Entertainment at Glance: Netflix SWOT Analysis

netflix swot analysis
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If you’re tired of analyzing barely known companies, then this tutorial will be a sight for sore eyes! This time we offer you a SWOT analysis of Netflix! So, take your time to learn if the company will surprise you in the year 2019!

Everyone knows Netflix! So, I won’t take your time describing this online streaming site with over 136 million users in 180 countries. I’ll just mention that Netflix is a story of incredible success and is the focus of numerous case studies. And one of these cases studies is at your disposal further in this tutorial!

   Netflix SWOT Analysis

So, why do we carry out Netflix SWOT analysis 2017 and Netflix SWOT analysis 2018? That’s right: we need to know what awaits the company (and all of us) in the year 2019. Ready to give your brain some work? Then, let’s get it started!

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      💪 Strengths

I bet that all Netflix’s competitors want to know what makes the company a success. The answer is simple – strengths:

  • Brand: Ask your friends, where you can watch the old shows like Friends or the newer ones, for instance, Orange Is the New Black; and nine out of ten will refer you to Netflix.
  • Original content: Have you ever watched Terrace House? Well, Netflix has introduced a second season, and you’ll surely like it. Netflix’s original shows are a great opportunity to learn about the places where you’ve never been and, probably, get inspired to enter a new terrain!
  • No commercials: Since some commercials are as long (or even longer) as a television show itself, customers switch to Netflix that is add free. Recently, Netflix has discussed an opportunity to add some commercials, but the audience rejected the idea; and this once again underlined the correctness of the company’s business strategy!

      ❌ Weaknesses

Of course, Netflix performance isn’t impeccable, which means that the company should consider some weaknesses:

  • Costly content: While viewers enjoy Netflix’s original shows, the company is looking for ways to reduce debt, since the cost is very high. Financial Times estimated that in 2017, Netflix invested $2.5 billion on securing original content rights.
  • New rating system: Guys, let’s be honest: Netflix’s new rating system is a mash! The thing is that you cannot assign stars to your favorite show, while thumbs up and thumbs down system does not accurately reflect one’s attitude to the content. Eventually, you’re recommended a “92%match” content that can make you sick.
  • Dependence on famous shows: It’s certainly normal that users subscribe to Netflix to watch famous shows. But the problem is that Netflix doesn’t own most of this original content. And once the rights expire, the site loses a substantial number of its subscribers.

      📈 Opportunities

Although weaknesses are numerous, there’s reason to cheer up, as many opportunities wait there to be grasped:

  • Expansion: The world is really big, and millions of users are longing for great content. So, why not increase the audience by 5 times through expansion into…China! I know that expanding into the Celestial Empire is a hurdle due to difficulties with licensing, but experts have suggested several solutions. And one promising strategy is discussed in the Netflix case study.
  • Niche segments: Diversity of modern audience is really amazing. But more important is the fact that Netflix can benefit from such diversity if it taps niche segments. For instance, there is a need for quality documentaries, exciting reality shows, and cinematic movies.
  • Growing number of broadband users: The number of broadband users around the world is striking, and there’s every reason to believe that it will increase shortly.

These days, it is difficult to imagine a place on the map, whose people are not connected to the Internet. And it is a great time for Netflix that can expand to various territories, especially those where English has a privilege of the second language!

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      📉 Threats

While all these opportunities sound pretty cool, let’s not forget that threats do exist:

  • Price increase: Elementary logic suggests that creating original content is costly, and part of this cost is passed on to the consumer in the form of increased price for the subscription. Therefore, there’s a threat that some customers will switch to competitors that are numerous.
  • Piracy: Piracy is not only about taking ships off the Somali coast. It is also about the illegal download of original content. And such unauthorized activity resulted in 5.4 billion downloads of content in 2016 alone. Needless to say that the leading content provider, Netflix suffered some of the most significant financial losses.
  • Competition: Still digital content niche is very attractive, and dozens of companies enter it, which leads to fierce competition. Presently, Netflix competes with five big platforms and a number of smaller ones. Want to know where the threat comes from? Then keep on reading!

   Netflix Competitors

These are five platforms that are considered to be Netflix biggest rivals:

  • Facebook
  • Amazon
  • YouTube
  • Hulu
  • HBO

And these are five streaming platforms that boast they can offer “more than Netflix“:

  • Acorn.tv
  • Crunchyroll
  • Fandor
  • Mubi
  • Tubi

Will they outperform our favorite streaming site? We’ll see…

In the meantime, we can expect that Netflix will continue its triumphal march through the digital media space. Of course, times are hard, and the competition is tough. But nothing can be better than a good business reputation, customer loyalty, and a touch of individuality. Well, nothing can be better than Netflix!

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