Team B4 KtC draft.docx.

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Kill the Company: Netflix Jenna Tran, Miriam Bandala, Carson Clark, Abby Vong, and Hassan Farah University of Washington, Bothell B BUS 475: Managing Innovation Section B Professor Denis Trapido 15 February 2023

Introduction: In 1997, Reed Hastings and Marc Randolph wanted to materialize renting DVDs by mail. Netflix was launched in 1998 where members could rent movies and be mailed to them. However, by 2007, millions of Netflix users could stream shows and movies whenever they wanted. Prior to 2010, Netflix was only available in the United States. However, soon the company started to expand their service into more countries. By 2016, Netflix became available "in more than 190 countries and 21 languages worldwide" (Netflix) with over 50 million subscribers. The expression "Netflix and Chill" was created by our culture in response to how widely known Netflix has become. Weakness and Analysis: Netflix’s mission is to “entertain the world. Whatever your taste, and no matter where you live, we give you access to best-in-class TV series, documentaries, feature films and mobile games. Our members control what they want to watch, when they want it, in one simple subscription. We’re streaming in more than 30 languages and 190 countries, because great stories can come from anywhere and be loved everywhere” (Netflix). However, Netflix’s usability, service quality, customer service, and subscription incentives have become stricter and less customer-friendly. The company continues to impose rules and regulations to prevent account password sharing and increase prices while providing the same compensation packages. Improve Usability: For how we would drive Netflix out of business, our team has a detailed plan. First, we would make Netflix easier to use so that we could better serve the company's members. There’s currently a supported device limit on Netflix, which implies that there’s a cap on the number of users who can stream at the same time. This limit is determined by the user's Netflix plan. For example, one user can stream Netflix under the basic plan and the basic plan with advertisements. In contrast, Netflix can be streamed at the same time by two users on the standard plan and four users on the premium plan. The main reason why Netflix has a supported device limit is because users share their accounts with non-Netflix members. However, over the last year, the company has explored many options to address this issue.

On February 8th, 2023, Chengyi Long, product innovation director, stated that over 100 million households have shared their Netflix accounts, which has impacted the company's ability to invest in new shows and movies. The company plans to have users set a primary location to ensure, “ anyone who lives in their household can use their Netflix account,” (Long) and “add an extra member sub account for up to two people they don’t live with — each with a profile, personalized recommendations, login, and password” (Long). However, to buy an extra user, it’s almost the same cost as the basic plan without advertisements, and it’s only available to those who have the standard or premium plan. Because the company earns less revenue when users share their accounts with non-Netflix members, it won't have as much money to invest in new shows and movies. Our team believes that we can better address this problem than Netflix. We would keep the supported device limit in place, but increase the number of users who can stream at the same time by 1. For example, 2 users could stream Netflix under the basic plan and the basic plan with advertisements, 3 users on the standard plan, and 5 users on the premium plan. Since we don't think it would make Netflix easier to use, we wouldn't have consumers set a primary location or buy an extra user. Improve Quality: Second, by improving our video and audio quality with the rise of 4K and HDR content, we could invest in providing our users with the highest quality video and audio experience. This includes upgrading its encoding technology, offering high bitrates, and providing more content in these formats. As well as enhancing our user experience, continuously improving the user interface and experience can help us keep subscribers engaged and reduce loss of subscribers. This could include adding features such as personalization, recommendations, and social sharing. We will also increase our transparency in our recommendations, Netflix uses an algorithm to give recommendations which our streaming service will also provide but will improve it by offering more information on why certain content is being recommended. This could increase user trust and engagement. Along with user trust and engagement to improve our quality and collaboration with content creators we can work more closely with the content creators, we could secure exclusive rights to new and diverse content which would differentiate us from

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competitors. Finally to improve our quality we will enhance accessibility features, making our platform more accessible to users with disabilities and this is a key way to improve our quality. This will include adding closed captions, audio descriptions, and other accessibility features. Improve Customer Service: Third, by enhancing the encrypting AI Customer Relationship Management (CRM) system on strictly focusing on the customer’s needs and wants to better ensure quality service is being provided to users. Seeing as Netflix is a subscription based company and makes its revenue from the reliance of user’s monthly subscription, customer experience is of great importance because users will depart when they become disappointed with the service, eventually get bored, or begin to question its significance. Even worse, users most likely do not even explain their decision to stop or make any other clue they are planning to stop subscribing. Netflix should work on gathering as much information back from it’s customers regarding their interests and actually allowing them to voice their opinion on what movies/shows they want on Netflix by adding built in AI surveys section where users can vote on potential movies to be placed on Netflix because user’s may feel as if they are part of the operations of Netflix as well as having the control in the route that the company takes making their reliance on Netflix much smoother. Another way to increase user’s experience would be to add a 24/7 help center in the “help” tab on Netflix where users can talk to AI representatives who behaves as a receptionist and gathers information until they are connected to a real Netflix official in answering their inquiries with fast ease and efficiency. This can greatly affect Netflix’s customer-relation seeing as Netflix is mostly customer- based, which would require Netflix in needing as much answers and feedbacks on their quality of service that they can obtain to ensure they are gaining and keeping more subscriptions than they are potentially losing or may lose. Revamp Subscription Plans: Lastly, Netflix has 4 separate tiers of subscriptions. The first plan is the basic plan with ads priced at $6.99/month, this plan includes ads with the inability to download episodes and movies. The video quality is good with a 700 p resolution. This plan unfortunately only allows one user and some of the

movies and tv shows won’t be available. The second plan is the basic plan priced at $9.99/month with unlimited movies and tv shows and downloads but only allows one user at a time. The video quality is good with a 720 p resolution. The third plan is the standard plan priced at $15.49 with unlimited movies and tv shows, downloads, allowing two users at a time. The plan has better video quality and a resolution of 1080 p. The last plan is the premium plan priced at $19.99/month with unlimited movies and tv shows with downloads and allows 4 users at a time. This plan includes the best video quality with a resolution of 4k + HDR. Netflix’s major problem is people sharing their Netflix accounts with people who don’t have a subscription. Although Netflix does provide multiple plans, according to Micharl Kennedy, they are considered “the most expensive streaming services”. In order to combat the high prices, we want to create another plan that collaborates with other streaming services and/or tv providers. A lot of people who invest in streaming services pay for multiple streaming services and sometimes tv providers too. Having Netflix collaborate with other companies will allow them to create a new plan giving people access to their streaming services at a lower plan. This could potentially decrease the amount of people who are Netflix sharing. Recommendations for Effective Management Practices: - Recommend two or more effective management practices to the “killer” organization. What would you as a manager do to make this organization effective in killing its “victim” company? Be sure to use at least one course material to support every managerial practice. Go beyond just naming the practice; rather, describe concisely what managers will do. This and #3 above are the most important aspects of the assignment. Threats to Our Idea's Success: - Nielsen, an audience data and analytics company, wrote an article in January 2023 that tracked total tv usage in the United States: 24.7% was broadcast tv, 30.9% was cable tv, 38.1% was streaming services, and 6.3% was other. It’s important to note that streaming services have been on the rise since 2011 and are currently dominating tv usage. The main streaming services that are listed in the 38.1% include Pluto TV, Peacock, HBO Max, Disney Plus, Prime Video, Hulu,

Netflix, and YouTube. This study also included an “other streaming” category that included a bunch of small streaming services. This data really opened my eyes in terms of the mass amount of streaming services that are being used. The biggest threat to the success of our idea is trying to gain subscribers in an overly competitive market. - Looking at this data, it’s easy to see who our biggest competitors would be when you dive into the companies that make up the streaming service percentage: youtube came on top with the most usage at 8.7%, netflix came in second at 7.5% usage, and hulu came in at 3rd with 3.4% usage. Like we previously stated in the weakness and analysis section, these main companies have been becoming less and less customer-friendly in terms of usability, quality, customer service and subscription incentives. Our plan to “kill” this big 3 of streaming and try to steal their subscribers would be to make our company goal to be more customer friendly in those areas. Benefits for You from Us: - Our streaming service and subscription plans are meant to serve the customers and not us. Users will not be limited to regional selections, outdated options, internet requirements, data caps, and lack of subscription value. Users should have access to an abundance of selections and perks that is not contingent on where they live, can access their account, and receive less benefits than what is paid for. We believe providing streaming services should be easily accessible, affordable, and manageable to the users’ needs. Even if a company has millions of subscribers, it is not fair to be stingy with what subscribers can have. Peer Feedback: (will do this once we receive the feedback.) Work Cited (just copy and paste the links here. We can deal with it later, so it’s alphabetized.) Jenna Tran: - Miriam Bandala:

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- https://about.netflix.com/en/news/an-update-on-sharing - https://about.netflix.com/en Carson Clark: - https://partnerhelp.netflixstudios.com/hc/en-us/articles/115000353211-Introduction-to-Netflix- Quality-Control-QC- Abby Vong: - https://screenrant.com/why-is-netflix-losing-subscribers/ - https://help.netflix.com/en/node/24926?ui_action=kb-article-popular-categories Dawson Pratt: - https://www.nielsen.com/insights/2023/streaming-services-remain-most-popular-destination-for- tv-viewing-in-december/ Hassan Farah: - https://www.business2community.com/customer-experience/the-relentless-pursuit-of-the-perfect- customer-experience-a-netflix-story-02240302? __cf_chl_tk=xUForie9WbLrGbk2zDtzCzHP0xXS40enzIoWmkcOfOs-1676405211-0- gaNycGzNC1A - https://www.cmswire.com/customer-experience/4-ways-a-crm-can-improve-the-customer- experience/ -

Team B4 KtC draft.docx.

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