Analyze Netflix internationalization – include relevant concepts. (75%)
Discuss whether Netflix makes use of a standardized marketing strategy internationally. (25%)
The export preparedness of Netflix - Looking at the export preparedness of Netflix, it’s possible to analyze how well the company can manage export barriers. Export preparedness is assessed by looking at different factors: product, production, people, and money.
Product: For Netflix to keep its product suited for export markets, the company secures content deals region by region, and sometimes country by country.
International subscribers to Netflix, who are not too good at English, prefer having local-language movies and shows, an example: In South America, the people are offered content in English, Spanish, and Portuguese on the Netflix platform.
Some people don’t have a good enough internet speed to stream Netflix’s content, and some also believe the monthly subscription is too expensive, but overall the company’s product is suited for export markets.
Netflix provides a wide variety of movies, TV shows, and documentaries, which attracts on an international level. In January 2016, Netflix services operated in more than 190 countries, and close to 73 million of its some 130 subscribers are outside the U.S.
Production: Regarding handling a great difference in demand, Netflix has had some challenges during the Covid-19 pandemic.
Even though Netflix has experienced an enormous rapid increase in demand for their streaming service, it had to decrease the quality of its content due to the extremely larger number of watchers.
Netflix used to have datacenters where it would store its physical movies and shows, but in 2015, the company closed its last datacenter and has ever since had all its data cloud-based. Fortunately, Netflix can store all its data on their servers, and it’s through the servers Netflix stream movies to the customers.
People: As of 2019, Netflix employed approximately 8,600 full-time workers. The employees the company has- and has had ever since the beginning, have contributed to Netflix growing both in size and scope to become the major player in the entertainment industry that it is today.
Money: Netflix is growing in worldwide subscribers, but Netflix’s revenues are not growing fast enough to cover its rising expenses.
According to an article published in Forbes, in 2018 the company spent $539 on international marketing and additions to streaming content for each new subscriber.
For a user paying the average price of $13/month, it takes almost 4 years to pay back that acquisition cost.