Netflix: rise, fall and recovery

Q2 Business, Management and Accounting

Journal of Business Strategy Pub Date : 2023-11-27 DOI:10.1108/jbs-08-2023-0177

Deanna de Zilwa

{"title":"Netflix: rise, fall and recovery","authors":"Deanna de Zilwa","doi":"10.1108/jbs-08-2023-0177","DOIUrl":null,"url":null,"abstract":"Purpose Netflix is the market leader in the streaming entertainment industry. In 2020 and 2021, Netflix’s subscriber numbers and revenue increased. During the first two quarters of 2022, Netflix lost millions of subscribers, revenue and profit declined and its share price and market capitalization deteriorated. The purpose of this study is to investigate how and why a company with such a strong track record as Netflix can experience this crisis and, most importantly, how it overcame the crisis and returned to growth. Design/methodology/approach This case study investigates Netflix’s rise, fall and recovery between 2020 and 2023 using qualitative research methods. It examines earnings calls, transcripts and letters to shareholders as well as the views of investment analysts, journalists and academics. Findings Netflix turned its fortunes around because its leaders faced the crisis head-on. They acknowledged that previous strategic decisions were no longer working, that no advertisements were on the platform and that there was no account sharing and they reversed these decisions. Netflix also realized that it needed to innovate, so it partnered with Microsoft to execute its go-to-market with advertising. It also launched games, made strategic acquisitions of gaming studios and developed its capabilities with new products. Originality/value This is a valuable case study. Investigating how a company as successful as Netflix can encounter a severe decline and how it changed its strategies and tactics to reverse the decline provides important lessons for other companies.","PeriodicalId":55881,"journal":{"name":"Journal of Business Strategy","volume":"6 1","pages":""},"PeriodicalIF":0.0000,"publicationDate":"2023-11-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Business Strategy","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1108/jbs-08-2023-0177","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"Business, Management and Accounting","Score":null,"Total":0}

引用次数: 0

Abstract

Purpose Netflix is the market leader in the streaming entertainment industry. In 2020 and 2021, Netflix’s subscriber numbers and revenue increased. During the first two quarters of 2022, Netflix lost millions of subscribers, revenue and profit declined and its share price and market capitalization deteriorated. The purpose of this study is to investigate how and why a company with such a strong track record as Netflix can experience this crisis and, most importantly, how it overcame the crisis and returned to growth. Design/methodology/approach This case study investigates Netflix’s rise, fall and recovery between 2020 and 2023 using qualitative research methods. It examines earnings calls, transcripts and letters to shareholders as well as the views of investment analysts, journalists and academics. Findings Netflix turned its fortunes around because its leaders faced the crisis head-on. They acknowledged that previous strategic decisions were no longer working, that no advertisements were on the platform and that there was no account sharing and they reversed these decisions. Netflix also realized that it needed to innovate, so it partnered with Microsoft to execute its go-to-market with advertising. It also launched games, made strategic acquisitions of gaming studios and developed its capabilities with new products. Originality/value This is a valuable case study. Investigating how a company as successful as Netflix can encounter a severe decline and how it changed its strategies and tactics to reverse the decline provides important lessons for other companies.

查看原文本刊更多论文

Netflix：崛起、衰落与复苏

目的 Netflix 是流媒体娱乐行业的市场领导者。2020 年和 2021 年，Netflix 的用户数量和收入均有所增长。在 2022 年的前两个季度，Netflix 失去了数百万用户，收入和利润下降，股价和市值恶化。本研究的目的是探讨 Netflix 这样一家业绩骄人的公司如何以及为何会遭遇这场危机，最重要的是，它是如何克服危机并恢复增长的。设计/方法/途径本案例研究采用定性研究方法，调查 Netflix 在 2020 年至 2023 年间的崛起、衰落和复苏过程。研究考察了财报电话、记录和致股东的信函，以及投资分析师、记者和学者的观点。研究结果 Netflix之所以能扭转颓势，是因为其领导者直面危机。他们承认之前的战略决策不再奏效，平台上没有广告，也没有账户共享，并推翻了这些决定。Netflix 也意识到自己需要创新，因此与微软合作，通过广告实施市场推广。它还推出了游戏，对游戏工作室进行了战略性收购，并开发了新产品。原创性/价值这是一个有价值的案例研究。调查像 Netflix 这样成功的公司是如何遭遇严重衰退的，以及它是如何改变战略战术扭转颓势的，这为其他公司提供了重要的借鉴。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

Journal of Business Strategy Business, Management and Accounting-Management Information Systems

CiteScore

4.50

自引率

0.00%

发文量

期刊介绍： The Journal of Business Strategy publishes articles with a practical focus designed to help readers develop successful business strategies. Articles should say something new or different and may propose a unique perspective. They should not offer prescriptions to CEOs on how to manage, but rather be directed toward middle and senior managers at companies of all sizes and types, as well as consultants and academics who want to think about their businesses in new ways. Coverage: As one of the few journals dedicated to business strategy, JBS defines strategy in the broadest sense and thus covers topics as diverse as marketing strategy, innovation, developments in the global economy, mergers & acquisition integration and human resources. We have a penchant for substantive, provocative and well-written articles. We also like to break the mould and include articles on topics readers are unlikely to find in other business publications.