Essay Sample on Netflix: World's Leading Provider of OTT Entertainment

Introduction

Netflix was founded in 1997 by Marc Randolph and Reed Hastings in California. Netflix grew to become the world's leading provider with its popularity spreading in over 190 countries with more than 83 million subscribers. The key Netflix's competitors include Amazon, Hulu, HBO Now, Cinemas among many others. While the prominent competitive advantage by Netflix includes attractive on-demand content together with the simplicity to use. Netflix services are based at offering Over-the-top (OTT) video service on movie streaming, on-demand videos as wells TV series which can be streamed through internet-connected dives that are compatible with the Netflix application (App). Despite the competition, Netflix's profit grew to US$15.794 billion (2018), ahead of its competitors Amazon $2.6 billion (2018), Hulu 1.4 billion (2018); and 3.2 billion (2018) (Dastin, 2019). The following study explains the distribution channels/strategies used by Netflix to distribute its products services.

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Netflix's distribution channel is through online streaming, the company aims at the clients whose main goal is a convenience, this is different from many of its competitors like Amazon which targets audience who desire a theatric experience. Netflix takes advantage of its online platform to distribute its films, making it vulnerable to be considered for an Academic Award since they do not consider the theatric experience of their films before its online release. It is required for the film to run for least seven days, 3 times a day and one of the screens should be showing between 6pm to 10pm. Due to this reason, Netflix had to consider the theatric release of the movie Mudbound, which made the company be recognized in the Academy Awards. Netflix is known for purchasing the distribution rights to films which are eagerly waited, something that angered many of the people. Example God Particle, whose distribution right was purchased and titled The Cloverfield Paradox and then distributed online (Vibrant Web Creations, 2019). Though, that strategy is meant to entice more of the customers to prefer their platforms and watch films in their continence. The distribution strategy adopted makes it easier for many f the subscribers to access the services without having the special set box which might be costly and unavailable in some of the local markets.

Netflix distribution strategy is supported by its pricing policy. Netflix pricing compared to its competitors is affordable to its customers. Through its spokesman, Netflix increased its price process its package plan by 13 to 18 percent. It will mean that basic plan increased from $7.99 to $8.99 per month; Standard plan (HD) which is the most popular raised to $12.99 from $10.99; and the premium plan increased from $13.99 to $15.99 (Leonhardt, 2019). The plan to increase is meant to increase the profit margin especially when the company's products have gained a position in the global market. Furthermore, Netflix has a feature that accommodates multiple devices, up to 4 screens at a time, under the same subscription account (Kotler & Keller, 2016).

Conclusion

To sum up, Netflix distribution channel is through the online streaming, which allows the users to subscribe for the services under different plan. The company took advantage of globalization through the internet to distribute its services around the world. Even though the competitors are using either equal or different distribution channel, Netflix employs competitive pricing to ensure that the customers get value of their services.

References

Dastin, A. (2019). Amazon's push for one-day delivery dents profits, costs up 21 percent | IOL Business Report. Retrieved 30 July 2019, from https://www.iol.co.za/business-report/international/amazons-push-for-one-day-delivery-dents-profits-costs-up-21-percent-29888123

Kotler, P., & Keller, K. L. (2016). Marketing management (15th ed.). Boston, MA: Pearson Education, Inc.

Leonhardt, M. (2019). Netflix is raising prices-here's how it now compares to other streaming services. Retrieved 30 July 2019, from https://www.cnbc.com/2019/01/15/how-netflix-compares-to-other-streaming-services-after-raising-prices.html

Vibrant Web Creations. (2019). The Differing Distribution Strategies of Amazon and Netflix Original Films - Vibrant Web Creations. Retrieved 30 July 2019, from https://vibrantwebcreations.com/differing-distribution-strategies-amazon-netflix-original-films/