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Case Study

Netflix (C): The race to videostreaming (Cartoon case)

By Stefan Michel and Sarah Von Blumenthal

4 pages

March 2014

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Reference: IMD-3-2277

This case is part of a series on Netflix. Case (A) discusses the company’s growth until July 2011. Case (B) tells the story of Netflix’s sharp share price decline after it announced it was splitting the business in two and increasing prices. This (C) part covers the years 2012/13, when Netflix found its way back to success. Seeing that the industry bottleneck was shifting from the channel (who can reach the viewers?) to the content (who owns the movie rights?), Netflix started to produce its own TV shows (e.g. House of Cards, Hemlock Grove). All its shows were highly successful and even won prestigious Emmy Awards in 2013. Unlike cable networks, Netflix made whole seasons available at once, allowing customers to binge-watch all the episodes. In September 2013, two years after its meltdown, the Netflix share price hit an all-time high. Learning objectives: This case illustrates a complete strategic turnaround, as the name of the game changed in 2011. The story is a starting point for discussing the concept of value constellations, business ecosystems, Porter’s five forces and strategic moves. It can also be used to teach co-opetition, whereby Netflix and Amazon or Netflix and Apple are both competitors and partners at the same time.

Learning Objective

Learning objectives: This case illustrates a complete strategic turnaround, as the name of the game changed in 2011. The story is a starting point for discussing the concept of value constellations, business ecosystems, Porter’s five forces and strategic

Keywords

Strategy, Internet, Film Entertainment, Innovation, Competitive Strategy

Settings

Northern America, United States of America
Netflix, Travel and Leisure, Entertainment, Media
2012-2013

Type

Published Sources

Available Languages

English

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This case study is part of a series

Netflix (A): Business model innovation (Cartoon case)
Netflix (B): The 2011 fiasco (Cartoon case)
Netflix (C): The race to videostreaming (Cartoon case)
Netflix (D): Streaming wars (Cartoon case)
Netflix (E): Capture value (Cartoon case)

This case study is part of a series

Netflix (A): Business model innovation (Cartoon case)
Netflix (B): The 2011 fiasco (Cartoon case)
Netflix (C): The race to videostreaming (Cartoon case)
Netflix (D): Streaming wars (Cartoon case)
Netflix (E): Capture value (Cartoon case)

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