Netflix (US)

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 $8bn earmarked for 2018 - 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 the end of 1Q 2018 it had 125m streaming members, more than half of them now outside the US. Revenues for 2017 were $11.7bn. 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 premium services; or see here for information on how to subscribe.

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Who are the competitors of Netflix? see Media Sector

Capsule checked 23rd January 2017

Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 18th Apr 2018: Netflix reported another stellar quarter, shrugging off fears that growth might begin to stall on the back of fewer big content releases. The company had predicted an uplift of 6.35m new subscribers for 1Q; instead it topped 7.4m, a company record for the first quarter of the year, and its second best result ever, behind the final quarter of last year. Total subscribers hit 125m. Revenues were just ahead of expectations at $3.7bn. The company also unveiled a partnership with former arch-rival Comcast, designed to strengthen its US subscriber numbers for 2Q onwards. Starting this month, customers of America's biggest cable operator will be able to bundle Netflix as part of their regular package. It is the streaming giant's first integration with a US cable operator. It has a similar deal already with T-Mobile USA and has also agreed a bundling arrangement with Sky in Europe.

Adbrands Weekly Update 12th Apr 2018: New media giant Netflix is considering putting a toe into some very old media as well. It is among the top bidders for Regency Outdoor, a billboard operator best known for sites across Los Angeles, and especially in Hollywood where it reaches a key audience of entertainment industry leaders. Netflix has previously worked with Regency on campaigns to promote series including The Crown and Stranger Things. The price tag could go as high as $390m. "This is a smart move for Netflix because it is a very important viewing market," said Barry Lowenthal, president of MDC's The Media Kitchen. "Los Angeles matters to the people in the industry."

Adbrands Weekly Update 15th Feb 2018: Netflix poached another of the US broadcast industry's top producers. Ryan Murphy has delivered a string of hit dramas in recent years for Fox and its FX cable strand including Nip/Tuck, Glee, American Horror Story and The People vs OJ Simpson. He signed with Netflix this week with an exclusive five-year deal said to be worth as much as $300m. He will continue to oversee existing Fox projects for the duration of their runs, but all new material will be for Netflix. Murphy cited the impending acquisition of FX and other Fox assets by Disney as a prime cause for his defection. "The stuff I do is not Disney, and I'm concerned about that. Am I going to have to put Mickey Mouse in American Horror Story?" Last summer, Netflix lured away another star producer, Shonda Rhimes, from a 15-year partnership with ABC. The three remaining big name showrunners in network TV are CBS's sitcom king Chuck Lorre (Big Bang Theory, Young Sheldon), NBC's Dick Wolf (Law & Order etc), and Warner Studios' Greg Berlanti (The Flash, Blindspot etc). Several already have shows on Netflix. How long before one or all are snapped up to exclusive deals?

Adbrands Weekly Update 25th Jan 2018: There was no stopping Netflix in the final quarter of 2017. The streaming giant set a new quarterly record for subscribers, lifting its global streaming audience by 8.3m customers to 110.6m worldwide. Revenues for the year jumped by a third to $11.7bn, while net income virtually tripled to $559m. The company's share price has soared by 40% in just three weeks, pushing its market cap above $110bn for the first time. One notable cost item in 4Q was a $39m non-cash charge "related to the societal reset around sexual harassment". That presumably reflects exceptional costs and an impairment charge against House Of Cards in the wake of Kevin Spacey's dismissal. Separately, CEO Reed Hastings acknowledged the impending arrival of more high quality streaming rivals, not least Disney, but said he's relaxed about the challenge. "The market for entertainment time is vast and can support many successful services," he said. "Entertainment services are often complementary given their unique content offerings."

Adbrands Weekly Update 19th Oct 2017: Netflix yet again topped expectations for subscriber growth in 3Q, pushing its share price up to record highs of over $200 for the first time (though they have since slipped back below that level). The company added 5.3m streaming subscribers during the quarter (compared to the 4.4m predicted), taking total membership to 104m worldwide. That figure is expected to top 115m by the end of the year, despite a recently announced $1 per month increase in US subscriptions. Revenues surged 30% in the quarter to almost $3bn, while net income more than doubled to $130m, though earnings per share were slightly less than analysts had been expecting. Reacting to Disney's recent announcement that it would stop licensing some movie content to third party services in order to feed its own proprietary streaming service, Netflix noted in its letter to shareholders that "our future largely lies in exclusive original content". As a result, it raised its budget for content next year from the $7bn already stated to up to $8bn. Separately this week, Nielsen said it can now offer subscribers household viewing data and demographics for individual Netflix shows, excluding mobile platforms. That data is jealously protected by Netflix, and is not released to any outside parties including the network's own contributing producers. Netflix says the data is irrelevant since it does not sell advertising and it was quick to dismiss Nielsen's offering: "The data that Nielsen is reporting is not accurate, not even close, and does not reflect the viewing of these shows on Netflix."

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