Essay: The Rise of Netflix: A Look at Its Mission, Competitors, and Impact on Entertainment Industry

Netflix Inc. is a multinational entertainment company founded on August 29, 1997, by Reed Hastings and Marc Randolph. It was started and is currently headquartered in California. Netflix specializes in movie and television show streaming on demand through apps, gaming consoles, phones, etc. Netflix also has an option to receive DVDs by mail that has been forgotten for the most part and the company mostly focuses on streaming. Netflix doesn’t have an ordinary mission statement, “A vision, a promise, and nine values” these together make up an idea that provides insight about Netflix’s mission. Becoming the best global entertainment distribution service, licensing entertainment content around the world, creating markets that are accessible to filmmakers, and helping content creators around the world to find a global audience are all part of Netflix’s “quest” which is basically the same thing as their mission statement.
Netflix only has two product lines, mailing DVDs and streaming. Netflix has movies and television shows but they have many different genres of each. They have comedies like The Office, Kevin Hart shows, and Friends or more serious and suspenseful shows like Blue Bloods or Prison Break. The movies cover the whole spectrum as well, from old classics like Top Gun or Ferris Bueller’s Day Off to London Has Fallen and Kung Fu Panda 3. The product development is just getting rid of old movies and TV shows and replacing them with new popular ones. Netflix is a worldwide incorporation that is used in 40 different countries.
Netflix would have two different types of competitors since they have two different methods of getting media entertainment to the customer. On the mailing DVD side of the company, the competitors would be Blockbuster and Red-Box. Seeing as Blockbuster is out of the picture the two main are Red-Box and Netflix now but for the most part Netflix is all streaming now. For Netflix, streaming is a very competitive market but they have managed to be one of the best-known streaming companies for media entertainment. Their competitors are places like Hulu Plus, Amazon Prime, X-Finity, and even iTunes. Somehow Netflix has been able to have a lasting presence in the streaming world with their competitive advantages of a cheap monthly cost and the wide variety of movies and TV shows.
The Netflix stock was just a pretty unknown company in 2005 and finally started to gradually pick up in 2009 and 2010. It got pretty popular in 2011 but then just dropped in stocks and stayed down until about December 2012 or January 2013 it shot up. In 2014 it got real high but took a couple dips in April and September. Midway through 2015 it reached it’s highest but just recently in the past couple months that was topped and the stock was worth over $120 per share.
Netflix has made a big impact on entertainment and all other companies in the industry. Netflix changed the way the entertainment industry went about getting their media to the customer and it has seriously affected cable companies. Netflix has caused Comcast to become virtually irrelevant and has people “cutting the cord” with Time Warner Cable left and right. The increase in people with Netflix and other streaming accounts like Hulu, Amazon Prime, etc. have been leaving their cable companies because of the amount of entertainment with these companies. From the years 2010 to 2013, 5% more “cord-cutters” had Hulu or Netflix and noted that it was the cause for ending their cable contracts or subscriptions. All of the companies in this industry all have some sort of streaming whether it is through an app or a website. Netflix is different though because it has the mailing and the streaming. That is what truly set Netflix apart and kind of gave them the head start in this industry because they were able to appeal to a larger market.
Netflix and Apple had talked about a merger in the past but the most recent merger with Netflix was with Disney. The partnership was finalized in 2012 but the deal starts with 2016 movies. Now, new released Disney movies, which include: Marvel, Pixar, and Lucasfilm, will be exclusive to Netflix and won’t be shown on regular cable television. Investors have recently started to get concerned with the lack of subscribers to the company’s DVD mailing service which, at the peak of the business in 2011, was its cash cow. Given that most of the people unsubscribing are just going to the streaming side of the company makes it a little bit more acceptable. Netflix finished the first quarter of 2016 with 81.5 million subscribers. Whether those are streaming, which is becoming the more popular way to go, or mailing DVD that is still a lot of income especially since the price is being raised to $10 a month instead of $8.
In the next twelve months Netflix Inc. has a projected stock value of 130.00. Although the high is 165.00 and the low is 60.00. It has a lot of room for mistakes and successes. Netflix has been estimated to have a 17.26% growth from their 2016 third quarter earnings to the end of 2017 first quarter. Annual earnings from 2017 are projected to be as high as 123% growth which would put the stock at about 1.39 per share but the consensus of 40 analysts is that it will come out to be around 0.95 per share.
In conclusion, personally I feel that this would be a good company to invest in. Netflix Inc. has been so successful since 2010 and is only projected to be more successful. It reached its highest share cost ever just this year and there are no real signs of it slowing down. It is one of, if not the top, competitor in it’s industry and has been for some time now. The company is developing and other companies in different and similar industries want to be a part of the success. Apple, Disney and many more have all tried to merge with Netflix and before we know it, Netflix could end up with a monopoly in the media entertainment industry.
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Puneet Sikka  | Oct 20, 2014 1:49 Pm EST. “Analyzing the Must-know Business Trends Affecting Netflix.” Analyzing the Must-know Business TrendsAffecting Netflix – Market Realist. N.p., n.d. Web. 02 Dec. 2016. <http://marketrealist.com/2014/10/must-know-analyzing-key-business-trends-impacting- netflix/>.
What’s Driving Netflix’s Rebound? Merger Rumors, and Mickey Mouse. “Netflix Rebounds on Merger Rumors and Disney Deal.” CNNMoney. Cable News Network, n.d. Web. 02 Dec. 2016. <http://money.cnn.com/2016/05/31/investing/netflix-stock-rebound-takeover- rumors-apple-disney/>
Https://www.facebook.com/USRetailIndustry. “Mission Statements of Technology Companies.” The Balance. N.p., n.d. Web. 02 Dec. 2016. <https://www.thebalance.com/tech- companies-mission-statements-4068549