Adrian Zaragoza

Background Netflix was founded in 1997 in Scotts Valley, California by Reed Hastings and Marc Randolph Specializes in DVD rental by mail and streaming media with monthly membership fees Available in over 190 countries Not available in China, Crimea, North Korea, or Syria

Business Model-DVD Rental At its peak, Netflix operated 58 automated distribution centers Receive the DVD in the DC, check if it works, and either ship it to another customer or store it 97% of the US customers would receive a new DVD in one day Many Customers-Economies of Scale Netflix: 23 million customers with an infrastructure of 300 million Blockbuster: 1.3 million customer with an infrastructure of 300 million

Business Model-DVD Rental 125,000 unique DVD titles Long Tail

Business Model-Streaming In 2007, Netflix introduced streaming media Media is delivered to the customers straight into the customer’s electronics via the Netflix app Smart TVs, smartphones, game consoles, DVD players, PC, TV streaming adapters (Roku, Fire Stick, Chromecast, etc) Netflix partnered with Amazon Web Services to grow without the need to add any data centers 3.14 petabyte and growing! Netflix licenses media from the studios Crowdsourcing

Data Data Data Netflix has access to a tremendous amount of data! DVD Rental Service Cinematch Netflix tracks the customer’s queue and rental history Customer writes a review on the movie/show Netflix is better able to recommend media to the customer Helpful with demand planning for dvd copies Streaming Viewing history Recommend media to the customer based on the viewing history Target each customer with a specific trailer

Data Data Data Investments Original Content Flash Storage Looks at actors’ names and title genre to estimate the audiences in Netflix for a new show Renewals Original Content Monitor customer attitudes toward a series over time to determine new original content investments Flash Storage Nightly analysis to determine which titles will be in high demand the next day and uses flash storage, more expensive but faster than hard drives

Challenges DVD Rental Service Streaming Netflix vs Walmart vs Blockbuster Dying service Streaming Competition from Amazon Prime, Hulu, Budu, Crackle, HBO, etc Licensing costs and limited availability of movies/shows compared to dvd rental service Longest tail to a long-enough tail International license Windowing Bandwidth caps

Opportunities Deals for complete ownership of the media Generate more revenue streams More original content China would help Netflix increase its members iQiyi licensing deal

Question 1 In the early stage, which company was becoming a threat to the DVD rental service? A. Amazon B. Comcast C. Blockbuster D. Red Box

Question 2 Which software did Netflix use to gather and filter the media reviews? A. Cinematch B. Crowdsourcing C. Amazon Web Services D. iQiyi

Question 3 Where was Netflix founded? A. Palo Alto, CA B. Scotts Valley, CA C. Los Gatos, CA D. Los Angeles, CA