Netflix and Facebook: A Case Study

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Introduction

The ability for marketers to make use of user generated content from social networking sites such as Facebook enhances the chances of developing personalized and targeted advertisements and promotional content to specific customers, thus increasing profitability through acquisition of larger market share and competitive advantage. Targeted, personalized and interactive marketing helps to increase customer retention and enhances customer loyalty making a company’s products and services increasingly irresistible leading to repeat purchases and higher profitability as well as reduced customer servicing costs.

Netflix Incorporated: An Overview

According to Allen & Vicente (2012), Netflix was co-founded in 1998 by Reed Hastings and Marc Randolph. Hastings came up with the idea of disc-by-mail service after he was forced to pay a $40 late fee for a VHS movie rental of Apollo 13. In 1998, Netflix began offering disc-by-mail rental services for $4 per rental plus a postage fee. In 1999, Netflix modified its revenue model from a per-rental charge to a monthly flat subscription charge model that included all shipping fees and abolished the late penalty charges. In the year 2000, Netflix launched its personalized film recommendation system. This system made use of subscriber ratings to predict film choices and preferences for subscribers. In the year 2002, Netflix made an initial public offering (IPO), raising $85 million by selling 5,500,000 shares at $15 per share on the NASDAQ. In the year 2007, Netflix joined Facebook and introduced streaming enabling the subscribers to instantly watch TV programs and movies on their personal computers.

Facebook friends, whether it sells through Facebook or not? What facilities, resou...

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...ilable at < http://www.nealmcdevitt.com/assets/news/Top_10_Social_Media_Legal_Issues_FINA PDF> accessed, March 13, 2014.

Palmer, A. & Koenig‐Lewis, N. (2009). An experiential, social network‐based approach to direct marketing, Direct Marketing: An International Journal, 3(3) [online]. Available at , Accessed March 14, 2014.

Pletikosa, I., Spiegler, E. D. & Michahelles, F. (2013). Evaluation framework for social media brand presence, Social Network Analysis and Mining 3(4), pp. 1325-1349

VanDyke, D. (2011). Facebook Marketing Secrets. [online] available at < http://www.myezsuite.com/giveaways/FacebookMarketingSecrets.pdf> accessed March 14, 2014

Facebook-Netflix. (n.d.). Facebook. [online] available at < http://www.facebook.com/netflix>, Accessed March 14, 2014.

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