1. Read the case, keeping in mind the textbook topic(s) the case covers 2. Read the Case Analysis section of the textbook 3. Written Document a. Provide a BRIEF description of the situation b. Update the situation to today(2025) using library and/or online resources (the company web site is a great place to start) i. This means to take into consideration the geo-political and economic environment the firm is operating in NOW. ii. Compare and contrast now vs. when the case takes place c. Cite sources of data not included in the case, using APA format i. Use at least TWO peer-reviewed articles ii. Do NOT rely solely on what you know about the company iii. Other credible sources are: WSI NYT Wash Post The Guardian, the firm's web site and 10K filings (if pub Meet the new Teams video d. Answer the questions at the end of the case if any, in light of the topic of the chapter e. DO NOT spend more than 1/3 to 1/5 a page describing the situation. f. No more than 3 pages, excluding References and Cover Page. 4. Presentation a. No more than 15 minutes. b. 5-7 slides, including the introductory slide C. Address the important facts, decisions, recommendations d. If there is a recommendation needed, make one and justify it using analysis of facts. 5. Your written analysis and your oral presentation should be the same, with the written document providing more detail. 6. Who is your audience? Not Me. Your audience is middle and upper level management of the firm in question. 7. Who are you? An up-and-coming Management trainee who has been tasked with helping the firm to understand the situation in the case. 8:57 W N LTÉ till 87% CASE 6 Neliek 2023 strategy for Bowling ArabIS AT THE GRODAT Mistral for Direct plans whose prices and terms had varied over the years. Originally, all of the subscription plans were based on obtaining and returning DVDs by mail, with monthly prices dependent on the number of titles out at a time. But as more and more households began to have high-speed Internet connections, in 2007 Netflix began bundling unlimited streaming with each of its DVD-by-mail subscription options, with the long-term intent of encouraging subscrib ers to switch to watching instantly streamed content rather than using DVD discs delivered and returned by mail. As increasing numbers of subscribers gained access high-speed Internet connections, most quickly switched over to unlimited streaming subscription plans, enabling Netflix to avoid incurring the order fulfillment costs and postage costs associated with servicing tens of millions of DVD-by-mail subscribers. A second major shift in Netflix's strategy began in 2010 when Netflix started to expand its stream- ing service internationally, beginning with Canada. Entry into other countries followed quickly, as shown in Exhibit 4, and Netflix became a truly global com pany in 2016. Netflix had not entered the streaming market in China because of barriers erected by the Chinese government; Chinese officials steadfastly refused to issue Netflix a license to operate in China, preferring instead to control the content its citizens were allowed to see-for example, government cen sors required that an entire series of a multi-episode offering had to be approved before it could begin to be shown on an online platform. Aside from the cen sorship issue, most observers believed the Chinese government was also blocking Netflix's entry in order to protect aspiring local providers of Internet streamed content from foreign competition. The U.S. government had instituted restrictions precluding. all U.S.-based companies from having operations in North Korea, Syria, and Crimea. Netflix's experience with entering new coun- try markets had revealed that it usually took about two years after the initial launch in a new country or geographic region to attract sufficient subscribers to generate a positive "contribution profit"-Netflix defined "contribution profit (loss)" as revenues less cost of revenues (which consisted of amortization of content assets and expenses directly related to the acquisition, licensing, and production/delivery of such content) and marketing expenses associated with its streaming business (the company ceased all marketing activities related to its domestic DVD busi- ness prior to 2015). A third important shift in Netflix's business model and strategy began in 2011-2012. CEO Reed Hastings and other senior Netflix executives real- ized that there were low barriers to entry into the subscription-based video streaming business for movie producers and TV broadcasters that had over the years amassed big libraries of attractive content. Indeed, many of the titles that Netflix was streaming to subscribers were being licensed from these very EXHIBIT 4 Netflix's Rapidly-Executed Entry into New Geographic Areas Year September 2010 September 2011 January 2012 October 2012 September 2013 September 2014 March 2015 September 2015 October 2015 January 2016 Entry into New Geographical Areas Canada 42 countries in Cemal America, South America, and the Caribbean United Kingdom, Ireland Denmark, Sweden, Norway, Finland Netherlands Austria Belgium, France, Germany, Luxembourg, Switzerland Australia, New Zealand Јерап Spain, Portugal Italy Rest of the world-some 130 countries (but excluding the People's Republic of China North Korea, Syria, and Crime Source Company 2017 10K Report, 21. C-70 PART 2 Cases in Crafting and Executing Strategy same entities, and the license fees for these titles were rising rapidly, as content owners recognized that their title libraries had significant value to Netflix, Amazon, and others who were in the streamed enter tainment business and that they commanded sig nificant bargaining power to raise licensing fees as current licenses expired. Netflix executives further foresaw that the company was likely to be put at a significant competitive disadvantage when these con- tent owners concluded they could make bigger prof its from their content libraries by starting up their own video streaming businesses to compete against Netflix for subscribers in many country markets rather than licensing titles to Netflix The Netflix top executive team believed that when content-rich rivals entered the streamed enter tainment business (as they were certain to do at some point) and triggered a head-on competitive battle for subscribers that the winners would be those com panies that potential subscribers viewed as having attractive and fresh content they were willing to pay monthly or annual fees to watch. Furthermore, they were certain that when these rivals emerged, they would discontinue renewing their licenses for popu lar programs (especially TV shows) with Netflix, pre- ferring to use these titles to attract new subscribers to their own streamed entertainment services. These realizations resulted in Netflix undertak- ing a long-term strategic initiative to change its port folio of titles from mainly all licensed to a portfolio of titles that was increasingly comprised of original content created, produced, and owned by Netflix. The company immediately moved to develop and continually strengthen its in-house content creation and production capabilities, but it also elected to supplement its internal efforts by entering into multi- year collaborative agreements with outside develop- ers and producers not owned by its rivals to license portions of their existing titles to Netflix and to pro- duce new original content that would be owned by Netflix or exclusively licensed to Netflix. Netflix started streaming its first original con- tent title, House of Cards, in February 2012; Ho of Cands, a political drama that ran six seasons, was a major hit with subscribers, garnered acclaim from critics and reviewers, and received 213 awards nomi- nations (Golden Globe, Primetime Emmys, Sereen Actors Guild, and others) and 35 overall wins dur ing 2013-2018. Netflix's spending for new original content mushroomed during the ensuing years, with total spending for new origienal and licensed content of $12 billion in 2018, $15 billion in 2019, and about $17-$20 billion in 2020-2022, of which roughly 85 percent was thought to be for original content. However, to increase subscriber satisfaction with its streamed offerings to each country, Netflix began a long-term initiative in 2018-2019 to stream title offerings to more and more countries in their native languages so that subscribers could better enjoy Netflix's programs. Initially, this entailed licensing content from local producers of movies and TV shows and bundling them with the titles Netflix was streaming to that country from its own title col- lection. But very quickly Netflix also began to part- ner with local producers of films and TV shows to produce original content for Netflix that would be built around local storylines and that would either be owned outright by Netflix or licensed for Netflix's exclusive use. Because of the positive local subscriber response to new films and series produced in local languages and containing locally appealing content, Netflix's library of titles (1) produced in languages other than English, (2) filmed in different locations, and (3) built around local country storylines grew significantly headed into 2023. To the surprise of Netflix executives, a P science-fiction show produced in Portugues for Brazil scored well with audiences ar world-this was Netflix's first instance o language program working well in location. other languages dominated. Local language produced in India, South Korea, Japan, Tark Thailand, Sweden, and the United Kingdom were among Netflix's most popular 2019 titles. An origi nal Spanish series titled La Casa de Papel, which was retitled Money Heist in English-speaking countries, developed a wide audience, appearing on the top 10 most watched titles in more than 70 countries. Money Heist began its fifth (concluding) season in 2021 and a spinoff show named Berlin was set to debut in 2023. Netflix discovered that often animated films traveled more predictably across countries than other types of titles. In 2022, Netflix launched seven of its Top 10 most-popular non-English films ever, and two of its Top 10 most popular non-English TV shows ever. It also launched five of its Top 10 most popular English language Original Series ever, and four of its Top 10 most popular English language films ever. Furthermore, in 2022 Netflix subscribers ||| О