On this day in 1953, the coronation of Queen Elizabeth II took place. This reminded us of a historical drama series about the reign of the Queen, called The Crown. You may have heard of it before, it’s available on Netflix as one of their Originals. Netflix has become such a large brand that some people can’t even imagine their lives without it anymore. So, here’s our brand analysis of Netflix.
- Name: Netflix, Inc.
- Type: Public
- Origin: Scotts Valley, California
- Founding date: 29 August, 1997
- Headquarters: Los Gatos, California, US
- Key people: Reed Hastings (Chairman, Co-CEO), Ted Sarandos (Co-CEO, CCO) and Greg Peters (COO, CPO)
- Key stakeholders: shareholders, institutional investors, employees, subscribers and content providers.
- Users: 208 million as of April 2021
- Revenue: $25 billion USD in 2020
- Brand design company: Gretel
- Areas served: Worldwide (excluding four countries)
In 2019, Netflix was the fastest growing brand in the US. With a 105% growth, raising the brand value to $21.2 billion. Netflix has built this brand through a very customer-driven approach. Over the years, changes have frequently been made, both big and small, to improve the user experience and friendliness.
Furthermore, they constantly incorporate personalization options in the platform, which contributes to their brand loyalty. For example, this year Netflix added a shuffle option for users who didn’t know what to watch. Netflix then chooses something based on their watch history. Netflix retains about 80% of its customers, making it one of the best companies regarding customer retention.
Besides being customer-driven, there are other factors as to how they largely differentiate from competitors like Hulu and Disney+. First, their first-mover advantage. Netflix has been in the online streaming industry for the longest, and that has helped their retention rate as well. Next, the company also produces its original series (like The Crown) and movies. Some of their original content, especially shows like “Stranger Things” and “Orange Is the New Black”, has helped convince users to keep their subscription.
Of course, Netflix had some failures too. For instance, they had to delete all user reviews. In addition, they tried to get users to share what they watched on Facebook, which wasn’t so successful. Apart from failed strategies, Netflix has also received criticism on multiple occasions. Some examples are controversial content and tax avoidance.
A genuine brand
Netflix started out as a DVD rental service. One of the reasons Netflix was created is because CEO Reed Hastings was once charged with a large fee for returning a movie late. Netflix had no late fees during its rental service days, meaning they had kept the customer satisfaction in mind from the beginning. As the CEO simply made something he and others would enjoy, the brand came across as more real.
Brand opportunities and threats
Netflix also deals with certain threats. For one, competitors are increasing every year. Now we have Disney+, which means Disney (an already established brand) took all their movies off Netflix. Secondly, due to government regulations, Netflix can’t enter big markets like China.
Netflix could improve by focusing more on region specific content and marketing. Sometimes it’s not worth subscribing if the selection is too small in a country, or if there are too few in their own language.
It comes as no surprise that Netflix is a very successful brand. It makes sense that with their brand reputation and global presence, their growth won’t stop. Although it’s still important that they’re careful, as many competitors will always try to overtake Netflix.