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Netflix: Expanding in Asia

Group 5

Chiao-Hsin, Joe, Lu, Rainie

Instructor: Alison Munsch

Fall 2020 Statistical Measurement, Analysis & Research

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AGENDA 〉

  1. Background / Marketing Opportunity
  2. Marketing Problem & Research Problem
  3. Methodology
  4. Detail Findings & Analysis of the Survey Results
  5. Conclusion & Recommendation
  6. Appendix

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Company Background

  • American over-the-top content platform and production company
  • Founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California
  • 195.15 million subscribers as of Q3 2020 worldwide
  • US & Canada (37%), Europe, Middle East, and Africa (32%), Latin America (19%), Asia Pacific (12%)

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Marketing Opportunity

Asia-Pacific region accounted for 7.3% of company sales in 2019, with 16 million customers. The streaming video market size in China from 2013 to 2015 has grown from $2.3 billions USD to $14 billions USD. Southeast Asia includes 600 million potential customers, and it is a growing market.

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Purpose of Research Project

  • Decision Problem: How to increase the customer base in Asia and retain subscribers on a global scale?�
  • Research Problem: To determine international customer’s product & service needs, lifestyle, localization development and derivative product development.

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Data Sources & Methodology

  • Secondary data: industry trend, company strategy, financial and customer data

  • Netflix’s public files
  • Passport
  • NYU Library
  • Statista

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Data Sources & Methodology

  • Target Audiences
  • Age 18-64
  • Major user group: 25-34 years (36%)
  • Low income 41%, Medium income 32%, High income 27%

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Data Sources & Methodology

  • Online Survey: customer’s product & service need, preference, and lifestyle
  • Data Collection Tool
  • Qualtrics

  • Sampling Method
  • Non-Probability Sampling: Availability

  • Numbers of Respondents
  • 97

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Data Sources & Methodology

  • Survey Question Area
  • Questions for Video Streaming Services
  • How often of using
  • Preferences of platforms

  • Questions for Netflix
  • User satisfaction
  • Video content preference

  • Personal Questions
  • Location
  • Gender

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Detailed Findings

Basic Summary

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Detailed Findings: General

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Detailed Findings: General

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Detailed Findings: General

  • 66% of respondents watch video everyday
  • Average 10.04 hours per week
  • Average 1.43 hours per day

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Detailed Findings: Competitors

Q: Which video streaming services do you primarily use?

95% Yes

5% No

72.5% Yes

27.5% No

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Detailed Findings: Competitors

Q: Why did you choose those platforms specifically?

Q: Is there any way your primary streaming service can be improved?

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Detailed Findings: Netflix

Q: Do you currently or use to have a Netflix subscription plan?

71.25% Yes

28.75% No

Q: How many hours per week do you stream movies or TV shows using Netflix?

Average: 4.94 hours

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Detailed Findings: Netflix

Q: How would you rate the Netflix for different elements?

Most reasons of what respondents LIKE about Netflix:

  1. Good contents (including Netflix originals)
  2. High quality
  3. Ease of use
  4. Subtitles
  5. Others (including price, UIUX, streaming speed, no ads, accessibility, entertaining, personalize, etc.)

Median

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Detailed Findings: Netflix

Q: Is there any area where Netflix can be improved?

Most reasons of what respondents DISLIKE about Netflix:

  • Not enough contents, particularly in Asian movies and shows
  • Overpriced
  • Others including recommendation system, UIUX, ads, streaming speed, ease of use, security, region limitation, etc.

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Detailed Findings: Netflix

Q: On a 10-point scale, how much you like each content category on Netflix?

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Detailed Findings

Analysis of Multiple Variables

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Detailed Findings: Analysis of Multiple Variables

Q: Is there a difference between using Netflix and regions?

We found no difference between using Netflix and regions.

Infers that which region they are does not influence whether they use Netflix or not.

Method used: Chi-Square Test

P-value = 0.677

North America

Asia

Europe

Total

Use Netflix

71.4%

71.6%

100%

72.5%

Do Not Use Netflix

28.6%

28.1%

0%

27.5%

Total

100%

100%

100%

100%

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Detailed Findings: Analysis of Multiple Variables

Q: Is there a difference by Geography on how Netflix can be improved?

North America

Asia

Europe

Total

P-Value

User interface

13.3%

22.0%

0.0%

19.0%

0.602

Navigation and video accessibility

13.3%

30.0%

0.0%

24.6%

0.315

Video content

53.3%

42.5%

100.0%

47.4%

0.245

Streaming quality

6.7%

17.5%

0.0%

14.0%

0.497

Privacy and Security

0.0%

15.0%

100.0%

14.0%

0.001

Advertisement

13.3%

15.0%

0.0%

14.0%

0.834

Customer Services

6.7%

2.5%

0.0%

3.5%

0.728

Others

13.3%

5.0%

0.0%

7.0%

0.518

We found a difference between how Netflix can be improved and regions only in privacy and security.

Infers that users in North America don’t think Netflix should improve privacy and security, but 100% respondents in Europe think that Netflix should improve privacy and security.

Method used: Chi-Square Test

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Detailed Findings: Analysis of Multiple Variables

We found no difference between the amount of hours watched and the ratings given

Infers that the entire user base interacts with the platform in the same way

Found there is no difference between men and women’s ratings toward elements of Netflix subscription

Q: Is there a difference between the amount of hours watched on the Netflix platform and the rating given to elements of Netflix?

=

Method used: Correlation

Regression Analysis not needed due to correlation results

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Detailed Findings: Analysis of Multiple Variables

Q: Is there a difference in Netflix subscription to respondent’s average video consumption time?

We found there is no difference in the respondent's choice of subscribing to Netflix to their average time spent on video consumption.

Indicates that the hours users spent on streaming videos have no relation to their decisions on whether subscribing to Netflix or not.

P-VALUE = 0.648

Method used: Independent T-Test

P-value = 0.648

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Detailed Findings: Analysis of Multiple Variables

Q: Is there a difference between age and the amount of hours watch videos?

Method: Correlation

We found no difference between age and the amount of hours watch videos.

There is no relationship between respondent’s age and how many hours they spend on watching video.

P-VALUE = 0.916

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Conclusion

  • Biggest factors regarding video platform choice: ease of use and video content

  • Youtube is strong competitor with larger overall market share

  • Respondents tend to prefer watching the Netflix Originals and movies on Netflix over other content categories.

  • For why the respondents like and dislike Netflix, the main reason for both is the contents. They like Netflix because of original productions, but dislike it due to not having enough Asian contents.

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Recommendations

  • Expand on Asian content selections
  • Reinforce content subtitles in foreign (asian) languages
  • Continue the work on the Netflix Originals contents
  • Partnership with other video services in China

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Thank you!

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APPENDIX 〉

(n.d.). Retrieved October 05, 2020, from http://www.chyxx.com/industry/201807/662706.html

Netflix. "Number of Netflix paying streaming subscribers worldwide in 3rd quarter 2020, by region (in millions)." Chart. October 20, 2020. Statista. Accessed November 27, 2020. https://www-statista-com.proxy.library.nyu.edu/statistics/483112/netflix-subscribers/

Video Streaming (SVoD). (n.d.). Retrieved October 05, 2020, from https://www-statista-com.proxy.library.nyu.edu/outlook/206/100/video-streaming--svod-/worldwide

Why Is Netflix Struggling In Asia, and Who Are They Competing Against? (2020, June 25). Retrieved December 07, 2020, from https://flixed.io/netflix-struggling-asia/

Kharpal, A. (2019, May 10). Netflix has a China strategy - but it doesn't involve launching there soon. Retrieved December 07, 2020, from https://www.cnbc.com/2019/05/10/netflix-has-a-china-strategy-it-doesnt-involve-launching-there-soon.html

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