Netflix PESTLE Analysis: Business Sector: Media and Entertainment About

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Netflix PESTLE Analysis

Business Sector : Media and Entertainment

About :
Founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California. Netflix stands with
a total of 193 million paid subscription (as on April 2020). Its streaming service and global presence
have made it a remarkable company.

Revenue : $5.768B (as on March 2020)

PESTLE Analysis :
• Political Factors
Netflix operates in 189 countries with 193 million users; thus several political factors
affect its regular operations. It has to keep a close eye on the policies such as laws, tariffs, tax
policy, trade restrictions, political stability and reforms.

Netflix is still not present in mainland China due to permission issues, thus leaving a
potential market untapped

• Economic Factors
Economic activities directly affects an organisation Higher economic activity and
employment level lead to higher spending on leisure activities and entertainment.

During this lockdown, Netflix has observed significant rise in memberships. Low
economic activity prolonged over a long time can adversely effect since people tend to cut
expenses.

• Social Factors
Netflix is catering a global audience. The millennials and Gen-Z are the main target of
Netflix and the brand has made its products to cater mainly to the taste of the modern
generations.

• Technological Factors
The company uses various algorithms and machine learning to recommend the
shows and movies worth watching to individual subscribers. This is how the Netflix has created
an exclusive and unique experience for its subscribers. Artificial Intelligence has played a
crucial role in shaping the company’s profile and cater to user experience.

• Legal Factors
Piracy and Copyright issues are also a hinderance in Netflix’s operations. Sharing
credentials is also an issue for Netflix.

• Environmental Factors
Using wind power to offset energy for cloud storage is a new initiative to reduce its
carbon footprints

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