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 became the main global rival to Time Warner-owned HBO, far surpassing that mainly US-based service by 2015. Netflix's now-massive commissioning budget for new content - around $8bn in 2018 - puts it on a par with the biggest traditional Hollywood studios. At the same time the company has expanded its global footprint, initially in Latin America and then Europe and Asia, to cover 190 global markets. By the end of 2Q 2019 it had almost 152m streaming members worldwide, more than half of them now outside the US. The UK and Brazil were the company's biggest foreign markets by mid 2019. Revenues for 2018 were $15.8bn, with net income of $1.2bn. However, several challenges lie ahead, not least the global launch of Disney's own streaming service in 2019, that will deprive Netflix of some important content, including major Disney, Marvel and 20th Century Fox movies, as well as a similar service from Apple with proprietary content. 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.
Capsule checked 17th April 2019
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Adbrands Daily Update 19th Jul 2019: Netflix spooked investors with subscriber totals for 2Q that were far below its own earlier projections. More worryingly perhaps, US paid subscribers declined for the first time for almost a decade from 60.2m in 1Q to 60.1m. That was offset by positive - though weak - growth in international. The total figure came in at 151.6m subscribers worldwide. Revenues continued to grow, up more than $1bn year-on-year to $4.9bn, helped by subscription price increases. But net income fell sharply as a result of a steep tax charge
Adbrands Daily Update 10th Jul 2019: Netflix will lose its two most-watched shows next year as competition between streaming services heats up. According to Nielsen, 'The Office' and 'Friends' were the most popular series on the streaming giant during 2018, notching up airplay of 52bn minutes and 33bn minutes respectively. However, their makers NBC Universal and Warner Bros have chosen to call back rights ahead of the launch of their own rival streaming services in 2020. After that 'Friends' will air exclusively on WarnerMedia's HBO Max service, and 'The Office' on the as yet unnamed NBCU channel. (Netflix will retain rights to 'Friends' internationally, at least until it rolls out streaming services in other markets). Though Netflix spends billions of dollars on proprietary content like 'Stranger Things' and 'The Crown', more than 70% of viewing minutes - according to Nielsen - are spent on bought-in content. 'Grey's Anatomy', 'NCIS', 'Criminal Minds' and 'Parks & Recreation' were also among the top ten shows. Only two inhouse series - 'Orange is the New Black' and 'Ozark' - were among the ten most watched. Separately, Netflix named Jackie Lee-Joe as its new global CMO, taking over from Kelly Bennett. Lee-Joe was previously CMO of BBC Studios.
Adbrands Daily Update 7th Mar 2019: Kelly Bennett resigned as chief marketing officer of Netflix after seven years in that role, ever since it launched its streaming service. He plans to stay until his successor can be appointed.
Adbrands Daily Update 25th Feb 2019: Netflix failed to secure what would have been a historic Best Picture Oscar for 'Roma', but that film's three wins - Director, Cinematography and Foreign Laguage Picture - plus another Oscar for 'Period End of Sentence' in Documentary Short, represent a coming of age for the streaming industry. Those four awards put Netflix on level pegging with established giants Disney, Fox and Universal, who also each collected four Oscars. This was the first year that Netflix, Amazon and Hulu all had Oscar nominations, though Amazon and Hulu both went home empty-handed.
Adbrands Daily Update 18th Jan 2019: Netflix disappointed investors in the final quarter with lower than expected revenues and falling profits as a result of higher expenditure on content. The best growth came from international markets where paid members surged by 40% to almost 81m, compared to a lift of only 11% in the US to 58.5m. For the year, revenues were up 35% to $15.8bn while net income more than doubled to $1.2bn.
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