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 87% ↑ LTË CASE 6 Netto's 2023 Strategy for Betting Rivels in the Global Market for Streamod Video Subscribers watched more returning season titles and sequels to popular films than ever before across a broad range of genres-film, drama, local language series. and animation. Netflix's Award-Winning Original Content From 2014 through 2023, Netflix received 132 Oscar nominations in 24 categories and recorded 22 wins in 13 categories. Counting Academy Awards, Emmy Awards, Grammy Awards, Golden Globe Awards, Screen Actors Guild Awards, America Film Institute Awards, British Academy of Film and Television Awards, and Peabody Awards, pro- grams streamed and/or produced by Netflix won 265 awards from 619 nominations during the same period. As far as Netflix top executives were concerned, the more viewer hours spent watch ing Netflix originals, the more critically acclaimed reviews of its original titles, the more award nomi nations, and the more award wins, the better. All contributed to improving subscribers' experiences with Netflix and to stimulating subscriber growth, which in turn resulted in higher company revenues. better operating margins, bigger internal cash flows from operations, and more funds available for creat ing more new original content or licensing outside content going forwards. Netflix's Use of Viewership Tracking and Recom mendation Software to Enhance its Engagement with Subscribers Early in Netflix's history, the company had developed proprietary software technology that allowed members to easily scan a movie's length, appropriateness for various types of audiences (G, PG, or R), primary cast members, genre, and an average of the ratings submitted other subscrib ers (based on 1 to 5 stars). With one click, members could watch a trailer previewing a movie or original series or TV show if they wished. Most importantly, perhaps, were the company's proprietary algorithms that created a personalized "percentage match for each title that was a composite of a subscribers' own ratings of previously viewed titles, titles the member had placed on a "watchlist" for future viewing, and the overall or average rating of all subscribers (sex- eral billion ratings had been provided by subscribers over the years). Subscribers often began their search for titles by viewing a list of personalized recommendations that Netflix's software automatically generated for each member. Each member's list of recommended titles was also partly the product of Netflix-created algorithms that organized the company's entire con- tent library into clusters of similar movies/TV shows and then sorted the titles in each cluster from most liked to least liked based on subscriber ratings. Those subscribers who favorably or unfavorably rated simi- lar movies/TV shows in similar clusters were cal egorized as like-minded viewers. When a subscriber was online and browsing through the selections. the software was programmed to check the clusters the subscriber had previously viewed, determine which selections in each cluster the customer had yet to view or place on watchlist, and then display those titles in each cluster in an order that started with the title that Netflix's algorithms predicted the subscriber was most likely to enjoy down to the title the subscriber was predicted to least enjoy. In other words, the subscriber's ratings of titles viewed, the titles on the subscriber's watchlist, and the title rat ings of all Netflix subscribers determined the order in which the available titles in cach cluster or genre were displayed to a subscriber with one click, sub- scribers could see a brief description of the content. of each title and Netflix's predicted rating (from I to 5 stars) for the subscriber. When subscribers came upon a title they wanted to view, that title could be watch-listed for future viewing with a single click. A member's complete watchlist of titles was immedi- ately viewable with one click whenever the member visited Netflix's website. With one additional click, any title on a member's watchlist could be activated. for immediate viewing. Netflix management saw its title recommendation software as a quick and per- sonalized means of helping subscribers identify and then watch titles they were likely to enjoy. Netflix's subscriber tracking data indicated that 80 percent of subscribers' watch choices came from their personal recommendation engine. Over the years, Netflix had continually invested in developing new software tracking capabilities and refining its existing capabilities. As of 2023, Netflix had data pertaining to The titles each subscriber had viewed in the past several days, the past week, the past month, the current calendar year, the past calendar year. and the entire period the subscriber had been a member. The subscriber's racings of each title. The titles on the subscriber's watch list. R C-72 PART 2 Cases in Crating and Executing Strategy The number of times each title had been viewed by all subscribers in both each country and world wide the past several days, the past week, the past month, the current calendar year, the past calen- dar year, and the entire period that title had been on Netflix. • The total number of hours subscribers spent watching Netflix titles for each month of each year in cach country and worldwide. Netflix management relied heavily on its view ership tracking data for each title to guide decision- making on how to allocate upcoming expenditures for new original content. For example, if season 1 of a new original series was highly popular with subscrib ers, the series was renewed for a second season, and if a new series failed to spark widespread viewing and garnered only small audiences, with declining views of succeeding episodes, the series was canceled. If a new original series or film was viewed by 40 to 70 million subscribers in the first few weeks or months or if its viewership built significantly over a 4-to12- month period, management was likely to invest in the development of a second season of the series or sequel to the film. There were also situations where a popular series or film would trigger investment in a new original series or a new movie in the same genre (action, suspense thriller, mystery, historical drama, science fiction, or adult comedy) for release as soon as production concluded. In addition, Netflix's title tracking data revealed there were very big differences in the 20 to 30 most watched titles from country to country. This was partly because of (1) the different languages spoken in different countries and the varying percentages of subscribers that understood storylines produced in one language versus another and (2) varying subscriber preferences from country-to-country for some types/genres of movies, series, and documen taries versus others. This caused Netflix executives to quickly conclude that a strategy of streaming much the same number and combination of titles to all countries was inferior compared to a strategy of customizing the types of titles streamed to each country to match up well with what each coun try's subscribers were watching and to discontinue streaming of titles not watched or watched very infre quently. Thus, it became standard practice at Netflix to use the title-viewing data for each country to guide decisions of which newly available titles to stream to which countries and further to make changes in each country's title mix as shifts occurred in the viewing hours devoted to particular genres and the popularity of newly released titles. However, there was a second big reason why there were differences in the titles streamed to differ ent countries. Headed into 2023, Netflix had bulked its original content offerings up to a total of 3.100+ titles, but its streaming library also included a sub- stantial number of licensed movies and television shows. Worldwide, Netflix was said by one source to have the rights to 13,612 tities; another source said the total was about 17.000 titles. But whatever the total number of titles that Netflix had in its over- all content library, the company's licensed rights to stream any given a title typically applied only to certain countries and only rarely was global Consequently, viewing hours, licensing rights, and the languages spoken/understood were factors in causing the number of titles streamed to different countries to be different. As of early 2023, the number of titles Netflix streamed to each of the 241 countries where it had subscribers varied widely-according to one from a high of 5,087 in the United States to 908 in Sudan and according to another so ering only 100 countries from a high of 6 in the United Kingdom to a low of 4,590 Norway, NETFLIX'S STRATEGY IN 2023 Almost 5.2 billion (64.4 percent) of the world's pop- ulation of over 8 billion people used the Internet as of January 2023. However, the size of the Netflix's near-term market potential for securing stream- ing subscribers worldwide was close to the number of people/households currently having high-speed wired and wireless Internet service. In many parts of the world, smartphones were a primary gateway to the Internet, and in 2023 the number of global smart phone users was estimated at some 6.8 billion peo- ple, although not all of these could access high-speed Internet service. But with Netflix having only about 231 million subscribers, its current membership rep resented only a small fraction of the total global mar ket it was in a position to address. ||| О ୮