Streaming media service Netflix has set about overturning the traditional hierarchy in global media. Originally launched in 1997 as a mail order DVD rental company, it reinvented itself in the late 2000s as an internet broadcaster streaming on-demand movie and TV content to monthly subscribers. Its most significant breakthrough was the move into proprietary content, commissioning high-quality scripted drama and comedy - including the series House Of Cards and Orange Is The New Black - available exclusively to its own subscribers. As a result, it has begun to position itself as the main global rival to Time Warner-owned HBO. However its massive commissioning budget for new content - around $6bn in 2017 - puts it on a par with the biggest traditional Hollywood studios. At the same time Netflix has expanded its global footprint, initially in Latin America and more recently Europe and Asia, to cover 190 global markets. By mid-2017 it had 104m streaming members, more than half of them now outside the US. Revenues for 2016 were $8.8bn. Co-founder Reed Hastings remains CEO. According to company legend, he first decided to launch the company after he was fined $40 by original video rental giant Blockbuster for the late return of the movie Apollo 13. Ted Sarandos is chief content officer, responsible for commissioning new content. Adbrands does not currently profile this company but subscribers may access account assignments and contact information. The searchable account assignments database is available to full subscribers to Adbrands.net premium services; or see here for information on how to subscribe.
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Capsule checked 23rd January 2017
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Adbrands Weekly Update 20th Jul 2017: Netflix unveiled stellar results of its latest quarter, blasting through earlier estimates of subscriber growth and topping 100m worldwide customers for the first time. It had predicted 3.2m new users this quarter, while Wall Street had guessed at 3.5m. In fact, the final figure came in at 5.2m, taking the combined total to just under 104m, more than half of whom are now outside the US. Revenues jumped by almost a third to $2.8bn, while profits soared by 61% to $66m.
Adbrands Weekly Update 20th Apr 2017: With few new territories to conquer after last year's spectacular global expansion to around 190 countries, Netflix subscriber growth came in well below even its own expectations in 1Q. Total subscriber numbers reached 98.75m, slightly below target, though the company said it hopes to hit the magic 100m figure by the end of this week. "Every 10 million is a little harder than the last 10 million," said CEO Reed Hastings. However, he was quick to highlight the impressive impact on financial performance. Revenues jumped by 35% in the quarter to $2.6bn while profits rocketed sixfold to $178m. In welcome news for media outlets, especially online, Netflix said it aims to spend $1bn on marketing this year. "We are investing more in programmatic advertising with the aim of improving our ability to do individualized marketing at scale and to deliver the right ad to the right person at the right time," said Hastings.
Adbrands Weekly Update 2nd Mar 2017: It may have been Moonlight and La La Land's night (indie distributors A24 and Lionsgate respectively), but last Sunday's Oscars also represented a triumph for Amazon and Netflix. They won four Oscars between them, the first for any streaming service. Amazon did best with no less than three trophies. Manchester By The Sea collected the prize for Best Adapted Screenplay and Best Actor (for Casey Affleck), while Iranian drama The Salesman was Best Foreign Language Film. Netflix collected Best Documentary Short for The White Helmets. Amazon appears to play the Oscars game more successfully, backing traditional movies as well as the long-form TV series favoured by Netflix, and allowing their releases to enjoy a standard initial release in cinemas before being offered to streaming customers. As mainstream studios focus their attention increasingly on big budget spectaculars (that rarely win anything other than technical awards), the hold of Amazon and Netflix on the independent movie market is only likely to tighten.
Adbrands Weekly Update 2nd Feb 2017: President Trump's "travel ban" encouraged an unprecedented pushback from CEOs of major US corporations, reflecting the wider public disapproval of such a blinkered and ill-judged executive order. Perhaps the most high-profile protest came from Google co-founder Sergey Brin, who personally joined public protesters at San Francisco airport. However, other tech bosses including Apple's Tim Cook, Facebook's Mark Zuckerberg, Microsoft's Satya Nadella, Twitter's Jack Dorsey, Uber's Travis Kalanick and AirBnB's Mark Chesky, among others, also voiced their opposition to the ruling. Netflix CEO Reed Hastings said Trump's actions are "so are so un-American it pains us all. Worse, these actions will make America less safe (through hatred and loss of allies) rather than more safe." Starbucks' Howard Schultz wrote to all staff to voice his dismay over Trump's policies on Muslim refugees, Mexico, and the Affordable Care Act and vowed to hire 10,000 refugees over the next five years in the 75 countries where Starbucks has stores. In a joint letter to staff, Ford Motors executive chairman Bill Ford and CEO Mark Fields stated "We do not support this policy or any other that goes against our values as a company." Nike's Mark Parker also wrote to all staff to express the company's opposition to the travel ban. "Nike stands together against bigotry and any form of discrimination. We've learned that on the field of play, where fairness and mutual respect are the rule, not the exception." In the latest development, Amazon, Microsoft and Expedia, all headquartered in the state of Washington, are lending their support to a legal challenge to the travel ban mounted by the state's attorney general Bob Ferguson. However, brands opposing Trump can also expect repercussions from his supporters. Starbucks and Uber both suffered boycott calls on Twitter as a result of their stance, and similar anti-protest protests are inevitable.
Adbrands Weekly Update 26th Jan 2017: Netflix surpassed even its own expectations for growth in the final quarter of 2016, with subscriber numbers surging to 93.8m total viewers, including 49.4m in the US. Both figures were above analysts' expectations, and the company is forecasting in excess of another 5m subscribers for the current quarter. The 100m benchmark is a near-cert before the end of the year. For 4Q, revenues jumped 36% and net profits by 55%. For the year, revenues rose 30% to $8.83bn, while net income soared by 52% to $187m.
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