...Introduction Netflix is the world’s largest online television service provider, which controls the market globally generating over 50 million subscribers. The company has consolidated its position as an online television industry. It provides its users with a fast Internet delivery service of television shows and movies directly on computers, television, and mobile devices worldwide. The video streaming and broadband connection help users around the globe download and watch large video files from the comfort of their homes. With the advantage of this technology, Netflix has launched a video steaming website in 2009 where subscribers can watch the most recent television shows and movies. For today’s audience, it’s all about immediacy and mobility. The content of the users is looking for convenience, product selection, community of users, and customer services to fit their needs. Netflix, however, has given users the ability to watch a movie or an episode of their favorite TV show while traveling or being away remotely from the comfort of their homes. With the understanding of the impact of video streaming and the entertainment industry, there are many competitors that have similar avenues relating to Netflix. Company Overview Reed Hastings and Marc Randolph founded Netflix (NFLX) in 1997 in Scotts Valley, California. Netflix is a consumer technology company and industry leader for on-demand video streaming of copyrighted content on a monthly subscription. The monthly subscription...
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...Corporate Financial Analysis and Security Research of Netflix, Inc. [pic] . Finance 307, Professor Peter Lou GGU, Summer 2013 Table of Contents Business Description……………………………………………………………………….. 3 Industry Position and Business Model…………………………………………………… 4 Industry Analysis……………………………………………………………………………. 4 Historic Financial Analysis……………………………………………………………….. 5 Weighted Average Cost of Capital……………………………………………………….. 6 Financial Statement Analysis……………………………………………………………… 7 Bond Valuation I……………………………………………………………………………. 10 Bond Valuation II…………………………………………………………………………… 11 Stock Analysis……………………………………………………………………………….. 11 Off-balance Sheet Items……………………………………………………………………. 12 Revenue and Earnings Growth Analysis…………………………………………………. 12 Conclusion……………………………………………………………………………………. 13 Exhibit I……………………………………………………………………………………….. 14 References…………………………………………………………………………………….. 15 Business Description Below are some fast facts regarding Netflix and a quick history snapshot. |Fast Facts | |Founded |1997 | |Location |Los Gatos, CA | |Industry Sector |Internet Television...
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...Margin…………………………………………………………………………………………..2 Operating Margin……………………………………………………………………………………2 Income before Taxes……………………………………………………………………………….2 Net Income…………………………………………………………………………………………......3 Summary of Operations Data Assessment/Interpretation…………………………3 Financial Position………………………...……………………………………………………………………4 Working Capital………………………………………………………….………………………......4 Net Property, Plant & Equipment…………...……………………………………………......4 Total Assets…………………………………………………………………………………………….4 Long Term Assets……………………………………………………….………………………......5 Stockholders’ Equity……………………………………………………………………………….5 Financial Position Data Assessment/Interpretation Summary…………………..5 Financial Ratios…………………………………………………………………………………………………5 Liquidity…………………………………………………………………………………………………5 Leverage………………………………………………………………………………………………...5 Profitability…………………………………………………………………………………………….6 Efficiency………………………………………………………………………………………………..6 Financial Ratios Data Assessment/Interpretation Summary……………………..6 3-year Trend Analysis………………………………………………………………………………………..6 Comparison with at least 2 major competitors………………………………………6-7 Comparison with Industry Standards………………………………………………………7 Supplemental Data………………………………………………………………………………….8 Historical Financial Performance and 3-year Trend Analysis Data Assessment/Interpretation Summary……………………………………………………...8 References………………………………………………………………………………………………………...9 Appendix………………………………………………………………………………………………..10 - 16 I. Introduction ...
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...Final Exam – August 2013 Part 1 – Analysis of Netflix 1. and 2. Brief Overview of Netflix’s Business Model In order to better understand Netflix’s business model, there are 3 topics discussed at here: 1) the current business model analysis based on Alex Osterwalder’s methodology; 2) the history of Netflix’s business model which will give us more insights of what happened to Netflix in the past, and where it will go in the future; 3) the challenges and issues of current business model. Current business model The following is the current business model canvas of Netflix. As we can see above, Netflix’s revenue comes from subscription fee. The quality of video content is very important for success of Netflix’s business model. Netflix also extend the span of devices which support streaming. The growth of international subscription is one of the key success factors measured by wall-street. History of Netflix’s business model At the same time, to understand the history of Netflix’s business model is also very important. Figure 1Numbe of Subscription Figure 1Numbe of Subscription At the time of 1997 when Netflix was found, it offers online movie rentals. At 1999, Netflix launches the subscription service, offering unlimited rentals for one low monthly subscription. Before 2007, Netflix uses mail to delivery DVD to customers. At 2007, Netflix introduces streaming, which allows members to instantly watch television shows and movies on their personal computers....
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...Duane Lefevre Netflix Case Analysis Summary To “Netflix” is fast becoming a common word in today’s society. Everyone knows it, because it is very famous for its service of online movie. It has replaced the traditional DVD rental store and all the rental process can be done through internet with a higher image quality. Reed Hastings incorporated in 1997 and starting movie rental service in 1999. In 2012, there was already over 23 million subscribers and more then 120,000 titles available for online streaming, majorly competing with Hulu Plus and Amazon prime instant video. Analysis Porter five forces analysis The Porter’s five forces model is often used to analyze companies’ level of competition within an industry and business strategy. The rivalry among existing competitors is intense. There are a large number of firms in the movie rental industry and the competition is very high. Several methods for consumers to choose from in-store rental, online rental and mail delivery or video on demand and low level of product differentiation also increase rivalry. There are low switching cost which also lead to aggressive competition and comparable product can be found at many different places. In brief, Netflix major competitors have large levels of capital and also achieved economies of scale. The threat of new potential entrants of Netflix is soberly low...
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...Financial Statement Analysis Case Study Blockbuster versus Netflix By Deng Pan December 9, 2013 Financial Statement Analysis is one of the mainly used methods to evaluate a business. The Return of Equity (ROE) basically provides a big picture of how the business runs. This ratio can be decomposed to three parts: 1) Profit margin (Net income / Total revenue) 2) Asset turnover (Total revenue / Assets) 3) Leverage ratio (Assets / Equity) These ratios represent the profitability, activity, and solvency of the business respectively, which are the three main categories that analysts look at to approach the coverall value of the business. In this paper, I would follow this method, and give the vertical and horizontal analysis of Blockbuster Video’s and Netflix’s performance through 2001 to 2009. Blockbuster Video Business Introduction Blockbuster started their home movie and video game rental services business in 1985. They originally provided the rental service through owned franchised video rental shops, and later added DVD-by-mail, streaming, video on demand and cinema theater into the service category. The company generates the revenue from the movie and video rental fees. The main costs of the revenue are the store rental expense, and the inventory cost. After experiencing a fast growth in late 1980’s and 1990’s, the company peaked in 2004 with up to 60,000 employees and more than 9,000 stores. [1][2] However, if we look at their books from 2001 to 2009...
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...Netflix Case Analysis Key Strategic Issue This article is about the past business history and current business situation Netflix company is in. The case begins talking about how Netflix started with a bang making positive profits and revenues, but has recently hit some trouble due to strategic mishaps negatively affecting the company. The article then begins to describe the industry and various competition within it, and how they do business. There is some information on market trends in home viewing of movies, but most importantly the meat of the article discusses Netflix’s business model and strategy in detail. The one primary problem/key issue facing Netflix is how it will continue to remain the subscription-based leader in the instant movie streaming/DVD delivery industry. There are many rival competitors emerging offering a wide variety of services and options to consumers, and it is important Netflix modifies its business model/strategy and uses its brand recognition/positive traits efficiently. The best-case scenario is Netflix modifies its strategy to once again differentiate itself from competition. Also, it would be ideal that for the global markets targeted to generate massive revenue/profits. The likely scenario is that Netflix will steadily improve internationally, but retain a firm hold of those markets before anyone else has. Also, it is likely that Netflix will remain prominent but will be in tough competition with rivals such as Amazon Prime and Hulu...
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...Netflix Netflix was founded in 1997 in Scotts Valley, California, USA by two entrepreneurs named Reed Hastings and Marc Randolph. In its early days, Netflix offered unlimited movie rentals to its subscribers without due dates for a flat monthly fee with no per title rental, shipping or handling fees or late charge fees. In 2007, the company introduced new business model based on video on demand via the Internet, which was considered by some to be a departure from its original business model of movie rentals. With video streaming, online DVD and Blue-ray Disc rental tripod and with a global streaming subscribers of over 50 million, Netflix reported a revenue of US$4.37 billion US$112 million of which being net income and a total asset of US$5.4 billion in 2013. The company estimates its total equity to be US$1.33 billion and it has over 2000 full-time employees (www.netflix.com). Netflix’s vision as expressed by one the co-founder focuses on global distribution, licensing entertainment contents across the world, market accessibility for film makers, and finding global audience for content creators. (10K Item 1). It’s mission emphasizes growing global streaming subscription business, continuous customer experience improvement, enhancing user interface while at the same time remaining profitable. Mission. Netflix core values revolve around judgement, productivity, creativity, intelligence, honesty, communication, selflessness, reliability and passion. Tepper (2014)...
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...Summary Netflix is the world’s leading online streaming media company. By entering licensing agreements with major film studios, Netflix is able to distribute movies and TV shows online for a low monthly price. The 57 million streaming members in 50 countries can watch as much as they want from the content library, as long as they have an internet connected screen. Since 2007 they have pioneered delivery of TV shows and movies on a newly developed ecosystem that enables consumers to enjoy TV shows and movies directly on their TVs, computers and mobile devices. The company has three reportable segments: domestic streaming, international streaming and domestic DVD. The domestic and international streaming segments derive revenues from monthly membership fees for services consisting solely of streaming content. In the United States, members can receive DVDs delivered quickly to their homes, which is an additional 5.7 million users and 32% of net income even though it is on rapid decline. The domestic streaming content membership is 39 million members versus the international which is 18 million. In today’s market, there are several risk factors that Netflix faces and needs to handle to be competitive in the future. Some of these risks are the high licensing costs for the content they host, high reliability on other sources for streaming to customers devices and the need to constantly improve and innovate their corporate strategies (Netflix, 2013). Netflix expansion...
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...// TABLE OF CONTENTS BACKGROUND……………………………………………. 03 STRATEGY…………………………………………..…...... 05 FIVE FORCES…………………………………...…........... 08 DRIVING FORCES…………………………….…….......... 11 KEY SUCCESS FACTORS…………….……………....... 14 SWOT ANALYSIS……………………….……………....... 16 FINANCIAL PERFORMANCE………………………........ 22 KEY MANAGERIAL ISSUES…………..……………....... 24 RECOMEMENDATIONS……………….……………........ 26 APPENDIX……………………………….……………........ 28 BIBLIOGRAPHY………..……………….……………........ 35 // BACKGROUND The founder and CEO of Netflix, Inc. Reed Hastings, incorporated in 1997 and starting movie rental services in 1999. Netflix employed then and continues to employ a subscription-‐based business model. The company was originally only a DVD-‐by-‐mail service in which the customer paid for a certain level of membership that determined how many DVD’s could be rented at one time. DVD’s were mailed to the customer and then returned by the customer when they had completed viewing. After a couple years in business, the company began including ...
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...Netflix Netflix Inc. had its start in 1997 when it was incorporated by its current CEO and founder, Reed Hastings. It was not until 1999 that Netflix finally began to rent movies to its customers. At its origin, Netflix was a DVD rental service that only rented through the mail. With this type of service, customers would pay a membership fee that determines the number of DVD movies that they were allowed to rent at a given time. Once the customers would choose their desired movies, the DVD’s were mailed to them and then returned whenever the customer finished watching them. In 2007, Netflix introduced the concept of streaming on-line videos to its customers which allowed for instant access to their inventory that was formatted for such viewing. With the on-line streaming, they were still offering their original DVD service through the mail. Netflix introduced this new service in the attempt lower their overall costs that was brought on by paying for the shipping and handling of the mailed DVD’s. In 2010, Netflix introduced only their on-line streaming service internationally to over 43 countries. In 2011, it was announced that Netflix would stop the combined services of streaming and DVD rental and instead offer these services in separate subscriptions. Their customer base was displeased and the company’s stock prices had experienced a major drop in a short period of time. During the same year, Netflix sold a portion of their stocks to mutual finds causing their stock...
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...Google, the world's most powerful brand, endeavors to purchase Netflix, the largest U.S. based online movie rental service provider. This acquisition is consistent with the Google focus on improving how people connect with information. The acquisition will address a strategic opportunity to deliver more diverse online content to the world, where the graphical and video display-ad market is estimated to grow to $200 billion (Efrati, 2012). It will also further build on the expansive Google acquisition model strategy and use of capital (Rosoff, 2012). Google enjoys proven success and market dominance in online advertising. With its graphical and video advertising successes through its YouTube platform and thousands of other sites, the company has established a significant competitive advantage in the market of display-advertising. With Netflix, Google would leverage its ad expertise to pair advertisements with video search requests and video themes/genres. This acquisition will continue the Google growth model of winning loyalty across every facet of the internet experience which translates into "overall time spent on Google services,[...]more time (for consumers to be) exposed to ads, [and] increased brand loyalty (Young, 2011). The acquisition would provide a diversified monetization model of membership/fee based service which provides strong direct customer and revenue competition to Hulu (streaming video currently offered only to users in Japan and the USA and its overseas...
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....................................................................................... 5 Price ....................................................................................................................................................................... 5 Marketing Communications ................................................................................................................................... 6 Distribution Channels ............................................................................................................................................ 7 Marketing Analysis Conclusion ............................................................................................................................. 7 Financial Analysis...
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...Quarter:2010 NETFLIX: A COMPANY ANALYSIS Prepared By Group 5: Alex Krengel, Annie Dudek, Rick Momboisse, Trish Paik, & Tyler Martin  Table of Contents I. Wall Street Journal Article and Executive Summary ..4 I A. Wall Street Journal Article 4 I B. Executive Summary ..5 II. External Analysis ..7 II A. Industry Definition ..7 II B. Six Industry Force Analysis ..8 II C. Macro Environmental Forces Analysis, Economic Trends, and Ethical Concerns ..15 II D. Competitor Analysis ..17 II D. 1 Netflix’s Competitors ..17 II D. 2 Netflix’s Primary Competitors ..17 II D. 3 Primary Competitors’ Business Level and Corporate Level Strategy ..18 II D. 4 How Competitors Achieve Their Strategic Position ..18 II D. 5 Willingness to Pay ..21 II D. 6 Comparative Financial Analysis ..22 II D. 7 Implications of Competitor Analysis ..23 II E. Intra-Industry Analysis ..24 III. Internal Analysis ..24 III A. Business Definition/Mission ..24 III B. Management Style ..24 III C. Organizational Structure, Controls and Values ..25 III C. 1 Organizational Structure ..25 III C. 2 Organizational Controls ..25 III C. 3 Organizational Values ..25 III D. Strategic Position Definition ..26 III D. 1 Corporate Level ..26 III D. 2 Business Level ..27 III D. 3 Resource & Capability Level ..28 Value Minus Cost Profile ..28 Value Chain ..28 VRIO Analysis ..28 Consumer Retention Analysis ..29 4Ps Analysis ..29 Product Life Cycle ..30 III E. Financial Analysis ..31 III E. 1 Netflix Financial Performance...
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...Regal Entertainment Group FINANCIAL ANALYSIS Description of Business Regal Entertainment Group is a publicly traded corporation based in Knoxville, Tennessee and incorporated in Delaware. REG was founded in 1989 through the mergers of three larger movie chains Regal Cinemas, United Artists Theaters, and Edwards Theatres and has since acquired several smaller chains to boost market share. It has become the most geographically diverse theatre circuit in North America with 7,394 screens with 229 million attendees in fiscal year 2013 (Regal P.4). Regal’s fiscal year ends the first Thursday after December 25, and subsequently may have a 53-week fiscal year. In 2013 they reported total revenues of $3,038.1 million, income from operations of $339.8 million, net income attributable to controlling interest of $157.7 million, and cash flows from operating activities of $346.9 million (Regal p.4). Financial Statement Information While there are no extraordinary items or discontinued operations on their 2013 financial statements, Regal did report a $1.02 per share basic earnings for both Class A and Class B common stock for fiscal year ending 2013 (Regal p.113). Both Class A and Class B stock have a par value of $0.001 (Regal p.57). The Class A common stock has 500,000,000 shares authorized with 131,743,778 shares issued as of December 27, 2012 and the Class B common stock has 200,000,000 shares...
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