Introduction
It is well-known that Netflix, Inc. is a rather successful American subscription streaming service. Its present and future customers are ordinary people, mostly millennials, and its stakeholders are content creators, investors, subscribers, and competitors. Like every business company, Netflix is influenced by several environmental forces. One of them, the competitive force, is most likely to influence Netflix’s actions and future performance. According to researchers, the competitiveness of Netflix is decreasing because more and more clients prefer other streaming services, including Amazon Prime Video, AppleTV+, Disney+, Paramount+, and HBO Max (Lee, 2021). As noticed by Lee (2021), “Netflix’s share of total demand was slightly above 50 percent for the first three months of the year, compared with 54 percent a year ago and 65 percent in the first quarter of 2019” (para. 4). Therefore, it is possible to say that the following actions and strategies chosen by Netflix will be based on the competitive forces.
Analysis of the Competitive Environment
As mentioned above, competition increases and Netflix has to offer its current and potential subscribers more interesting and exclusive shows. However, the company itself does not consider its competitors a threat and mentions no significant change in the competitive environment (Lee, 2021). Nevertheless, people now have more choices between streaming services, and since there was an increase in Netflix’s prices, not everyone can afford to pay for the subscription and may want to choose cheaper options offered by competitors.
Factors of Change
Economic
To provide its customers with many original shows, Netflix spends a lot of money and has to increase subscription payments. At the same time, its revenue is not always high since many countries in which it operates are prone to exchange rate fluctuations, which directly affects Netflix’s profit. Finally, recent COVID-19 restrictions and effects have caused many people to lose their jobs or have their earnings decreased. Therefore, many people choose to watch movies and show on illegal but free media platforms.
Technological
Netflix is known for its high-quality video and content and the fact that its subscribers can watch shows and save their data while also having their content personalized. The unique system used by this media company to suppress video allows them to remain high-quality and much more attractive to people (Lee, 2021). Additionally, it is a great advantage that even the cheapest subscription option provides people with high-quality content.
Government
It is essential to notice that Netflix is not available worldwide as it is forbidden by the U.S. government for any American company to conduct business in some countries. Additionally, in several states, there are specific restrictions regarding media content, and many shows available on Netflix in the U.S. cannot be accessed in other countries. For example, in Turkey, there are higher rates of discrimination against the representatives of LGBT, and those shows that contain scenes related to this topic are banned there.
Political and Social Forces
Finally, Netflix is also influenced by political and social forces. As mentioned above, political disagreements between the U.S. and other countries prevent the media provider from operating there. As for society, it is possible to say that people love Netflix and still prefer it over other streaming services, especially in America. What is more, employees also enjoy working on Netflix as they are treated with respect and receive many benefits.
Conclusion
Nowadays, it is more comfortable for people all over the world to enjoy a new show at home instead of going to the cinema. This international trend allows streaming companies to gain an advantage and has more customers. At the same time, in the U.S., most of the population is now fully vaccinated and can enjoy life outside their homes, which affects the number of Netflix subscribers. Finally, intercultural differences either make Netflix produce diverse content aimed at various nations or prevent it from broadcasting in some countries due to their value systems.
Reference
Lee, E. (2021). Netflix’s dominance starts to slow as rivals gain. The New York Times. Web.