Netflix Keeps Focus on Expansion

The key issues that we have discussed in class have primarily focused on business development with the implementation of project management and the key factors of being successful as a company. For Netflix, the online streaming provider, has been facing a downfall in its subscribers after the subscription price increase and removal of its DVD by mail services. However, recently CEO, Reed Hastings, has been trying to improve Netflix by not only creating deals with its partner,CW Network and Weinstein Co, but he has also decided to expand their network with over 51 markets. Many of these ethical issues such as the cancelled subscriptions of many customers, have put pressure on Hastings and created a rising competition with other streaming services. Hastings is now trying to find a way to win more customers after the huge loss of over 800,000 subscribers. Hastings is also using the technique of forecasting by predicting the success of the company after the new projects have landed.

Hastings believes that by expanding over different markets and waiting for the fourth season of “Arrested Development” to come out, will help boost the companies overall success rate. However, I think that many other ideas need to be put in place. As being a Netflix subscriber myself, Netflix has many other things to take under consideration such as the quality of the videos or the selection of TV shows or movies available. Simply waiting and hoping for the new season of “Arrested Development” to become available to hopefully boost up the amount of subscribers is not a strong enough technique to have effective project management decisions. However, expanding Netflix to different countries was a very smart idea for Hastings to do. Hastings went out and broke down the structure of where Netflix was lacking based on customer expectations and is implementing different strategies to help increase revenue and bring back old subscribers. This is a very important part of understanding the correct procedures needed to be a successful project manager. Lets just hope that these decisions will help Netflix’s success in the future and continue to beat out the over priced video providers such as “red box”.

14 thoughts on “Netflix Keeps Focus on Expansion

  1. I agree with you that Netflix has to do a lot more than depend upon “Arrested Development’s” new season to come out. I think your idea on expanding around the world might help them but I believe in the end they are going to have the same problem of not appealing too many because of the content staying the same. I know they do not charge a lot but sometimes we are paying for something that we don’t use for a backup when we want to watch an old movie. I disagree with Redbox being the expensive options because people would prefer to pay for something on occasion than keep something not useful for cheap. I believe they need to come out with more content and think of a new strategy to compete in this market.

  2. As a previous Netflix customer, I would have to agree with the above comment. I was paying for streaming when I would never use it. I left like many others when they took the DVD’s away. While Netflix may have reduced their costs by getting rid of their on hand inventory and supplementing it with just in time inventory, I don’t think the trade off was beneficial and I believe the only way for Netflix to come back from this would be to bring the DVD’s back.

  3. I have yet to subscribe to Netflix myself. I’ve done the free month trial or have used friends’ accounts. The reason for this is because the selection Netflix offers. I agree with first comment that people would rather use RedBox on occasion over paying for a monthly service that doesn’t get used. Hasting’s idea to wait for the new “Arrested Development” series in order to boost sales, is a poor choice. One series alone is not going to help the company or its numbers. Instead Hastings should, as mentioned, expand its services worldwide and also expand its choices in movies. Netflix’s problem isn’t the price, it’s the movie selections. They need to be more up-to-date and instead of having DVDs sent to customer’s houses like they once were, Hastings should set up kiosks like Redbox so subscribers can have more movie choices and the option to watch the movie not through a stream.

  4. Netflix has Chosen to forecast well into the future by expanding into 51 different markets. In my eyes they should take a step back and use a qualitative method. Netflix needs to introduce a new streaming quality to help resolve the picture property and also think about bringing back the mailing aspect of their retail. Rather than bringing back movies, Netflix should move into the market of video games, this will help capture children and their parents as well as young adults. Not to mention it will help bring back previous subscribers for their repurchase and it will also be a nice treat for the new markets. Good luck Netflix, I still like you guys.(Chapter 4)

  5. This post in very pertinent, as many students are assuredly subscribers to Netflix. It is promising to know as customers that they seem to be conducting proper forecasting to ensure that it has staying power in the marketplace. The idea of expanding internationally is very solid. I have several international friends and I have never heard of a website quite like Netflix that they would have access to for movies and TV. Opening up to this market would also prompt them to expand their International Film selection, which would probably interest many existing customers. I also agree with edelmoni’s comment that Netflix should advance their streaming quality and open up to the video game market. I wonder what other of their 51 different markets they will be exanding to? ARe their methods more qualitative or quantitative? Who is currently their greatest competitor?

  6. From what you said about the plan for Netflix’s expansion does not seem like an ideal way to bring Netflix back to its formal glory. I feel as if they are coming up with a lot of short term goals when they need to think more towards the future and more outside the box. One of the issues mentioned was that some people were not subscribing to Netflix was due to the monthly fees that the consumers does not want to commit. So, why not give consumers the option of an one time payment to stream one movie, or one time payment to rent a DVD. They may have lost a lot of subscribers over a mistake, they can earn back the people’s trust slowly but surely.

  7. I agree with many of the above comments, that Netflix cannot depend on a show’s new season to increase the number of subscribers. I also think that becoming a worldwide company will definitely increase subscribers. While I am not a subscriber to Netflix, I have heard that there isn’t a good variety of movies to choose from and people don’t want to pay monthly when they don’t always use Netflix. If Netflix can tackle these two issues, I’m pretty sure it will take over the world.

  8. As a previous subscriber to Netflix, I agree with some of the above comments. I left Netflix because of them taking away the DVD’s. I also had a problem with the customer service as well. Most of the streaming shows and/or movies were from years back and not new ones that just came out to DVD. Redbox has been my movie rental of choice because it has a good variety of movies. However, since they started charging tax on the rentals I have started to slowly draw away from them.

    In terms of the article, Netflix’s decision to expand to other markets would be a good idea to try and bring back customers. However, I don’t believe it will help that much because they already have a bad reputation with their former and present subscribers.

  9. It’s very interesting in the first place that Netflix made the decision to alter their business strategy and operations, when they decided to do away with sending DVDS and opted to only let customers stream content. In aligning their business operations with other companies that also stream videos, they may have reduced costs but they have also lost a lot of the differentiation they had before. Although they have cut their operations costs down significantly, the effect was loosing 900 customers. I agree with many people in previous commets that advocated for having actually DVDs back or possibly being able to rent by DVD rather than have a monthly subscription. I wonder if that’s even possible logistically ?

  10. First off, I have been a user of Netflix for a few years now, and I did not even notice that they eliminated the option of having DVDs sent to your residence. I guess this goes to show that I simply use Netflix for the online streaming. My issue with Netflix was always that they had a limited selection of videos/television shows you could watch online. I always told my friends about the Netflix curse (or so I called it). I referred to it as this because every time you would want to watch a really good movie online through the site, it would never be on the ‘watch instantly’ menu.

    I believe that this is the true downfall. Netflix, although abundant in movies and television shows, does not have everything. People want everything. The idea of cutting cost by eliminating the mailing of DVDs might have been a good idea initially, but it clearly proved to be a bad choice made by Hastings. In terms of operations, they cut out an entire segment of what Netflixs was initially all about. Rather than having to organize a system of sending and receiving DVDs they just have to put them all online and let the users handle it from there. I feel as though this is the ultimate problem – taking away the idea Netflix was originally based on.

  11. There are a lot of “problems” regarding price to service relations at Netflix. Over the past few years of being a Netflix subscriber, I have had my fair share of disappointments. Ranging from selection of media, availability and formatting. Although I have had friends who were overcharged for Netflix services they did not use, and had problems with customer service and refunds; which is something that I have found in research to be a common occurrence. So it is no surprise to me that 800,000 individuals opt out of the mental torture of contending with Netflix.

  12. I feel for more customers to return to Netflix, they need to give customers what they want. Instead of implementing their own views of what the market wants, they need to conduct further market research as to want will work for them. The idea of axing the movie by mail service turned me off, as it did many others, and the company has suffered because of it. And thier online selection is quite limited. Overall, i think the expansion oversees is only one avenue to pursue and they should look domestically for more answers. Perhaps attempt what youtube is trying with the online tv channels.

  13. Good point on the forecasting, but it would seem Netflix was incorrectly interpreting the viewership data to predict their future trends. Although pairing with TV networks and expanding overseas was a wise decision to broaden the market after losing so many subscribers with the plan change, it is indeed not enough to bring Netflix back to its once dominant position in the field. Arrested Development fanatics may subscribe for the short time to access the content and will probably unsubscribe immediately resulting in no change in the membership numbers. But Netflix could possibly increase membership by implementing a Redbox option. Whatever their choice, it’s difficult to predict the trend of a company whose membership data is so turbulent as of late.

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