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Netflix: The Reasons Behind its Success

The story of Netflix begins between 1997 and 1998, when the American company became a serious competitor of Blockbuster by offering customers a subscription that included a flat rental fee and the delivery of movies and video games for just over $8, without any time limit for the return of the films. In 2008, Netflix debuted its own website and offered the same formula: a small monthly subscription to provide streaming and on-demand content.

Netflix’s Business Model

Why is Netflix defeating free online streaming (and the illegal one too)? Simply because it adopted the right business model. Subscribers can watch what they want, when they want and on as many devices: TV, computer, tablet, smartphone, game console. They can stop watching and resume when they have time. Based on what they watch, subscribers receive personalized recommendations: In addition, users can activate up to five different profiles depending on their tastes and needs (think of a family with children). Moreover, and this is no small asset, Netflix also produces TV series and exclusive blockbusters, such as House of Cards, Orange Is The New Black, Narcos, and Daredevil.

With this business model, Netflix has set itself up to compete not only with other on demand streaming services (in Italy,for example;Sky online), but with all manner of popular leisure activities: so TV, movies, video games, radio, social media, sport. Quite a challenge for the company, according to data provided by the Canadian Sandvine study company, in North America,nearly 40% of online traffic is related to content streamed from Netflix. Not bad!

Netflix in Italy: The Social Platform Launch Campaign

On its launch in Italy, Netflix started the #CiaoNetflix hashtag, which immediately started trending on Twitter. The online streaming brand also reached thousands of followers with a few posts on Instagram. Through word of mouth on social networks, Netflix came to the attention of national newspapers such as La Repubblica and La Stampa, getting quite a bit of publicity without investing in expensive campaigns. Netflix therefore planned an excellent launch campaign that yielded very interesting results.

Netflix numbers in Italy and in the world

Netflix boasts extraordinary numbers: it has about 75 million subscribers in 190 countries, with 125 million hours of television programmes and films watched every day.

The rich catalogue available, the ability to watch what you want when you want and produce excellent TV series has guaranteed Netflix the success that we have mentioned in this article. 2015 was a golden year for Netflix.

And what about Italy? At the end of the month of January, Netflix had gained approximately 280 thousand sign ups, although only 110 thousand actually subscribed after the first free month. These numbers are not huge, but they are destined to grow when, in addition to early adopters, the other TV series, film and documentary fans will become convinced of the validity of this business model.

Netflix has had the merit of beating up a lot of interest around online streaming; so much so that even the competition has had to adapt and improve its offer.

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