Two Decades and More: Evolution of Netflix’s Business Models and Outlook of Future

Abstract

This paper aims to study the growth of Netflix as one of the most successful multinational corporations in the entertainment industry. SWOT analysis is used as the theoretic frame to analyze the different combinations of strategies that Netflix has taken under various circumstances. Based on the focus shift, this paper divides Netflix’s history into three periods: freshly established as a movie rental business, domestic (United States) streaming services provider, and international streaming content creator and service provider. SWOT analysis is then used to examine the strength and weaknesses of Netflix and the opportunities and threats it faces in different periods, providing an overview of its circumstances. Comparing the different combinations of strategies that Netflix has taken at different growing stages, this paper has found out that Netflix has always emphasized its strength such that its strategies are mostly strength-radiated. Even though its strength is constantly changing from time to time due to the intense competition present in the markets, the strength-based approach has allowed it to explore opportunities or overcome threats. During the global expansion period, Netflix has also raised its attention on improving its weakness, potentially due to the stronger competitors in the international streaming market. Nowadays, Netflix has become the leading company in the global streaming industry, evident by its continuously greatest market share in recent years. However, as the whole ecosystem grows, Netflix must make sure it can grab the potential opportunities of faster broadband speed and upgraded accessories, especially in this era, where the boundary of different types of entertainment remains unclear, giving rise to even more powerful potential competitors, such as Tiktok, for people’s limited leisure time.