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. 8:58 W Netflix's strategy in 2023 was focused on Cracking down on the roughly 100+ million subscribers who shared the password for their account with individuals in other households unless they paid an "extra-member" fee to do so by switching to a paid sharing account. ⚫ Launching its Basic with ads subscription plans in more countries as fast as its marketing personnel could recruit companies to allocate advertising dollars to programs Netflix was streaming. Netflix executives were convinced that over the long-term advertising-supported streaming would become a major new revenue source for Netflix, enabling the company to achieve faster revenue growth than from relying solely on acquiring more subscribers and charging higher monthly subscription prices. Putting greater emphasis on producing higher quality original movies and original series in-house and in collaboration with outside movie and TV show producers with demonstrated capability to produce good quality content that would please subscribers, boost subscriber retention percent- ages, and help drive faster subscriber growth. Netflix's Revised Subscription Pricing Strategy in 2023 Going into 2023, Netflix offered four types of stream- ing membership plans in the United States ⚫Netflix Basic with ads for $6.99 per month. This plan allowed streaming for only one device, had 1080p video quality, and did not include access to high-definition viewing. Netflix Basic (without ads) for $9.99 per month. This plan also allowed streaming for only one device, had 1080p video quality, and did not include access to high-definition viewing ⚫Netflix Standard for $15.49 per month. This plan allowed simultaneous streaming for two devices in the same physical location and permitted high- definition viewing. Subscribers who engaged in password-sharing and wanted to simultaneously stream a program to two devices in different loca tions were expected to pay an extra fee of $7.99 per month ⚫Netflix Premium for $19.99 per month. This plan allowed simultaneous streaming for 4 devices in the NY 87% same physical location and permitted high-definition viewing. Premium plan subscribers who engaged in password-sharing and wanted to simultaneously stream a program to devices in are locations were expected to pay an extra fee of $7.99 per month per user in a different location, up to a maximum of two users (equal to an additional $15.98 per month). In those countries where Netflix had begun crack- ing down on password-sharing across households in different locations, subscribers were notified by email about the limitations on who could access their account outside their household and to inform them about the availability of paid account-sharing options and the associated fees. Netflix expected that some users in each market would cancel their account when the paid sharing fees were rolled out. But it also expected some account-borrowing households would either pay the "extra member" account-sharing fees or acti- vate their own standalone accounts, such that over time the company's revenues and the number of subscribers would grow in each country where paid account-sharing was instituted. On September 30, 2023, Netflix closed down its disc mailing business. The company canceled the subscriptions of members who were on a DVD- only plan. Members that were signed up for both streaming and DVDs were changed to streaming only plans. Netflix recommended 3 Mbps of download speed for standard definition streaming. 5 Mbps for high definition, and 25 Mbps for 4K Ultra HD. Outside of the United States, the monthly prices for Netflix's different subscription plans varied con- siderably in terms of US. dollars. As of April 2023, the Netflix Basic with ads plan was still early in the process of becoming an option internationally- introduction of the Netflix Basic with ads plan began in late 2022 in 12 countries. The monthly cost of the Netflix Basic plan varied from lows of $1.72 in Pakistan, $2.29 in Egypt, $2.38 in Kenya, and $2.40 in India to highs of $8.99 in Uruguay, $9.50 in Sweden. $9.68 in Singapore, $10.59 in Barbados, $11.25 in Greenland, $12.78 in Switzerland. In most countries the monthly price for Netflix Basic was in the $3.99 to $7.99 range. The monthly prices for the Netflix Standard plan ranged from lows of $3.06 in Pakistan, $5.19 in Turkey, $5.55 in Kenya, $5.99 C-74 PART 2 Cases in Crating and Executing Strategy in Bolivia, $6.02 in India, and $6.66 in Argentina to highs of $12.38 in Sweden, $12.71 in Portugal. $13.24 in the United Kingdom, $13.78 in Spain and Germany, $14.31 in Monaco, $16.24 in Denmark. and $20.29 in Switzerland. The monthly price inter- nationally for the Netflix standard plan was typically in the $7.99 to $10.99 range. The monthly prices for the Netflix Premium plan ranged from lows of $7.82 in Colombia, $7.83 in India, and $7.99 in Venezuela and Nicaragua to highs of $19.08 in Austria, $19.99 in Puerto Rico, $21.23 in Denmark, $22.26 in Ireland, and $26.73 in Switzerland. The monthly price for Premium was in the $9.99 to $15.99 range in most countries. In recent years, there had been a very gradual shift toward the highest-priced premium plan, a trend likely being driven by more households pur- chasing big-screen ultra-high-definition TVs. Netflix executives expected that the prices of the various subscription plans in each country would likely rise over time, thereby helping boost the global monthly average revenue the company received per paying subscriber. Netflix tested a cheaper mobile-only $3 a month plan in 2018 in India, one of its key developing mar kets because of the size of India's population and the country's heavy use of mobile devices for video streaming. The $3 mobile-only plan test in India was successful in boosting subscriber growth and in increasing member retention, prompting Netflix to expand its low-priced mobile offering to Malaysia and Indonesia in 2019, the tests in these countries also positively impacted subscriber growth and mem ber retention. Later, mobile-only plans were tested in other large population countries where wired high- speed Internet connections were not widely avail able and where mobile devices were frequently or exclusively used for video streaming. In 2022, Netflix announced that about 40 percent of its subscribers watched a Netflix program streamed to a mobile phone at least once a month. Netflix's Strategy to Improve the Quality of Its Original Content in 2023 The overriding objective of Netflix's spending to pro- duce and license new titles was to deliver a broad, diverse slate of content to entertain, please, and engage subscribers, add value to their subscription, and attract new subscribers. As new CEO and former Chief Content Officer Ted Sarandes noted, "We're bringing out something new pretty much every day on Netflix-multiple titles, multiple movies, multiple series and across every disciple of television, from original Japanese anime in Japan, Mexican novellas out of our Mexico group, our animated series, ani- mated features, big-budget action movies-everything you want to watch, we're making. However, Netflix's viewership tracking software revealed that a meaningful fraction of the titles the company had produced in-house or licensed from outsiders over the past five years had attracted relatively small audi ences in a given country and/or in countries speak ing a common language and/or had received low ratings by subscribers watching the title. While some of these titles had been produced by "name brand" studios, a significant number had been sourced from studios with a weaker reputation for quality products and/or weaker ratings by subscribers. Hence, there was opportunity to keep the 2023 cash spending for new content acquisition to about $17 billion (including both original and licensed titles), trim the number of new titles for 2023, and get a bigger bang for the back. The plan devele by Netflix's new top executive team was (1 tail investments in new original content w studios whose titles had frequently attrac audiences and/or received weak ratings. (2 locate part of the savings to investments in deemed to have more interesting content an ence appeal that could be sourced from studios. strong production capabilities and/or consistently higher subscriber ratings, and (3) to identify ways to streamline the in-house production process and lower the production costs of many titles, especially those with multiple episodes-the costs of the episodes in some titles (like The Crown) were said to range as high as $10 million, while the costs of episodes in other titles were said to be as low as $1-3 million per episode. Netflix's top executive team believed that it was feasible to introduce a smaller but more impact- ful number of new titles in 2023 for less than was spent in 2022 and allocate the savings to boosting the company's operating profit margins-one of the company's primary objectives for 2023. While Netflix had every intention of continu- ing to partner with cutside producers in specific countries to produce new titles for audiences in ||| O Г %