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8/12/2019 Noflix Deliverable

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A NETFLIX DEPRIVATION STUDY


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NOFLIX

Jeremy HortonFocus Group ModeratorConsumer Insight Researcher

Temi Iyaomolere

Competition ResearcherPresentation Coordinator

Tim KostersService ResearcherFocus Group Moderator

Kayla LavenderBrand ResearcherPresentation Coordinator

Priscilla MonTarget Market ResearcherPresentation Coordinator


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TABLE OF CONTENTS

The Case

Overview of Online Streaming

History of Netix

Participants

Results

Creative Brief

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5

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THE CASE

REASONTeam Noix was initially going to

deprive participants of all paidonline video streaming, but afterdiscussing this service in class, wefelt that limiting our study to Netix

would create a stronger angleand provide more insight into thebrand.

We chose Netix because it is

a large reason people still turnon their televisions. Netix is

inexpensive and easy to use,which is the perfect platform forcollege students who have limitednances and strict schedules.

Cable TV is more expensive, and

TV programs only air at certain times.

This means consumers often haveto schedule their daily activitiesaround shows they want towatch. Netix allows viewers to

have the TV or movie experience

without subjecting them toadvertisements.

Because of the lack of ads onNetix, it would be interesting to

see how advertisers target Netix

consumers. It would also beinteresting to study consumersand exactly why they are brand

loyal to Netix.

RULESFor the deprivation study, werecruited 11 participants.

Only eight were left by the endof the study. Participants weredeprived of Netix for two weeks

and were allowed to use onlinestreaming alternatives, such asHulu, YouTube and Vudu. Theywere provided with daily logs torecord their thoughts, activitiesand other notes.

PARTICIPANTS

Participants were college-aged(18-26) and chosen using thesnowball method.

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SECONDARYRESEARCH

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ONLINE STREAMING

Streaming media is dened by

Webopedia as a technique fortransferring data so that it canbe processed as a steady andcontinuous stream. For streamingto work properly, the computerreceiving the data must be able tocollect and interpret that data tothe application that is playing themedia being streamed.

When the Internet saw increasednetwork bandwidth, increasedaccess to networks, morestandardized protocols and anincrease in the commercializationof the Internet in the early 2000s,streaming media became mucheasier and more popular.

A brief list of the highlights of thedevelopment of online streaming:

1992MBone developed

1994Rolling Stones Concert isstreamed using MBone

1998Apple announces QuickTime

1999Yahoo! buys

Broadcast.com for $5.7 billion

2005YouTube is created by formerPayPal employees

2007Netix introduces streaming

in addition to their DVD rentalservice

Fast forward to today and mediacan be streamed live and/or on demand. Media that islivestreamed is only available forviewing during the time of the liveevent, while on-demand mediais stored on a server and canbe viewed whenever the viewerdecides to watch it. Netix falls

under this category, as it store amultitude of movies and television

shows that can be watched at theusers whim.

COMPETITORSHulu

Amazon PrimeYouTubeVudu

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HISTORY OF NETFLIX

Marc Randolph and Reed Hastingsfounded NetFlix.com, Inc. in 1997.

The website launched on August29 of that year with 30 employees

and 925 works available online.

Initially Netix charged a rental

rate per work, but they switchedto a monthly subscription methodin 1999, which offered unlimited

rentals for a monthly price.

In 2000, Netix created

the personalized movierecommendation system thatrecommends movie choices tousers based on their ratings ofother works. The movie rentalcompanys user count passed onemillion in 2002, only ve years after

its launch. By 2005, Netix had

reached 4.2 million subscribers.

Netix only offered movie rentals

until 2007 when Netix introduced

online streaming. This allowedmembers to stream moviesand television shows on theircomputers.

The following year, Netix teamed

up with electronic companiesto allow Netix streaming on

the Xbox 360, Blu-ray players,

TV set-top boxes and Applecomputers. By 2010 the companyhad expanded its streaming

capabilities to the Apple iPad,iPhone and iTouch, the NintendoWii, the PS3 and other Internet

connected devices.

Up until 2010, Netix was only a

United States organization basedin California.

Netix launched internationally

in Canada, Latin America, theCaribbean, the United Kingdom,Ireland and the Nordics by 2012,the same year it passed 30 million

global members.

In March 2011, Netix announced

its intentions to acquire originalcontent for streaming. It beganwith House of Cards, which

debuted on Netix in early 2013.Original programming on Netix

now includes popular series suchasArrested Development andOrange Is The New Black.

As of 2013, more than 38 percent

of Americans use Netix. Netix

has more than 40 million streamingmembers worldwide and 900

employees at headquarters.

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PRIMARY

RESEARCH

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PARTICIPANTS

Nicole DarlingAge: 20Usage: 1 hour or less

per day

Roberto LugoAge: 21

Usage: 2-5 hours perday

Kyle MortonAge: 22

Usage: 1 hour or less

per day

Brittany GillenAge: 23

Usage: 2-5 hours per

day

Spencer WebbAge: 26Usage: 2-5 hours per

day

Justin GrecoAge: 26

Usage: 2-5 hours perday

John SakwaAge: 20

Usage: 1 hour or less

per day

Ola IyaomolereAge: 19

Usage: 2-5 hours per

day

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RESULTS

9

Participants

Lev

elofDifculty

Alternate Services Used


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RESULTS

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THEMESInvoluntary Participation

Some of our participants caved into watching Netix so they could

be included in the conversationand inside jokes while hanging outwith friends. Netix allowed our

participants to feel accepted.

I really wanted to watch Netix

because my friends were makingTV reference jokes I didnt knowwhat they were talking about.

Mindless Consumption

A lot of Netix users developed

a habitual behavior of cominghome and immediately turning onNetix without thinking about it.

This is becoming easier with the

introduction of smart TVs, some ofwhich have a Netix button on theremote.

Grabbing the remote and turningon Netix is usually one of the rst

things I do when I get home.

White Noise Wonderland

Our research showed Netix is

used as background noise when

doing things like reading, cookingand hanging out with friends.Silence drives people nuts.

Its too quiet when Im cookingand the DVDs are too much work.

CONSUMER INSIGHTSNetix > cable networks.

For example, AMC, the channel

that airs popular shows like TheWalking Deadand Breaking Bad,has credited Netix for playing

a big role in how popular thoseprograms have become. TheWalking Deads third season wasthe top-rated scripted program

during the last television season, arst for a cable channel.

Being able to binge watch priorseasons of shows on Netix allows

the consumers to obtain a deeperappreciation and love for theshow, inuencing them to want

to catch their favorite episodeslive on cable programming. Thisboosts ratings for cable channelsdue to large volume viewership.

Its almost safe to say thatcable programming and Netix

inadvertently work with oneanother, ultimately beneting both

services.

The cost of Netix compared to

cable programming is appealing

to consumers.

At a fraction of the cost per month,consumers have a wide variety ofprogramming to choose from.

From their favorite television seriesto their favorite movies past andpresent, they have a ton of optionsright at their ngertips.

Consumers feel like theyre gettingmore for less.

Netix always keeps the

consumer in mind with their

business model.

In the beginning Netix was going

to offer their customers a pay-as-you-go model for their servicesimilar to products such as theGoPhone.

This approach was becomingunpopular very quickly so Netix

ipped the script and offered

unlimited viewing for a low monthlyrate. This just goes to show thatNetix takes consumers voices

and demands into considerationwhen developing their brand andservice.

Everyone has the ability to watchwhat they want, when they want.Netix offers consumers an

individualized approach to viewingtelevision and movies by creatingcategories that are customized for

each user by using algorithms tounderstand what types of contentthey like to watch.


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WHY ARE WE ADVERTISING?To promote Netix as an irreplaceable alternative

to cable television.

WHO ARE WE TALKING TO?Students and young adults aged 18-34 who are

just getting on their feet nancially or are just

plain at broke but want to be entertained with

their favorite content.

WHAT DO THEY CURRENTLY

THINK?Ive heard of Netix and how affordable it is,

but Ive also heard that theyre slow in puttingup newer content. I want to watch exactly what

I want to watch when I want to watch it. I dontwait for anything.

WHAT WOULD WE LIKE THEM TO

THINK?Netix is my bestie. I dont know why I paid

all this money for cable television for all theseyears.

WHAT IS THE SIMPLE MOSTPERSUASIVE IDEA WE CANCONVEY?Netix is all the content you crave at a price you

can afford.

WHY SHOULD THEY BELIEVE IT?There are 75,000+ titles available to watchwhenever the heck you want to watch them. Andit only costs $8 a month. Thats like two lattes atStarbucks.

CREATIVE BRIEF

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