Netflix: rise, fall and recovery
Abstract
Purpose
Netflix is the market leader in the streaming entertainment industry. In 2020 and 2021, Netflix’s subscriber numbers and revenue increased. During the first two quarters of 2022, Netflix lost millions of subscribers, revenue and profit declined and its share price and market capitalization deteriorated. The purpose of this study is to investigate how and why a company with such a strong track record as Netflix can experience this crisis and, most importantly, how it overcame the crisis and returned to growth.
Design/methodology/approach
This case study investigates Netflix’s rise, fall and recovery between 2020 and 2023 using qualitative research methods. It examines earnings calls, transcripts and letters to shareholders as well as the views of investment analysts, journalists and academics.
Findings
Netflix turned its fortunes around because its leaders faced the crisis head-on. They acknowledged that previous strategic decisions were no longer working, that no advertisements were on the platform and that there was no account sharing and they reversed these decisions. Netflix also realized that it needed to innovate, so it partnered with Microsoft to execute its go-to-market with advertising. It also launched games, made strategic acquisitions of gaming studios and developed its capabilities with new products.
Originality/value
This is a valuable case study. Investigating how a company as successful as Netflix can encounter a severe decline and how it changed its strategies and tactics to reverse the decline provides important lessons for other companies.
Keywords
Citation
de Zilwa, D.K. (2023), "Netflix: rise, fall and recovery", Journal of Business Strategy, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JBS-08-2023-0177
Publisher
:Emerald Publishing Limited
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