Tag Archives: environmental scan

by | Thursday, June 15, 2023 · 6:54 am

Netflix Ends DVD Service

It’s been a long time coming, but Netflix has announced that after 25 years and 5.2 billion discs, it is ending its DVD-by-mail business segment.

We can still remember how innovative Netflix was when it started its mail movie rental business using its trademarked red envelopes. Just select a movie and add it to your queue, get in the mail, and return it whenever you want. No late fees. No postage required. No driving to stores. Genius.

Netflix truly was a pioneer, first in mailing DVDs directly to homes, then in recognizing that viewers would move to Internet streaming services. At its peak in 2003, there were an estimated 20 million Netflix subscribers receiving movies in the mail.

Today, Netflix has 232.5 million subscribers around the world and is the market-leader in streaming entertainment. The company continues to evolve services, adding a tiered payment system that lowers the price for viewers willing to watch advertisements. It also plans to crackdown on password sharing starting the new tier in four markets – Canada, New Zealand, Portugal, and Spain. Netflix has stated that the revenue growth in Canada is faster than in the U.S.

Netflix also attributes its growth to new seasons of existing shows, plus original series such as “The Night Agent” along with original films  such as “Murder Mystery.”

How do you watch movies?

Group Activities and Discussion Questions:

  1. Review Netflix in class. https://about.netflix.com/en
  2. Poll students: What streaming services do they have?
  3. Pick the top services named by students. Divide students into teams and have each team research a service, including company history, revenue, types of services, prices, number of subscribers.
  4. NOTE: As an alternative, teams could prepare a SWOT analysis for each company.
  5. Next, discuss the components of a situation analysis: company, general industry, trends, key competitors, technology, legal, etc.
  6. Ask students what data they would want in order to make a marketing decision for Netflix services. What data was used to determine it was time to cancel mailing DVDs?
  7. Divide students into teams. Have each team use laptops to do general research to answer the questions above. (ex: overview of industry, size, growth, new technologies, environmental impact, etc.)
  8. Debrief the exercise. What will be the next chapter in the entertainment streaming industry.

Source:  Sperling, N. (18 April 2023). Netflix will end its DVD service, 5.2 billion discs later. New York Times.

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by | Tuesday, March 14, 2023 · 7:14 am

What’s Wrong with Fluffy? Do the Test at Home.

We all know that the pet industry is booming. There are more pets in homes than ever before!

And that means people need more pet products such as foods and toys. According to Morgan Stanley financial services company, the pet industry is expected to grow to an estimated $275 billion by 2030!

This growth also means that having more pets bring on more pet illnesses for owners to be concerned about. And visits to the veterinary clinic can be quite costly and time consuming. What if pet owners could get a diagnosis for their furry friends at home? It has the potential of diagnosing pet illnesses earlier, and at a lower cost.

That’s the premise behind a Minneapolis-based company named ‘My Simple Pet Lab’. The company makes in-home pet diagnostic tests for dogs and cats including stool tests, ear infection tests, and more. The tests were designed by veterinarians and can be used by either vets, groomers, or pet parents. Tests can be done at home, sent to the lab,  and results are emailed to you within days. It gives a test result easy to understand and share with your vet automatically online.

Distribution is a key goal for the company and tests are being added to Target stores in addition to Walmart and Amazon, plus through various vet clinics, boarders, and groomers.

A healthy pet means a happy home.

Group Activities and Discussion Questions:  

  1. Discuss how to build and use a SWOT analysis grid: strengths, weaknesses, opportunities, and threats (internal and external factors).
  2. For MySimplePet products, break students into teams and have each team build a SWOT analysis grid.
    1. Strengths: what is company good at?
    1. Weaknesses: what needs work?
    1. Opportunities: what is going on in marketplace?
    1. Threats: what should company be wary of?
  3. Based on the analysis, what are the issues and risks that might occur?
  4. Debrief by building SWOT analysis grid on the white board.

Source:  Williams, N. (15 December 2022). Make of in-home diagnostic tests for pets ready to grow. Minneapolis Star Tribune.

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by | Friday, November 18, 2022 · 8:20 am

Netflix Now Offers Ad-supported Subscriptions

It’s long been rumored that Netflix was considering adding advertising to its streaming service. That time is finally here.

Beginning in November in 12 countries (including the U.S., U.K., Australia, Brazil, Britain, Canada, Germany, and South Korea), Netflix will offer a $6.99 per month subscription option (Basic With Ads) that will show four to five minutes of advertising for each hour of content watched. The 15 to 30-second ads will show before and during TV shows and older movies; for new movies ads will only be shown before the movie begins.

Netflix’s subscriber base dropped significantly this year for the first time in a decade. Netflix is showing signs of maturing compared to other streaming services that are earlier in the cycle and must remain competitive. In 2021 ,it release 500 original programs (roughly $20 billion/year) but only a small percentage became hits.

Why the new pricing package? It’s one of Netflix’s key strategies to increase its subscriber base and improve average revenue per user. The company hopes that the new service option will encourage viewers who currently share passwords to get their own subscription, thereby increasing the customer and revenue base. (Netflix estimates that it has 100 million users who share passwords, making it a significant loss of potential revenue.)

For advertisers wanting to promote their brands, the new service is an opportunity to extend their reach to specific segments based on country and genres such as action, comedy, romance, and more.

Netflix isn’t alone in offering new subscription tiers. Disney+ will soon offer an advertising-based subscription in December at $7.99 per month. Hulu has long offered ad-supported subscriptions which accounts for more than half of its customers; HBO Max also offers ad-supported subscriptions.

Will you switch to the advertising version?

Group Activities and Discussion Questions:

  1. Poll students: What streaming services do they use? How much do they spend each  month? Is it worth it? Do they share passwords?
  2. Discuss the product life cycle. Where is Netflix in the PLC? What is the biggest challenge in that part of the PLC?
  3. Show a WSJ video that outlines Netflix’s strategy: https://www.wsj.com/video/series/news-explainers/netflix-hit-a-subscriber-peak-heres-how-it-plans-to-keep-growing/62158AB3-FBBB-4C38-8F72-30F8E27C9CD7
  4. Divide students into teams. Have each team build a price chart that includes the options from streaming services such as Disney, Prime, Paramount, Showtime, Hulu, etc.
  5. Discuss various pricing models. Which model is Netflix using?
  6. Have students develop pricing objectives for Netflix.

Sources:  Krouse, S. (13 October 2022). Netflix’s ad-supported plan will launch in November at $6.99 a month. Wall Street Journal; Sperling, N. (13 October 2022). Netflix to offer cheaper ad option beginning Nov. 3. New York Times; other news sources

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