The first answer we wanted to get from our research was to find out why people decided not to subscribe to Netflix. When analyzing the results we found that the main reason people passed on buying Netflix was the lack of selection they provided to the consumer. Of the 100 participants who completed the survey, 40 choose the option of “lack of selection” as their main reason. This is an important piece of data for Netflix to have as it gives them an idea of what they need to improve to increase the number of subscribers to Netflix.
The second leading factor why people choose to not to purchase Netflix was price, at 25 participants. The result of 25 percent of the people choosing price as their leading factor why they would not purchase Netflix was surprising, as Netflix is already very inexpensive. Upon reviewing the data closer a few conclusions can be made why there was an influx of people that choose price as a main factor.
The bulk of participants that choose price as a main factor 11 of 25 came from the age category of 18-25 came from this age bracket. This is an important factor to consider as most of these participants may be taking some sort of post secondary education. As a student making multiple payments on tuition, rent, food, cell phones, transportation, and all other expenses that fall into the student budget, an extra expense such as a Netflix subscription, may be an expense that gets cut out of the budget, thus describing the large amount of participants that choose price as being an important factor in their decision to purchase Netflix.
A third piece of data that would be of interest to Netflix would be the trend of the steady decline of Netflix users as you move into older age categories. The number of people in the 18-25 age brackets that had Netflix was 11.This was followed by the 26-35 age bracket that received 4, 3 or the category of 36-50 and 1 for 51-64. This decline could be worrisome for Netflix as it may show its lack of popularity among older age groups. This data can provide Netflix a reason to target specific age categories, and create marketing strategies that appeal to these age groups. There is one limitation however with this data, as the sample size for the survey was relatively small. It would be within the interest of Netflix to further investigate these results to make clarify the legitimacy of this trend.
Finally, an interesting statistic to look at was why price is a main factor for consumers, is the cross tabulation between reasons why people don’t have Netflix, and preferred method to watch movies. Most of the people who had price as their main reason for not purchasing Netflix preferred to watch their movies on their household cable/satellite provider, and by renting movies from the store. This might cause some confusion because both methods can be more pricy than Netflix. An answer to this data may be found in the cross tabulation between reasons for not having, and how many times you watch movies. Participants that had price as their primary factor also fell into the category of watching movies 1-2, and 3-5 times a month. People may rather occasionally purchase a movie than subscribe for a month on Netflix.
Another possible limitation on these statistics of how many movies people watch a month is how many of these movies involve a monetary transaction. For example there are some movies on a satellite network that are of no cost, and DVD’s that may have been purchased years ago may also fall into the amount of movies that people watch a month. A person who identifies themselves with watching 3-5 movies a month may not be paying, as these 3-5 movies may be DVD’s, and free movies on cable; as a result these participant find no need in paying any money for an another source for movies such as Netflix.
This chart was one of the most successful cross tabs we performed as the p-value for significance was a staggering .000. This was the most significant cross tab to us because it shows that the large portion of the population who views movies through their household cable and satellite provider’s main reasons for not having Netflix is the lack of selection. This may be a result of the ability to get new releases with cable and satellite, as opposed to Netflix who is yet to acquire new releases.
Most of the participants who took our survey view movies through household cable or satellite providers, and to know that their main reason for not subscribing to Netflix is due to lack of selection is extremely significant and crucially important in targeting this particular market. The very fact that the selection offered by our client is sparse, contributes to their inability to be able to satisfy the public who want a large selection of movies offered from Netflix compared to that of their home cable or satellite providers. According to this chart, we feel that an increased selection of movies would entice the customers who belong to the movie dominated cable or satellite market, and therefore the establishment of a predominant client base will ensue.
Conclusion:
We have attempted to determine and investigate the variety of methods for increasing Netflix’s Canadian market share.Of the 80 survey participants not having Netflix, 34 participants indicated that their method of viewing most commonly used for viewing movies was through a household cable or satellite provider. There was only one participant who indicated both that they were subscribed to Netflix and that their most common method of viewing movies was through their household or cable satellite provider, suggesting that Netflix may be able to expand their Canadian operations considerably by targeting this market. . This suggests that despite the lower price of a Netflix subscription, people were more inclined to use their household cable or satellite provider. This indicates that price is not the main factor in their chosen method of viewing movies. It is likely that these participants prefer the selection of movies offered using this method, opposed to Netflix.
With the availability of new releases being a dominant factor in the decision to subscribe or not subscribe, it is plausible that a perceived lack of new releases may have contributed to the ultimate decision of survey participants to not subscribe. A survey participant’s price sensitivity may either drive that survey participant towards Netflix or towards entertainment alternatives they place higher value on (e.g. Subscription to a Winnipeg Jets game package).
Geographic area greatly influences demographic data and, consequently, further marketing research may be desirable if markets outside Winnipeg are in need of demographic and subscriber profile data. If we were to research outside of the Winnipeg area, our findings would differ and we would get a different perspective on how people view movies. If Netflix was to further their research, we recommend that they expand their research into different geographical areas.
Our research was mostly conducted with people ages 18 to 25. Amongst these participants they were more likely to subscribe to Netflix, despite having lesser incomes than older participants. Netflix is loosing out on this older market, who are able to purchase a subscription, however are not motivated to do so. We recommend that Netflix further extends their research to focus groups examining why those aged 35 and older are not subscribing to the same extent as young survey participants is recommended. High income individuals were also less likely to subscribe, something which future qualitative research could explore in more depth. By doing these focus groups, we would be able to identify the real motivations and discouragements. These older demographic groups are an opportunity for Netflix to increase their target market.
If Netflix offered an a la carte selections or bundle option to their membership they might encourage new subscribers and garner a larger share of the market. A new marketing strategy incorporating our key findings and/or further marketing research conducted as part of a new marketing strategy may allow Netflix to increase its market share in the online media streaming and video entertainment segments in Canada.
