Netflix - Description of Organization, All Subsidiaries And/or Strategic Business Units

Netflix:

Description of Organization, all subsidiaries and/or strategic business units

Technology has grown exponentially over the past decade. In the late 1990’s there were only a handful of websites available for browsing. Today over 800 million registered websites are available on the internet. As technology has grown, the means of entertainment have also evolved. The traditional movie nights, which started by renting a movie from the local movie rental store has also changed. Customers do not have to drive to the movie stores anymore but rather can get movies delivered to their homes. Out of the many websites launched in 1997, a new website and business named Netflix was launched to revolutionize entertainment.

Netflix Inc. is the world’s leading internet subscription service for TV shows and movies. It provides users unlimited streaming of TV shows and movies over the internet to TVs, computers and mobile devices. It also provides DVDs and Blu-ray discs for rentals that are easily delivered to a user’s home.

Netflix at present does not have any subsidiaries or branches. It is a single unit business. However, Red Envelope Entertainment was a film production and distribution started by Netflix and was later closed in 2008. Netflix’s management team made a decision in 2011 which was to separate their movie rental business from online streaming business. They named their new subsidiary “Qwikster”. This new strategy came along with increase in subscription rates because users needed two separate accounts for the two different services. Customers were not happy with this change and Netflix faced a drop in subscribers (Goldfayn, 2011). The mistake by the management team was soon realized and the idea was dropped to separate the two services and within a month “Qwikster” was shut down. Streaming and DVD by mail content went back to all being available on Netflix.

Netflix has partnerships with marketing, production and distribution companies (ABC/Disney and Starz). The CEO of Netflix, Reed Hastings is a member of the board for Microsoft, Facebook and several other non-profit organizations.

Historical perspective of the organization

Netflix was established in 1997 in Scotts Valley, California by technology entrepreneurs Reed Hastings and Marc Randolph (Funding universe, N.D). The thought of Netflix came to Reed Hastings when he was charged $40 for late fees from Blockbuster. He had then asked the question to himself on how to make the movie rental business better and appealing to customers. (eHow Money, N.D). Hastings is now the co-founder and the CEO of the company. The company was founded to rent and sell DVD’s via mail. Over the course of the years it has increased its product line and has now allowed users to stream movies online. By 2009, Netflix exceeded over 10 million subscribers