Ashley+Pierno

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Strategy report
TO: Proximity Video Team FROM: Ashley Pierno DATE: October 1, 2009 SUBJECT: Netflix Strategy Analysis

Here is my Netflix strategy analysis. Netflix’s new expansion onto the Xbox game consul put it in a position to compete, and possibly take over the distribution of on-demand movies and television programs. This will appeal to Gen-Y as a fast and legal way of obtaining the movies they love. Netflix was founded in 1999 by Reed Hastings, who serves currently as the CEO. It is based in Los Gatos, CA. Netflix lets subscribers rent movies with no late fees and in the convenience of their own homes. Netflix’s revenues come from three sources: · //consumers// who subscribe to the Netflix service; · //Xbox// who now provides the capability of Netflix straight from the game consul to your television; · //advertisers// who use data by Netflix to place ads and measure their effectiveness. Netflix currently has 10 million subscribers and as of June 30, 2009, Netflix had a reported revenue of $1,605.214 million, already up from $1,364.7 million for 2008. The primary forces driving the competition in the DVD rental marketplace are new and improved ways of obtaining a movie without actually having to get in the car and drive to your local video rental store. What was once a competition of moving actual DVDs has now become a competition of who can get the information to the consumer more efficiently. Netflix making videos available on the computer and on your TV puts it a head of the game. Although Netflix, Inc. is the world's largest online movie rental service, with more than 10 million subscribers, they still have to watch out for their competitors to stay ahead of the pack. The merge with Xbox 360 gives Netflix an edge against their competitors by letting people download movies straight from their game counsel. Another cool feature that it will entail is “Party Watch” mode. This allows the user to invite other Xbox 360 users to watch movies with them, even if they are not in the same room, state or even country. The merge will also expand their company to Xbox 360 customers who are thousands of potential new subscribers. This also opens up a world of possibilities to gain more advertising and even expand onto other game consoles.
 * Profile **
 * Competitive landscape **
 * Netflix’s strategy **

Netflix is giving itself an edge that its competitors don’t have. With today's busy lifestyles and consumers demanding more value and control, it's no wonder that Netflix has become the preferred online provider of the home entertainment experience.

It is no secret that members of Gen-Y are constantly trying to find ways of getting movies at their easiest convenience, even if that means illegal downloading. Netflix is offering them a virus free and, most importantly, legal way of getting movies fast and easily. With the expansion of Netflix on Xbox Gen-Y gamers now have even more resources for seeing their favorite movies and sharing them with friends.
 * Gen-Y implications **

Resources

(2009, June 30) Netflix Download Library. Netflix.com. Retrieved on September 15, 2009, from [] About Netflix. Netflix.com. Retrieved on September 15, 2009, from []

(2009, July 14) Microsoft partners with Netflix on Xbox Live; Subscribers will have access to 10,000 movies and TV shows. MSNBC. Retrieved on September 15, 2009, from []

Movie night on Xbox LIVE. Xbox.com. Retrieved on September 17, 2009 from []

Blog proposal
TO: Proximity video team FROM: Ashley Pierno SUBJECT: Blog post proposal DATE: October 27, 2009

I propose we do our proximity blog post on the shift from delivering movies as digital files or stream rather than a physical DVD. This post can be useful to our clients who are thinking about advertising on DVDs and show them other ways to advertise through groups such as Netflix and be used by those who are thinking about opening video rental stores.

Due to Netflix’s recent partnership with Xbox, making movies available to rent straight from your Xbox360, subscribers have little reason to go in their car just to rent a physical DVD which they will later have to go return. Another appealing factor to consumers is that with streaming movies there are rarely any late fees so you never have to worry about returning it. Because this is such a current change it is a good thing to explore. The Video market is basically up for grabs and business people need to know the facts in order to determine a sure thing on what to put their money on.
 * Rationale **

Resources

(2009, June 30) Netflix Download Library. Netflix.com. Retrieved on September 15, 2009, from http://ir.netflix.com/downloads.cfm?CategoryID=282&Year About Netflix. Netflix.com. Retrieved on September 15, 2009, from http://www.netflix.com/MediaCenter?id=5379#facts

(2009, July 14) Microsoft partners with Netflix on Xbox Live; Subscribers will have access to 10,000 movies and TV shows. MSNBC. Retrieved on September 15, 2009, from http://www.msnbc.msn.com/id/25680004/

Movie night on Xbox LIVE. Xbox.com. Retrieved on September 17, 2009 from http://www.xbox.com/en-US/live/netflix/default.htm

Report proposal
TO: Proximity Video Team FROM: Ashley Pierno DATE: November 25, 2009 SUBJECT: Proposal for report on Netflix

The shift from physical DVDs to streaming video has left many video retailers desperate for clients. Netflix is leaving their competitors in the dust by not only hopping on the streaming video trend but by taking over the market. I propose to write a report on how Netflix is positioning itself to take over the streaming video market by appealing to Gen Y in numerous ways.  Netflix, like other video streaming services that require subscriptions, are starting to dominate the viral video landscape. There are even reports that Hulu will forced to offer subscription service in order to make money. There are several consequences to this trend that are vital for Proximity clients who wish to target Gen-Y to understand:
 * Need **

These three things combined means that regular advertising with premium video contenct is not longer going to work. These key players have the information you need in order to strategize your advertising plan. You will have to work with these companies and learn how to make ads that can be laced on media sites associated with the content.   The proposed report, “Netflix, The New Source for Your Movie Needs" will cover the following topics: · Video streaming and the decline of the DVD industry ·  Netflix: How it works ·  Netflix’s growing popularity with Gen Y ·  How you can use Netflix to advertise your business
 * 1) It is going to further take away from the audience of regular and premium cable broadcasting.
 * 2) It will mean that a few major players such as Netflix and Google / YouTube control access to most of the premium content.
 * 3) It will also mean that these same players will be able to collect vast amounts of information about viewing habits and preferences which can be used in designing marketing campaigns.
 * <span style="font-family: Calibri; mso-bidi-font-family: Arial; mso-fareast-font-family: AGaramondPro-Bold;">Topics **

The report will also include attachments that show Netflix’s growing number of sales compared to that of its competitors.

<span style="font-family: Calibri; mso-bidi-font-family: Arial; mso-fareast-font-family: AGaramondPro-Regular;"> The following items are key for the report.
 * <span style="font-family: Calibri; mso-bidi-font-family: Arial; mso-fareast-font-family: AGaramondPro-Regular;">Sources **

<span style="color: windowtext; font-family: Calibri; font-size: 12pt; font-weight: normal; mso-bidi-font-family: Arial;">Microsoft partners with Netflix on Xbox Live; Subscribers will have access to 10,000 movies and TV shows. (2009, July 14) //MSNBC.// Retrieved on September 15, 2009 <span style="color: windowtext; font-family: Calibri; font-size: 12pt; font-weight: normal; mso-bidi-font-family: Arial; msobidifontfamily: Arial;">, from [] This article discusses the software upgrade to Xbox 360 that will allow Gold members who are also subscribers of Netflix to access Netflix’s vast selection of movies straight from their Xbox device. It goes on to discuss how this business venture will benefit Netflix by giving it access to the 12 million Xbox Live members. Netflix Download Library. (2009, June 30) // Netflix.com.// Retrieved on September 15, 2009, from [] This gives the financial portfolio of Netflix showing that it has reported revenue of $1,605.214 million, already up from $1,364.7 million for 2008.

About Netflix. //Netflix.com.// Retrieved on September 15, 2009, from [|**http://www.netflix.com/MediaCenter?id=5379#facts**] This section of the NEtflix website talks about everything Netflix can do. Netflix members can watch unlimited movies and TV episodes from their TVs and computers and order DVDs to be delivered straight to their home. It also noted that “Netflix has been named the #1 retail Web site for customer satisfaction for more than eight consecutive surveys since 2005 by ForeSee Results” as well as stating that a pproximately 60% of Netflix members select their movies based on movie recommendations tailored to their individual tastes. This is important to note because Proximity users can tap into this information, using it to adapt their advertising techniques.

An interesting side note that I would like to tie in is that “If Netflix members drove to and from a rental store, they would consume 800,000 gallons of gasoline and release more than 2.2 million tons of carbon dioxide emissions annually.” This shows that Netflix is also environmentally friendly and will appeal to those supporters of the nationwide “Go Green” projects.

Online users are increasingly glued to the computer tube, comScore reports. (2009, September 1) //Internet Retailer.// Retrieved Sept. 7, 2009, from [] This article discusses the increasing amount of online videos watched in America. They said that “In July, 158 million U.S. Internet users viewed 21.4 billion videos online, up 10% from the month before and nearly double the 11.4 billion they viewed in July 2008, Internet audience measurement company comScore Inc. reports.”

Movie night on Xbox LIVE. //Xbox.com.// Retrieved on September 17, 2009 from [] On the website for Xbox 360 there is a section that discusses their partnership with NEtflix. Xbox 360 is the only game system that lets you instantly watch movies and TV episodes streamed from Netflix. “Since its release last November, the Netflix application has been downloaded by more than a million Xbox LIVE Gold members who have combined to watch billions of minutes worth of movies and TV episodes streamed instantly over Xbox LIVE.” This shows its growing popularity with Xbox users and how this partnership is only growing the Netflix franchise as a whole.

Team conference presentation proposal
//paste team conference presentation here//

Sales letter and report prospectus


December 3, 2009

Ms. Diane Forclose, Director of Marketing American Apparel Inc. 701 E. Joppa Road Towson, MD 21286

Dear Diane:

I enjoyed talking with you yesterday at Proximity’s Next Generation Media seminar regarding American Apparel’s need to promote its brand to Gen Y consumers. Enclosed you will find a prospectus for the report I mentioned describing Netflix and its dominance in the viral video world. As you noted yesterday, American Apparel feels that it must establish brand identity with Gen Y now in order to sell its products to those in which it was made for. With Netflix’s growing popularity it is making it even harder to reach Gen Y. I believe Proximity can work with you to devise a comprehensive campaign to combat this loss of advertising and formulate new ideas to achieve your advertising goal.

We can provide you with customized survey and focus group results to help shape American Apparel’s image as an up and coming fashion powerhouse. Our faculty consultants can advise your sales force on how to position new products, and our production teams can make multi-platform ads that appeal to Gen Y. In addition, we have trained student marketers who can promote American Apparel on social networks such as Facebook. Our research shows that using student representatives to friend social networkers is a far more effective strategy for reaching Gen Y than buying conventional banner ads.

I invite you and your staff to join us at Proximity’s Towson office for a special focus group session on American Apparel’s Gen Y brand image. After that session, you can meet with members of our group to discuss how Proximity can help you meet your marketing goals.

Sincerely, Ashley Pierno Associate Media Analyst

enclosure


 * About Proximity **

Proximity is a Gen Y on-demand media strategy group. Its analysts know how to connect with their generation using campaigns designed for the new media landscape. Because it is associated with Towson University, Proximity has immediate access to a large student population and the expertise of faculty who specialize in marketing and media research.

Proximity offers its clients a full range of services for developing and executing customized campaigns that can reach any segment of Gen Y. It regularly conducts on-line surveys and focus group sessions to keep marketers up to date on the social trends and emerging technologies that determine how this cohort communicates and what it purchases. Visit Proximity at www.proximity.edu to sample its research and see examples of successful campaigns.

Ashley Pierno // Viral Video with Targeted Commercials Opens the Door to New Advertising // ||
 * ** Netflix: Reinventing The Way You Watch Movies **

Gen Y is migrating away from traditional movie watching experiences and looking for new ways to get their fix. This newly empowered demographic will not passively watch generic commercials. They have too many other entertainment options tailored to their generation’s needs and desires. ||
 * **//__ The problem __//**

// Proximity // focus group results show that Gen Y viewers still value the social experience of watching movies with their friends. This report details how Netflix is growing in popularity with Gen Y and how this is making advertising on regular TV almost obsolete. Since there is no way of advertising via Netflix another strategy of reaching these Gen Y consumers must be met. Proximity can use its advance technology and insight to Gen Y to come up with these new advertising methods.
 * **//__ Proximity’s on-demand media solution __//**

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 * <span style="color: maroon; font-family: Arial; font-size: 12pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: SimSun; mso-fareast-language: ZH-CN;">Available now at www.proximity.edu **