Case Study

Is Netflix building a house of cards?

20 pages
December 2020
Reference: IMD-7-2185

Netflix’s stellar growth is jeopardized by a changing competitive landscape and fluctuating trust from the market related to its strategy of extensive proprietary content development. With the rising presence of Google’s YouTube and Amazon’s Prime Video, as well as Apple’s Apple TV Plus and Disney’s Disney Plus entry into the ring, customers get access to a broader range of content and aggregated offerings. Still, content seems king, and Netflix seeks to outrun competitors with their own award winning and broad video library. That however requires increasing content investments followed by costly marketing efforts to sustain growth. Critics wonder if Netflix’s continued binge-spending will translate into sustainable growth while debts increasingly weight on the balance sheet and cash flow remains negative. In a time when most competitors seek to vertically integrate or platformize, often fueled by deep pockets, is Netflix pursuing still the right strategy? Or does Netflix need to revise its business model in order to successfully compete also in the future? This case explores what’s going on for and around Netflix, inviting students to redefine Netflix’s future strategic direction.

Learning Objective
  • Studying Netflix’s current strategy in the highly dynamic media sector allows students to evaluate Netflix’s key resources and capabilities against a variety of aggressive competitors that all demand a share of the Video on Demand Streaming business Netflix still leads.
  • Make a holistic financial assessment of the company’s three annual report statements.
  • As the case offers suggestions on platform business models, readers have a range of options for Netflix’s strategic future.
Data Analytics, Big Data, Media, Video Streaming, On-demand
Netflix, Media, Information Technology
2019 onwards
Published Sources
© 2020
Available Languages
Related material
Teaching note
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