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 $7bn 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 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 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 21st Sep 2017: As the New York Times pointed out, "It was inevitable that a streaming service would win an Emmy for best drama at some point. But no one expected Hulu to get there first." Despite a huge marketing campaign, Netflix was pipped to the post in almost all of the major categories in the US Emmy Awards. The most prestigious drama awards were mostly scooped by Hulu's The Handmaid's Tale, while NBC's Saturday Night Live cleaned up in comedy, winning the prize for best variety sketch series for the first time in two decades. As usual, though, HBO took home the most awards overall, its 16th such sweep. Including creative arts categories not covered in the telecast, HBO took home 29 trophies, including for Veep, Big Little Lies and The Night Of. Netflix was by no means empty-handed at 20, including important nods for Black Mirror and The Crown. The big losers were once again the broadcast networks. Only NBC collected awards in the main awards show; there were none for telecast host CBS, ABC or Fox. That gradual shift of the Emmys (like the Oscars before them) away from mass-market entertainment towards niche or "arthouse" content has also prompted a significant decline in viewers of the awards show. This year's telecast attracted a record low of 3.22m adults in the 18-49 demo, down 10% on last year.

Adbrands Weekly Update 17th Aug 2017: Disney took steps to reduce the future threat from Netflix and other streaming video rivals, by announcing plans for its own equivalent service in 2019. As a result, Disney and Pixar movie releases will no longer be available on Netflix (and presumably other such platforms) after 2018, although the two sides are still in negotiations over the future of movies from the group's Marvel and Lucasfilm units. Disney will also create other proprietary content for the new streaming platform. The group also plans to launch a separate streaming service for ESPN in 2018, offering MLB and NHL games as well as other content. It will complement the existing ESPN cable service not replace it. Both streaming services will be build on the platform operated by BAMTech, in which Disney already has a 33% shareholding. It will increase that holding to 75% for an additional payment of $1.6bn.

Adbrands Weekly Update 17th Aug 2017: In a separate development that demonstrates the growing attractions of the unfettered creativity (and cash) offered by Netflix, superstar producer Shonda Rimes (Grey's Anatomy, Scandal, How To Get Away With Murder etc etc) is to end her partnership with Disney's ABC network to sign a multi-year deal with the streaming giant. She will continue to oversee existing shows on ABC, but any new series will be developed exclusively for Netflix. Rimes said "I'm thrilled by the idea of a world where I'm not caught in the necessary grind of network television," as well as the restrictions on language, nudity and violence. Also in the past couple of weeks, Netflix signed up the Coen brothers to make a Western series, coaxed David Letterman out of retirement to make six hour-long specials, and acquired British comic book publisher Millarworld, which owns rights to a collection of offbeat superhero brands including Kick-Ass and Kingsman.

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.

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