Netflix Goes to Bollywood Case Solution
U.S. streaming video on demand (SVOD) industry in 2019
The U.S streaming video on demand market size was around $55 billion in 2019. By 2019, Netflix became a dominant player in the industry as the provider of streaming video on demand, but the competition in the industry had increased because of the merger of AT&T, Disney and Comcast in 2019. The power of these competitors had increased after the merger that put competitive pressure on other players in the market, such as: Netflix, Hulu and Amazon. As the average number of subscribers of Netflix was the highest in the industry as of 2018, but this situation was expected to change in 2019, as Disney+ launched by Walt Disney had set to offer SVOD services, and on the very first day; they got signed up by 10 million subscribers. (Paul Verna , 2019).
The attractiveness of the industry in the next 5 years
The forecasted five-year commutative growth rate is expected to be 15% in the next five years, i.e.from 2020 to 2025.It shows that the industry is attractive for the existing companies as well as for the new entrants, for the next five years. (Preeti Wadhwani, Saloni Gankar).
Key challenges Netflix will face in the U.S.
Following are the key challenges that Netflix is expected to face in the U.S market:
- Competition is the biggest challenge in the U.S market.
- The high cost of contact will decrease its sales revenue.
- Losing market share to the competitors.
Most attractive opportunities.
- Can offer the low-cost services to customers in the U.S market by using contact efficiently, which will enable it to gain more market share.
- There are growth opportunities in other countries, such as:India.
- Can use diversification strategy like other competitors in the market, for example: Amazon.
Who, in your assessment, will win the “streaming wars”.
Netflix can win the streaming war, because as per our analysis; the renewal rate of Netflix’s services is good. The renewal rate is 93% as of 2019 after the launch of Disney+, which shows that it is losing market share to its competitors. But in the U.S, it might become difficult for Netflix tohave success or become a market leader by providing low-cost service, as Netflix has been facing negative cash flows since 2009.(See appendix: 1)
2000-2007, DVDs by mail era, 2008-2013, transition to the streaming era, and2013-present, entry into content production era.
Netflix is the market leader in subscription-based streaming content. The company has done an excellent job by developing that platform and it is way ahead of the competition.
Netflix is using platform strategy from era 2008 to 2013 and then from 2013 till date. Netflix is. Providing platform to the content creators, Netflix is now considering to provide platform to the Bollywood producers.
Netflix even has an idea of creating a second platform as a content provider, which has a strong association with the expansion of its streaming services’ subscriber base. Netflix also provides a robust platform for categorizing and recommending television shows and films……………………..
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