Explore the leading online streaming platform's strengths, weaknesses, opportunities, and threats in this Netflix SWOT Analysis.
You probably have a Netflix account. Almost everyone does. Seriously. Their consumer base is over 100 million people all over the world. And that’s not surprising when you consider the power of their brand recognition plus the content they offer.
They’ve paved the way for subscription-streamed content. Now, similar companies with matching buying power are creating their own apps and monthly subscriptions for exclusive content. They’re Netflix’s competition and ready to battle them in the ring.
In this Netflix SWOT Analysis, I’ll be addressing what they do so well that customers break their F5 button to see what’s been recently added. But I’ll also dive into what makes those same consumers cringe away from the screen. I discuss the competition and how Netflix is expanding into new areas for their content.
Keep reading to learn more.
Netflix Strengths
Leading Online Streaming Platform
Netflix is the leading online streaming site. Although others have risen up, Netflix is well known throughout the world for its selection and relatively cheap monthly price.
Massive Consumer Base
Because of the popularity, the consumer base is massive — over 100 million users massive and viewable in over 180 countries.
Content Bargaining Power
With such high numbers, Netflix has an easy time bargaining for content from many countries. The massive exposure is promising for companies. Netflix often picks up television series that have been canceled and left to rot. They create “sequels” or new seasons years after the original show ended. Like with Gilmore Girls, which had a Netflix special spinoff.
Original Content Success
Netflix originally streamed older shows like Friends, but within the last few years, has started creating their own original content. Many of which have become rousing successes including Orange Is The New Black and Stranger Things. Not only were these shows developed with interesting premises, but you’re also able to binge-watch the series, rather than forced to wait each week for a new episode like with traditional television shows.
Diverse International Content
They’re also branching out more into foreign shows. Netflix created a second season for a Japanese reality show called Terrace House that’s been a hit with international viewers. They’ve gone on to renew the series several times, allowing people who may never travel to these countries to catch a glimpse. And surprisingly, people are loving it.
Plus, no commercials!
Ad-Free Viewing Experience
The biggest complaint among users who watch (or used to watch) television is far too many commercials. Many felt they were paying to watch commercials with television shows mixed in. Customers jumped on Netflix for their ad-free content and although Netflix has discussed putting ads in, the viewers have unanimously voiced their complaint against it.
Netflix Weaknesses
High Content Creation Costs
Even though they’re branching into more original content, the cost of these shows and movies is incredibly high. In 2017, Netflix invested $2.5 billion just to sure the rights for these original shows. They’ve also decided on some... interesting movies that users weren’t thrilled with. This included the 3 movie deal with Adam Sandler — great for Sandler, but it left a terrible impression on users. The rating page the movies on Netflix are skewered by dozens of 1 star (bad) reviews on the site.
Unreliable Recommendation System
And speaking of reviews, users have also complained about that system because of how new shows are recommended. Initially, you could offer a star rating to shows. But now all you can do is give it a thumbs up or a thumbs down. Often, the site uses a “match” system to select your next show, but it’s not accurate. A show you despise can still manage to be a “92% match.” How? People don’t really know, and no one really cares to find out. They just want it gone.
Content Licensing Issues
Also, shows disappear. Netflix doesn’t own the rights to their shows. When the rights expire, the shows disappear. They can eventually re-appear, but who knows when? What we do know is that it’s not uncommon for seasons to just disappear without notice.
Lack of Environmental Initiatives
On a side note, Netflix has gotten flack for their lack of environmental initiative. Competition, like Amazon, have openly discussed their plans to be environmentally-friendly. They’re using renewable energy for their services, but Netflix hasn’t matched the initiative.
Rising Subscription Prices
Netflix is also inching their prices up. Initially, a monthly subscription cost less than $10 a month. But they've risen the prices twice within a couple of years Although the hike has been a dollar or so each, much of the consumer base loved Netflix for their affordability. Seeing the prices rise makes them wonder if this is just the beginning.
Netflix Opportunities
Expansion into China
Even though Netflix is available in many locations, China isn’t one of them. Netflix has been having difficulties with licensing. Now they’re trying a different method of joint-venture to use Chinese media to stream content.
Global Partnerships
Netflix is also partnering with other companies around the world, like Europe. They’re working with the BBC to not only comply with European laws but to also gain knowledge about this customer base. It’s a double win for the company.
Leveraging Technology
As technology advances, Netflix can take advantage. We’re watching shows in higher quality in different formats like smartphones and tablets. Netflix is viewable on these devices and can offer shows in the quality people desire.
Netflix Threats
Intense Competition
The competition is fierce.
Facebook, the social media ogre, has started to create their own original content. But there's also Amazon, Hulu, HBO, and YouTube to worry about. These platforms offer their own unique program for a price. Although the offerings aren’t as expansive as Netflix, the brands have the power to grow. And what they have, Netflix never will. Like Game of Thrones owned by HBO. Or the exclusive shows by YouTube creatives on YouTube Red.
Loss of Content Partnerships
Netflix also did a deal with Disney to show their animated films. But that has essentially fallen through as it seems Disney is considering their own streaming services instead. Monthly subscriptions appear to be the future for television and content creation, and everyone wants a piece of the sweet pie Netflix is trying to hoard.
This concludes the Netflix SWOT Analysis.
