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Semelhante a Netflix in Brazil_Industry Analysis.pptx
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Netflix in Brazil_Industry Analysis.pptx
- 1. INDUSTRY ANALYSIS NETFLIX IN BRAZIL
- 2. INDUSTRY ANALYSIS An industry analysis is a critical business activity that company owners and management specialists carry out to assess the current business environment. This is regarded as an effective market evaluation technique meant to offer a corporation an understanding of the complexities of a particular sector. The industry analysis of Netflix in Brazil will use Porter’s five forces analysis. “Brazil is the third-largest marketplace for Netflix globally”. Outside of the United States, Brazil ranks for the second-largest number of users: 16,364 million in the first quarter of 2020, accounting for over half of all members in Latin America(LABS, 2020).
- 3. PORTERS FIVE FORCES Michael E Porter introduced Porter's Five Forces Model is essential for analyzing the competition in a particular industry for a corporation. It assists businesses in understanding their competitors' capabilities and the industry's competitive climate. With a rise in the wide range of video stream subscriptions, simply in Brazil, the number of subscribers is up from 15% in 2021, and the number of accessible services is growing(ANATEL, 2021). Why is Netflix's business in Brazil so successful? This post will utilize the “Porter Five Forces model” to examine the primary elements influencing Netflix’s market in Brazil.
- 4. • “Apple, Disney, HBO, and Britbox (BBC and ITV)” have all announced or are introducing new streaming services in Brazil. Because these competitors are so enormous, the initial expenses of technology and promotion will be low. • Despite several customers having many subscriptions, there is no doubt that having so many subscriptions will no longer be viable, and they may cancel their contract with a single service provider. Threats of New Entrants • Suppliers of Netflix could be thought to have substantial bargaining leverage. This significant pricing power is due to the limited number of businesses producing multimedia and entertainment content. • Netflix contains programming from numerous well-known networks, like “Disney, ABC, Dreamworks, and Showtime,” and would only consider a deal if it produced the required number of users. Power of suppliers
- 5. • The risk of purchasers abandoning Netflix is quite significant. Netflix does not charge yearly fees and instead charges a monthly membership cost of $9.99- $19.00 in Brazil, which is not a big commitment. Many clients may move to another streaming service with the exact pricing every month only to compare them. Power of buyers • There are several challenges to Netflix, particularly now that internet streaming has become the preferred television method in Brazil. Such include YouTube, Hulu, and others. However, since they cannot provide distinct goods and services to their audience, the danger of a replacement product is minimal for Netflix. Threat of substitutes • Netflix's rivals in the internet streaming market include “Hulu and Amazon. Amazon Prime” not only offers access to their streaming video service, but also many other features such as speedier shipping (1 day), music, and books in Brazil. Competitive rivalry
- 6. REFENCES
Notas do Editor
- This presentation will discuss the industry analysis of Netflix in Brazil.
- An industry analysis is a marketing process that provides statistics about the market potential of your business products and services. This section of your plan needs to have specific information about the current state of the industry, and its target markets. Netflix is a leading streaming video on demand (SVOD) company operating in 190 countries with 220 million subscribers . The product and revenue model in video streaming industry is very tangible and direct. Users watch TV shows, movies (on-demand) or any video content on variety of devices e.g. Tablets, Laptops, Smart phones. Netflix, being one of the early pioneers in this industry has a managed to make a firm user base and as well as a business model that generates a substantial revenue for the firm.
- Porter’s Five Forces Analysis of Netflix covers the company’s competitive landscape as well as the factors affecting its sector. The analysis focuses on measuring the company’s position based on forces like threat of new entrants, threat of substitutes, bargaining power of buyers, bargaining power of suppliers and competitive rivalry. Netflix Five Forces analysis helps to analyze its current position in the market based on multiple internal and external factors like competitors, customers, suppliers (vendors and partners), financial strength, future scope & alternate solutions. Let us start the Netflix Porter Five Forces Analysis:
- Threats of New Entrants Apple, Disney, HBO, and Britbox (BBC and ITV) are all launching or have just launched new streaming services. There are enormous hurdles to the entrance for new competitors who have not developed their video in the new media streaming services sector since both the generation of new material and the purchase of content from established players need very high expenditure. However, the entry barriers are pretty low for existing firms in the entertainment industry, such as Disney, since they will be able to satellite launches with their content and have a client base for their entire company or even some exceptional output of this company. The possibility of new entrants is a grave and severe worry for Netflix as more and more corporations opt to utilize their content to start comparable services. Because these rivals are so large, the early costs of technology and advertising will be minimal. Even though many consumers may have several subscriptions, there is little question that subscriptions to so many companies will no more be practical, and they may elect to delete their subscription with a specific service provider. To summarize, new entrants offer a significant danger to Netflix, and the company must take this issue seriously. Power of suppliers The suppliers of Netflix can be viewed as holding high bargaining power. This high degree of influence on pricing is due to the few numbers of entities producing media and entertainment-based content. Obtaining a contract and acquiring the license to distribute the content involves negotiating pricing, where the suppliers have an edge. Since Netflix is competing against traditional media distributors, it has to show greater flexibility in agreement than conventional businesses. Likewise, the suppliers have weaker bargaining power while dealing with traditional broadcasting businesses, but online distributors like Netflix face a higher degree of influence from the suppliers .Netflix had to lower its profits to maintain contact with the suppliers to establish a customer base, highlighting the high bargaining power of its suppliers.
- Power of buyers The media and entertainment industry dynamics allow the customers to have high bargaining power over the service providers. The sales and revenue generated by the company are dependent on the subscribers located in different regions across the globe. However, the low switching cost allows the customers to cancel their subscription with Netflix and seek other media providers increasing the business threat to the company. Due to this pressure, Netflix can't charge high prices to the customers and needs to keep the pricing strategy according to the customers’ demand, with minimal price increases. Moreover, high customer bargaining power ensures service quality per customers’ needs and preferences. Threat of substitutes Substitute products pose a moderate risk in the media and entertainment industry. Netflix faces a threat from substitute services offering similar products through rental DVDs and online streaming. In addition, the traditional media content providers constitute another example of substitute products. Customers can also engage in other sources of entertainment and leisure activities than online streaming and watching media content. To handle the high threat from these substitutes, Netflix has to update its content library by adding the TV shows, movies, etc., that are in demand by the customer base. The company must also engage in marketing to maintain profitability and expand its customer base. Competitive rivalry The media and entertainment industry has an intense competitive rivalry, pressuring companies to strive to retain customers through offering affordable prices. Netflix faces severe competition from traditional broadcasters, rival companies providing videos on demand, and retailers selling DVDs (Netflix, Inc., 2021). Amazon is the leading direct competitor of Netflix as both companies offer DVDs to rent, thus competing for a similar target market in this domain. Apart from Amazon, alternate online channels provide dynamic media content, such as Hulu, creating stiff competition for acquiring the right to display the content. More and more different streaming technologies are coming out, such as Roku, Google Chromecast, and Apple TV, which can be a malicious threat. But many of these streaming devices also have Netflix as an app which could sway the viewer to subscribe to Netflix whole experience.
- ANATEL (2021). OVERVIEW OF TELECOMMUNICATIONS IN BRAZIL 2021. [online] Anatel.gov.br. Available at: https://sei.anatel.gov.br/sei/modulos/pesquisa/md_pesq_documento_consulta_externa.php?eEP-wqk1skrd8hSlk5Z3rN4EVg9uLJqrLYJw_9INcO6-icfzL2WwKFOyBzfgSlrF4ZXbvpxrs6MbK__qyps42gWUg1A-HJP2O3T_SEU070OwacGeuaFsHQAGcNeR2FUG. Dias, M.D.O. and Duzert, Y. (2021). THE EVOLUTION OF NETFLIX IN BRAZIL: THE FIRST DECADE. [online] Available at: https://www.globalscientificjournal.com/researchpaper/THE_EVOLUTION_OF_NETFLIX_IN_BRAZIL_THE_FIRST_DECADE.pdf [Accessed 3 Oct. 2022]. Guadiana, G. (2020). A Netflix Experience: Reimagining the Direct-to-Consumer Platform. [online] Available at: https://dspace.mit.edu/bitstream/handle/1721.1/126900/1191623004-MIT.pdf?sequence=1&isAllowed=y. LABS (2020). Brazil is Netflix’s 3rd largest market and the 2nd in number of subscribers. [online] LABS English. Available at: https://labsnews.com/en/news/technology/brazil-is-netflixs-3rd-largest-market/. Netflix (2021). Netflix Annual report. [online] Available at: https://s22.q4cdn.com/959853165/files/doc_financials/2021/q4/da27d24b-9358-4b5c-a424-6da061d91836.pdf.