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The Demographic Trends Affecting The Sale Of Netflix

The demographic trends affecting the sale of Netflix are phenomenal, as this discussion will tend to prove.

Netflix was founded in California, USA, as a small DVD mail service delivery specializing in the business of media streaming and offering videos on demand. As of the year 2013, Netflix made available approximately sixteen parts of the program arrested development, with about 10% of the subscribers watching the whole program(season) in just twenty-four hours. It’s been noted that quite a number of Netflix viewers between 18 and 34 years old watch Netflix episodes back to back. Netflix has provided an opportunity to binge view, unlike mainstream TV viewing, which programs episodes on a weekly or monthly basis. In 2013, Netflix ignored Gender, Age, and Geography and advertised episodes of Anarchy depending on the interest shown by the viewers (McNutt, 2013).

By June 2017, Netflix had more than 100 million viewers, and half of these viewers were in the US. At the same time, the rest are distributed worldwide. Among the company’s best markets are Brazil, Mexico, and Argentina.

The watchers are also provided a platform through social media to share reviews and experiences with others, increasing interest in using the service. According to research done by E-poll market research, it was found that in the US, Netflix was leading in streaming programming for all demographic groups, and Netflix proved to be more popular than its competitors by 200% (Parker,2016). This major trend has been attributed to the viewers responding to the survey as shown: Fifty-five percent said that viewer’s interest is catered for, while fifty-one percent liked binge-watching, and finally, sixty-nine percent said they wanted to avoid commercials (Parker, 2016). By the year 2016, Netflix had penetrated the market in 130 nations and used one predictive algorithm worldwide to sell its product. It did not use gender, geography, or demography, as VP of Product Todd Yellin claims. He insists that knowing about similar individuals of completely different genders, ages, or geographies helps them to sell more than traditional profiling methods (Morris, 2016). As of March 2018, Netflix had a total of 117 million subscribers worldwide and reached approximately 300 million people throughout the world (Smith 2018). It is estimated that 62.83 million viewers are international subscribers, and 53 million users are outside the US as of February 2018.

The current economic trends affecting Netflix’s sales are very encouraging for the company as it has grown tremendously, although its costs are too high. The cash costs of Netflix’s streaming programming reached 8.9 billion dollars in 2017, about two times more than what was spent two years earlier (Ovide, S (2018). Netflix also claimed its predicted cash flow was to increase by a margin of – 4 billion US dollars in 2018 as compared with – 2 billion US dollars in 2017. Netflix bonds due in 2026 have been trading slightly below 100 dollars, and they have been going up steadily. According to Williams, Netflix’s share rose by 13% in January 2018, which satisfied Wall Street and subscriber growth market share that allowed that to happen.

It is estimated that in 2017 the total revenue for Netflix was 11 billion US dollars and it is expected to increase to 15 billion US dollars by the end of 2018(Smith, 2018) Netflix company worth is estimated to be 130 billion dollars by February 2018. In 2017, the company planned to spend 6 billion US dollars on original content (Smith, 2018). It is, therefore, apparent that Netflix’s growth will continue steadily based on the Wall Street figures and the value of its shares. Cost management and financial borrowing are concerns, as expressed by financial critics.

References

Parker, R. (2016) E-poll market research Netflix is now preferred TV viewing for all demographic groups, PRNewswire, L.A. retrieved from, https://www.prnewswire.com/news-releases/netflix-is-now-preferred-tv-viewing-source-for-all-demographic-groups-300270704.html m:

Smith, G( 2018) DMR BUSINESS STATISTICS/FUN GADGETS,110 Amazing Netflix statistics and facts(March 2018)Retrieved from, https://expandedramblings.com/index.php/netflix_statistics-facts/

Morris, D, Z (2016) FORTUNE, Netflix says Geography, Age, and Gender are ‘garbage’ for predicting taste retrieved from, http://fortune.com/2016/03/27/netflix-predicts-taste/

McNutt, M (2013) Cultural learnings, Demographics of anarchy: Netflix, Afterword, and Gender retrieved from https://cultural-learnings.com/2013/09/11/demographics-of-anarchy-netflix-afterword-and-gender/

Ovide, S(2018) BLOOMBERG GADFLY Netflix’s Growth is in the Eye of the Beholder retrieved from, https://www.bloomberg.com/gadfly/articles/2018-01-22/netflix-earnings-growth-is-in-the-eye-of-the-beholder.

Williams, T (2018) Market watch, Netflix analysts continue to focus on growth, overlook cash flow.NY retrieved from, https://www.marketwatch.com/story/netflix-analysts-continue-to-focus-on-growth-overlook-cash-flow-2018-01-23

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