Strengths

Brand Name

After ten years, Netflix has become the one and only brand name for online streaming content with a share price increase of over 6000% since 2007.

Large customer base

Through serving 190 countries, Netflix has access to over 100 million subscribers. This strength gives the company bargaining power when in talks with studios to secure exclusive content.

Original content

Through careful purchase, Netflix have secured numerous original shows that have appealed to audiences. In 2017, two Netflix shows are so popular they have pushed subscribers from 83 million to over 100 million in one quarter. Another great example is squid game when released in 2021.

Weaknesses

Cost of original content

While its original content creates a competitive advantage for the company, the cost continues to grow to support this content. In 2017, it is expected for Netflix to invest 2.5 billion only on securing original content rights.

Lack of rights to original content

Unlike many traditional television studios, Netflix does not own most of their original programming. Due to this, usually rights expire after a year and the original content can be shown on competitive services.

Environmental cost

Netflix has been ranked ‘D’ in terms of environmental awareness. This has garnered bad publicity for the company as rival competitors Amazon and Facebook use over 40% renewable energy with their services.

Opportunities

Expansion into China

Difficulties with licensing has left Netflix unable to enter China through traditional means.

Partnerships in Europe

To meet new European laws, Netflix can partner with the BBC and Canal Plus to gain access to a wealth of native-language European content and grow customers in local markets.

Growth of technology

With the growth of VR and 4K UHD content, Netflix has new ways to allow customers to access their content and provide further competitive advantages.

Threats

Increased competition

Facebook is the latest to try and take on traditional media by launching its own original content. Amazon, Hulu, HBO, YouTube are all competing for audiences to subscribe to their platforms. For Netflix, this will continue to develop as more companies seek to buy the latest ‘original content’ exclusively for their platform.

References:

• Bond, D. (2017) https://www.ft.com/content/0aa8f2fc-6339-11e7-91a7-502f7ee26895
• Bradshaw, T. (2017) https://www.ft.com/content/e8c742f2-6b34-11e7-b9c7-15af748b60d0