the content offered is not compelling enough, then the audience would lose interest and switch to other brands offering better content. Netflix has been able to maintain a strong subscriber base worldwide and is one of the few brands who have already found success in this industry with cutthroat competition (Teece, 2010). The strategies adopted by Netflix to transform the challenges faced by the brand into opportunities for sustainable growth and development have been summarized as below:
Quality over Quantity
Netflix chose to offer the best content to its customers without compromising on the cost because it understood that focusing on higher quality content even at higher prices is far better than offering limited/average content at lower prices. The company’s deal with Disney for exclusive rights to streaming costed a whopping $300 million but this investment was positive to give exponential returns given the huge passion and demand for Disney’s content. With Disney’s charm and influence on audience, Netflix saw this investment as an opportunity to create an impact on potential customers and build a bigger subscriber base in one swoop (Mithas and Lucas, 2010).
Knowing the audience
To market the product effectively, reaching the right customers is very important. For example, while marketing products for children, it is crucial to think not only from the point of view of parents, but also from the perspective of a child. If children in a house demand to see a movie like The Lion King immediately, then what would be the state of a parent. Hence, to win over the loyalty of parents, Netflix focused on understanding the desires of their children and positioned the brand accordingly to lock their loyalty and willingness to purchase content from Netflix (Bell and Coren, 2007). Giving subscribers that content that they want, demand and desire is the smartest mover for long-term sustainable growth of business.
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