Netflix Campaign by Eden Lauffer

CAMPAIGN PROPOSAL JANUARY 2015- DECEMBER 2015

Recommended to you by:

TABLE OF CONTENTS Letter of Introduction Executive Summary INTRODUCTION Brand History Competetive Analysis Terminology

i ii 1 1 1 4

SITUATION ANALYSIS Recommended Target Audience Target Audience Motivations Problems and Opportunities Secondary Research Primary Research Results SWOT Analysis

5 8 9 9 11 11 14

CAMPAIGN GOALS AND OBJECTIVES Marketing Goals Campaign Timeline Communication Goals Budget/Contingency Funds

17 19 20 21

MEDIA STRATEGY AND TACTICS Media Strategy Media Selection Reach/Frequency Goals Timing Issues/Scheduling Pattern

23 23 26 30 31

CREATIVE CONCEPTS AND EXECUTIONS

PROMOTIONAL STRATEGIES

CAMPAIGN BENCHMARKING

Summary References Appendix

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4312 Mission Street

San Francisco, CA 94105

Phone: (415) 692-4428

Fax: (415) 502-1796 www.inpulse.com

Kelly Bennett, Chief Marketing Oﬃcer

100 Winchester Circle

Los Gatos, California 95032

Phone: (408) 540-3700    Dear Mr. Kelly Bennett:

In the following document you will find strategic campaign recommendations made for you by Inpulse. These recommendations take into consideration the existing state of Netflix and aim to help you uncover untapped potential in the online streaming market. Attached you will find a situational analysis, campaign goals, a recommended target audience as well as creative and media strategies and executions. Additionally, we have included our secondary research findings as well as the primary research we have conducted. We hope that our research and recommendations will align with your marketing goals for Netflix for the upcoming year.

Sincerely,

__________________________________________

Enclosure.

EXECUTIVE SUMMARY Competitive Analysis   We’ll take a look at who we at Inpulse consider to be Netflix’s main competitors including: Hulu, HBO GO, Amazon and other online streaming services. We’ll discuss how these companies and online streaming sites compare to Netflix both in content, revenue and subscribers.

SWOT We’ll discuss the main strengths, weaknesses, opportunities and threats that Netflix encounters.

Recommended Target Audience Adults ages 18-34.

Problems & Opportunities Through secondary research of adults ages 18-34, we have become aware of problems that may arise within the recommended target audience. The borrowing of Netflix accounts could potentially lead to a free rider problem. However, this could turn into an opportunity for Netflix to allow these borrowers to gain experience with their services in hopes that they will want to purchase their own accounts in the future.

Secondary Research The secondary research found by Inpulse suggests that there are about 10 million non paying Netflix users (Greenfield, 2013). From the evidence we found, we recommend that Netflix market to those who have borrowed accounts because these non paying users are more likely to be swayed into becoming paying Netflix users within the next six months (Wallenstein, 2013). Based on this research, Inpulse advises Netflix to focus primarily on the personalized profile feature.

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INTRODUCTION Brand History Founded in 1997, Netflix is a leading Internet TV network headquartered in California. In 2007, Netflix launched its streaming service, joining its DVD delivery service with a total reach of nearly 50 countries worldwide. According to the company profile, more than 50 million subscribers enjoy over two billion hours of commercial-free streaming per month (Netflix, 2014).

At the completion of the third quarter (Q3), Netflix saw an increase in the number of members as well as revenue. Total global member count increased by three million to reach a total of 53.06 million global subscribers (Netflix, 2014). In addition, Netflix ended Q3 with $1.22 billion in revenue (Netflix, 2014). With the beginning of a new quarter, Netflix has made forecasts for continued success as it enters the last quarter of 2014. Netflix plans to acquire an additional four million members--to raise the total global member count to 57.06 million--as well as see a predicted increase in revenue to $1.31 billion (Netflix Quarterly Earnings, 2014).

Competitive Analysis   Netflix’s greatest competitors are other Internet-based movie and TV content providers, both that provide legal and illegal (or pirated) entertainment video content, and other on demand entertainment services (Netflix, 2014). While each service may provide something unique to its consumers, the overall theme for competitors revolves around convenience and quality.

Hulu and Hulu Plus One of Netflix’s main competitors is Hulu, a streaming service that has oﬀered TV shows, clips, and movies on a free, ad-supported site since 2007. Hulu also has a subscription service called Hulu Plus, which costs $7.99/month (Hulu, 2014). In 2012, Hulu generated $695 million in revenue and increased the number of Hulu Plus subscribers to five million (Kafka, 2013). Figure 2 in Appendix C shows the growth and 1

steady increase in revenue from 2009 until 2013. Hulu ended 2013 with $1 billion in revenues (Hopkins, 2013).

With the addition of new premium programming, new TV series and episodes, and an increase in video content, Hulu has grown their service drastically on both Hulu and Hulu Plus (Hopkins, 2013). According to a blog post by Hulu CEO Mike Hopkins, “the company has expanded to oﬀer 488 content providers that oﬀer premium programming, over 86,000 TV episodes and 2,900 unique TV series, as well as 68,000 hours of video” (Hopkins, 2013). In 2013, Hulu released more than 20 originally produced programs and has plans to raise this number significantly in the upcoming years (Hopkins, 2013).

HBO GO While HBO GO is an online video service like Netflix and Hulu Plus, it oﬀers original programming solely from the HBO cable network (and its parent company Time Warner Inc.), as well as theatrically released movies. This attribute sets HBO GO apart from Netflix and Hulu because instead of purchasing the rights to certain programs, HBO GO provides its own content to paying members.

According to the Netflix Q3 2014 Letter to Shareholders, in 2011, Netflix declared HBO as their primary long-term competitor. This fall, HBO CEO Richard Plepler announced that HBO GO will make its streaming service debut as a standalone service by 2015 (Fato, 2014). In response, Netflix believes that “the competition will drive us both to be better” and that many people will subscribe to both services simultaneously, due to the variety of content available with each service (Netflix Quarterly Earnings, 2014). Pricing for the new standalone service is not yet known, but a traditional subscription to HBO is made through a cable provider only.

In its 2013 Annual Report to Shareholders, by the end of 2013, HBO GO grew 30 percent to include nine million registered users who have access to over 1,700 hours of programming (Time Warner, 2013). The Wall Street Journal reported that HBO may be

more profitable than Netflix, but slower growing. At the conclusion of 2013, HBO revenues grew by 4 percent to $4.9 billion (Sharma, 2014).

Amazon Founded in 1994, Amazonâ&#x20AC;&#x2122;s mission is to be the one stop shop for anything consumers may want to buy online while striving to provide consumers with the lowest prices possible (About Amazon, 2014).

Amazon oďŹ&#x20AC;ers those with an Amazon Prime Membership access to Prime Instant Video, which functions similarly to other Internet streaming sites. Since its 2011 launch, Prime Instant Video has increased its collection of 5,000 titles to more than 40,000 TV episodes and movies (Amazon, 2014). According to its second quarter financial report, Amazon net sales increased 23 percent to $19.34 billion, which is a $3.64 billion increase compared to the second quarter in 2013 (Amazon, 2014). In the same financial statement, Amazon lists its third quarter projections for 2014 to expand between 15 and 26 percent compared to the third quarter in 2013. This means sales would range between $19.7 billion and $21.5 billion (Amazon, 2014).

Illegal/Pirated Streaming Sites Last year, when Netflix launched in the Netherlands, much talk revolved around the popularity of torrenting TV and movie content there. With free, illegal streaming sites as a competitor, Netflix has been accused by bloggers of basing their content oďŹ&#x20AC; of what is provided on these sites (Ernesto, 2013). Where Netflix lacks in content, pirated sites fill the gaps, but at no charge. Therefore, many consumers weigh the risk of being caught illegally downloading content or paying for it, and go with the free, illegal option and instead of Netflix (Knapp, 2014).

Despite this, Netflix has had an impact on lowering piracy rates in Norway. Following the launch of Netflix in this market, Forbes reported that

“In 2012, the researchers found there are only around 65 million

illegal movie downloads and 55 million TV downloads, compared

with 125 million and 135 million, respectively, in 2008” (Chu, 2013).

Terminology Through the research conducted at Inpulse, we were able to divide Netflix users into three categories, which we will refer to throughout this document.

■ Netflix Users are those who use Netflix through their own account or under a family account.

■ Netflix Borrowers are defined as those who do not pay for their own account. They use the service, but through a friend’s account.

■ Non Netflix Users include those who online stream but through diﬀerent services including HBO GO, HULU, Amazon and illegal/pirated streaming sites. This category also includes individuals who do not watch movies or TV series through online streaming.

SITUATION ANALYSIS Recommended Target Audience Inpulse recommends that Netflix direct their campaign toward adults, ages 18-34. According to a video cited in Lisa Bauman’s report titled “Netflix: Position and Marketing,” adults ages 18-24 display the greatest use of online streaming (Bauman, 2013). These adults spend approximately 3.7 hours per week streaming online content (Bauman, 2013). Simmons Oneview and Experian Information Solutions (Appendix C , Figure 4) reports that adults ages 18-34 are 88 percent more likely to have watched videos, TV programs or movies online in the past week than the average consumer (Experian Information Solutions, Inc., 2011). Additionally, according to the Pew Research Center’s Internet & American Life Project titled “Social Media and Young Adults,” adults within this age range have more disposable time (Lenhart, 2010). They are able to be more flexible when it comes to their income and they also have more technological capabilities (Lenhart, 2010). The report also shows that this target audience is more likely to live at home, so although they can be more flexible with their money, these adults are more likely to earn less and therefore depend on their families for economic support (Lenhart, 2010).

Inpulse recommends this specific target audience because 93 percent of the adults ages 18-29 often report “going online” (Lenhart, 2010). Therefore, they most likely have experience with technology and would not be easily confused. We recommend, however, that Netflix expand this target audience to include 25-34 year olds. While 18to 24-year-olds are the strongest online streaming demographic, we suggest that Netflix aim to motivate consumers to purchase their own Netflix account when they are no longer dependent on family income.

Our findings through Simmons Oneview and Experian Information Solutions (Appendix C, Figures 1, 3 & 4) tell us various things. First, adults ages 18-34 on average (Index = 100), agree that they can be referred to as “TV addicts” (Experian Information Solutions, Inc., 2011). Second, they also agree on average that the Internet has 5

become a primary source of entertainment for them (Index = 100), and that it has changed the way they spend their free time (Index = 100) (Experian Information Solutions, Inc., 2011). Since the average adult in this age range enjoys watching TV and spending time on the Internet, Inpulse believes that it would be in the best interest of Netflix to direct their future campaign toward this target audience.

Target Audience Profiles USER Eric is a 28-year-old young professional living and working in Boston. He got a Netflix account a few years ago after one of his coworkers kept raving about it, but he hasnâ&#x20AC;&#x2122;t used it as much as he did when he first got it. Eric mainly uses his Netflix account to look up movies and watch them as his friends recommend them to him in conversation. Most recently, when he logged onto his Netflix account he noticed the option to make a profile. Eric is unsure of what the profile feature can do for him and would likely be interested in learning how it works.

Inpulse recommends that Netflix market the features of personalized profiles to Eric. This way Eric will get more out of his account and be likely to use it more often and continue his subscribership. Inpulse notes that it is important that Netflix continue to market to their existing users as not to lose them.

BORROWER Mike is a 22-year-old senior in college. Heâ&#x20AC;&#x2122;s nearing graduation and has a job lined up in Chicago. He enjoys watching football, comedies, and horror movies with his friends. Mike has been dating Katie for a year. She considers romantic comedies to be funny, but Mike does not, and Katie hates horror movies because of the gore, but she still lets Mike use her Netflix account. When Katie opens her Netflix account to watch How to Lose a Guy in 10 Days it bothers her when her Netflix account recommends The Grudge and Carrie.

Inpulse recommends that Netflix focus on marketing to Mike to create his own profile so that he and Katie can both use her account, but watch what they like without interfering with each other. This way Mike wonâ&#x20AC;&#x2122;t login with his friends and have his top picks say Love Actually and Crazy Stupid Love, which he finds embarrassing. Since Mike will be graduating and moving to Chicago in a few months he is a prime candidate for his own account.

Inpulse sees consumers like Mike as opportunities. If Netflix can successfully get these account borrowers to make profiles on the accounts they are already using and become familiar with the service, they are more likely to get their own account in the future. When Mike has his own source of income we hope that he will be interested in his own account.

NON USER

Emily is a 30-year-old young professional. She lives by herself outside of Los Angeles, but works in the city. She works long hours and usually doesn’t leave the office until 6:30. With all of the traffic in Los Angeles, it takes Emily about an hour to get home. By the time she gets there, all she wants to do is eat dinner and watch some TV. Unfortunately, Emily has difficulty finding something on TV that she actually wants to watch most nights. Sometimes she gives in and pays the five dollars to her cable provider to rent a pay per view movie.

Emily’s friend Trevor has a Netflix account, which he tells her he loves using. She’s skeptical though. With the service costing $8.99 a month, Emily is unsure if Netflix is really something she needs.

Inpulse recommends that Netflix market their service to Emily by showing her the wide selection of TV and movies, which make the $8.99 per month rate worth it. Inpulse recommends showing Emily the value of personalized profiles too. Since Emily is unhappy with the selection her cable provider gives her through linear TV, it is likely that she will be pleased with what the Netflix algorithm can show her. Marketing to non users like Emily will more immediately fulfill Inpulse’s recommended long term goal for Netflix by growing their paying user base.

Target Audience Motivations Our secondary research of the recommended target audience has led us to believe that they will be more motivated to purchase their own Netflix accounts due to the personalized profile feature Netflix oﬀers. According to Donald Parente, author of 8

“Advertising Campaign Strategy: A Guide To Marketing Communication Plans,” young adults enjoy purchasing products that are customized to fit their wants and needs (Parente, 2006). Parente’s text talks about how consumers appreciate products that they feel are unique and can be tailor-made to reflect their personalities (Parente, 2006). Therefore, after learning how Netflix allows users to personalize their accounts in order to cater their services to the wants of every consumer, the target audience might be persuaded into purchasing their own accounts if they do not already have their own.

Problems and Opportunities with Stated Target Audience With one-third of the recommended target audience hailing from the borrower category, it is possible that Netflix struggles with what is called the “free rider problem” (Investopedia, 2014). “The free rider problem refers to a situation where some individuals in a population either consume more than their fair share of a common resource, or pay less than their fair share of the cost of a common resource” (Investopedia, 2014). With 10 million Netflix borrowers using the service for free, there is great potential for this to turn into a problem Netflix will face in the future (Greenfield, 2013).

Despite the fact that it can turn into a problem, free riding can also be viewed as an opportunity for the recommended target audience. Although Netflix borrowers are not necessarily paying for their own accounts, they are still able to experience the services that Netflix has to oﬀer. If these borrowers grow accustomed to Netflix’s services and enjoy the experience, Inpulse believes that they may be more likely to purchase and create their own accounts in the future. As stated before, the average turnover time is six months, with 33 percent of Netflix non subscribers expressing intent to pay for the service (Wallenstein, 2013).

Secondary Research In 2007, Netflix became a pioneer in Internet TV when they launched their online, movie and TV streaming service in the United States. With a single monthly subscription of $7.99 and unlimited access to a variety of movies and TV shows, consumers began to

associate Netflix with an “all access” nature that kept them connected to the brand (Archer, 2014).

In October 2014, Netflix’s stock fell 24 percent after announcing their predicted subscriptions reached 980,000 compared to the previous year’s 1.29 million new users (Cohn, 2014). Netflix CEO Reed Hastings blamed the subscriber loss on a price increase that was announced in the spring, which shows how price sensitive members might be (Lopez, 2014).

Under the new initiative, members can either pay $8.99/month for the standard twoscreen streaming service, or $11.99/month for four-screen simultaneous streaming and Ultra HD quality content (Archer, 2014). With a substantial consumer loss after a onedollar price hike, it may be diﬃcult to appeal to consumers who are used to a oneprice, all-access streaming service.

As mentioned earlier, through our secondary research we found the strongest online streaming demographic is 18- to 24-year-old adults who live at home and are dependent on family income to pay for a Netflix account (Bauman, 2013). Using that demographic, we suggest narrowing the campaign to focus on the benefits that Netflix oﬀers on either type of account-- Standard or UHD-- in order to motivate individuals to continue or begin their service with Netflix.

One thing we at Inpulse noticed that stands out about Netflix is the concept of personalization. Through personalized profiles and recommendations based on what has been watched on each profile or account, Netflix has the ability to cater to each individual that uses the service. However, over 10 million people watch Netflix without an account, by sharing passwords (Greenfield, 2013). When diﬀerent personalities watch movies on the same profile or account, the viewing recommendations for the subscriber of the account become inaccurate to their TV and movie watching preferences.

Although the price-hike made some users feel they were not receiving the all-access benefits they had when first joining Netflix, we believe that emphasizing personalization to a young online streaming demographic will motivate consumers to continue their service with Netflix.

Primary Research Methods After gathering the necessary secondary research, Inpulse was able to begin conducting primary research in the form of phone interviews. This type of research method is widely used in tracking studies that measure brand awareness levels, product usage and consumer attitudes.

The questionnaire (Appendix C, Figure 6) we developed encompasses all levels of measurement--nominal, ordinal, interval and ratio--to provide Inpulse with a wide range of data that can later be generalized to a wider population base. We ran multiple statistical tests, including tests of diďŹ&#x20AC;erence and tests of association, to gain a greater understanding of a typical Netflix user.

Sample To better understand the brand awareness and loyalty levels of Netflix users and how they compare to competing online streaming services, Inpulse observed the varying changes in attitudes from people who can be categorized into three distinct groups: Netflix users, Netflix borrowers and non Netflix users. For this study, Inpulse chose to use convenience sampling by reaching out via telephone to adults, ages 18-34, who fit the recommended target audience. Inpulse interviewed 80 individuals and recorded all responses by hand on separate questionnaire forms. This research was administered between October 20 and November 15 of 2014.

Results After analyzing our data through SPSS, we found interesting results that both confirmed and denied our previous assumptions about Netflix users. Many of these 11

results were used when making specific recommendations to Netflix, especially ones concerning marketing goals and the creative approach. Below is a breakdown of our questionnaire respondents, reported in numbers.

Of all the people interviewed, 74 percent use Netflix while 26 percent do not (Appendix A, Figure 1). We found that out of Netflix users, 55 percent say they have a profile under their own account or their familyâ&#x20AC;&#x2122;s account, while 46 percent do not (Appendix A, Figure 2). Of the 46 percent that do not have a profile, 64.3 percent know that they have the ability to create profiles. When asking participants to rate how likely they are to use certain media for TV and movie viewing, we found interesting results. As mentioned earlier, our secondary research found that the 18- to 34-year-old demographic is more likely to use online streaming and less likely to watch linear TV. Below you can see that our results show an equal split between using cable and online streaming.

To gather more insight into consumer preferences toward competing services, we asked our participants how likely they are to use services such as Hulu, HBO GO and pirated streaming sites. Our results showed that 73.3 percent of people are likely to use Netflix, while only 14.1 percent and 35.2 percent are likely to use Hulu and HBO GO, respectively (Appendix A, Figure 3). The second largest percentage (38) came from respondents who said they were likely to use pirated streaming sites.

To better understand what our recommended target audience watches, we asked our participants to rate how likely they are to use Netflix for the following categories: documentaries, movies, original programming and TV series. We found that 96.5 percent are likely to watch TV shows, 59.6 percent are likely to watch original programming and movies and that 38.6 percent are likely to watch documentaries (Appendix A, Figure 4). While over 90 percent of people are likely to use Netflix to watch TV shows, we found that 33 percent of participants find it unimportant to keep up with the latest shows and 39.2 percent are neutral (Appendix A, Figure 5). Despite finding it unimportant to keep up with shows, 63.7 percent of users are satisfied with the variety of shows and movies available on Netflix.

To obtain results that can be closely generalized to the larger 18- to 34-year-old demographic, Inpulse set out to interview a variety of people who fit this description. After completing the surveys we found that the majority of our participants were in their early 20â&#x20AC;&#x2122;s. The following graph shows the participant age distribution.

We also found that 56.3 percent of participants are currently employed and 78.8 percent are currently students.

SWOT Analysis As a service, Netflix has many strengths. At Inpulse, one of the most important strengths we see is the multiple user feature, which allows many people to utilize the service under the same account. This concept was initially intended for families to watch movies and TV shows simultaneously, on different devices, through the same payment plan. Previously, members with large families ran into a two-simultaneousstreaming limit, so now Netflix offers a family plan that allows four movies and TV shows to stream simultaneously through different devices (Welch, 2013).

Another strength within Netflix accounts is the option for personalized profiles. Under the circumstances of having multiple users on one account, each user is able to create a profile that oﬀers viewing recommendations based on what he or she has watched. Before the profiling system, the variety of TV shows and movies being watched by each user would pollute the recommendation system. Because about 75 percent of 14

content viewed on Netflix was suggested to the viewer by the recommendation engine, having separate profiles helps keep the suggestions more accurate (Gilbert, 2013).

As far as TV watching, Netflix provides its users with a commercial-free experience, which is unique to the Netflix service. Our findings through Simmons Oneview and Experian Information Solutions (Appendix C, Figure 1) show us that 18- to 34-year-old adults are more likely to avoid commercials. Additionally, Netflix is leading the world in the Internet TV network with 50 million plus members in approximately 50 diﬀerent countries around the globe (Netflix, 2014). The same cannot be said for competitor, Hulu, an ad-supported site, which does not expand outside of the United States.

As stated earlier, Netflix allows multiple profiles on one account. While this is an extremely useful feature and something unique to the brand, it also is something that could prove harmful to Netflix. Because the service is unable to regulate how many people access one profile, there is no way for Netflix to know if multiple people are using the same one (Hockenson, 2013). In turn, the paying user of the profile does not get the personalized recommendations guaranteed to cater to his or her wants and needs in his or her online streaming experience.

Without regulation of paying and non paying users, if the same account is logged in on multiple devices, it will not be signed oﬀ unless prompted by another user. Therefore, if a user signs into his or her account at a friend’s house and leaves without signing out, that household will gain access to a Netflix account without paying.

Other weaknesses Inpulse sees Netflix facing pertain to content. Netflix is not able to aﬀord all new, mainstream content that Apple TV, Google and Amazon provide to their users (Netflix, 2014). Instead, they provide users with similar movies and TV shows they might like to watch as an alternative. However, because many consumers maintain simultaneous relationships with multiple entertainment video providers, they can easily shift from one provider to another in order to watch what they want (Netflix, 2013).

Netflix does provide original content, which creates a large opportunity for the streaming service. With the release of Orange is the New Black’s second season in June 2014, Netflix gained 570,000 new United States subscribers, helping the service surpass 50 million subscribers worldwide (Associated Press, 2014). By bringing in new content, available only to Netflix subscribers, Netflix has the opportunity to motivate consumers to continue their service for this exclusive content. Recently, Netflix revealed it will be backing a Canadian original series that will debut on all Netflix territories outside of the country (Vlessing, 2014). By extending this benefit to other countries as well, Netflix has the opportunity to gain more worldwide consumers.

New opportunities can also be found through the TV and movie viewing industry. Devices such as the Chrome Dongle and Apple TV, which partner with Netflix, allow for wireless viewing directly to a TV set, giving an online streaming service like Netflix more usability.

The largest threat Inpulse sees facing Netflix is other online streaming services’ defining characteristics. HBO and CBS have recently announced they will be launching their own online streaming subscriber service that will compete with Netflix’s newly raised price (Smith, 2014). Hulu also allows users to watch certain episodes of TV shows and some movies for free. Other legal or illegal, pirated streaming services oﬀer users access to a mass quantity of entertainment content for free.

CAMPAIGN GOALS AND OBJECTIVES Marketing Goals According to the Letter to Shareholders and the Quarterly Earnings Report, Netflix plans on adding 1.85 million new domestic members in Q4 (Netflix Quarterly Earnings, 2014). If successful in doing so, this will increase their global members to 57 million (Netflix Quarterly Earnings, 2014). We at Inpulse want to help Netflix further increase their number of users by promoting the personalized profile features that they oďŹ&#x20AC;er.

To recommend a specific number of domestic net additions for 2015, we looked at each quarterâ&#x20AC;&#x2122;s results from 2012 to 2014 and averaged them to get one total for each year. Based on this strategy, we averaged the three years to come up with a realistic goal for 2015. Below you can see our results, including our prediction for 2015.

Since 40 percent of current Netflix users are 18-34 (Nielsen, 2014), we can project that of the 1.45 million new members, approximately 580,000 will fall into the recommended target audience. Inpulse recommends setting a goal of 650,000 domestic net additions for 18- to 34-year-olds in 2015. This goal is slightly higher than the predicted average but we believe that with proper executions we can help Netflix achieve this goal.

In order to help Netflix obtain these goals, Inpulse suggests implementing a campaign that targets 18- to 34-year-olds and emphasizes the advantages of personalized profiles. Informing this target audience about the benefits of profiles can help Netflix increase its user base even further.

Short Term Goals Inpulse suggests setting a short term goal that focuses on selling the advantages of a personalized profile, aimed specifically at borrowers. When people begin sharing passwords, no additional paying users are being added to the total Netflix users, only the number of profiles increase. As stated in Wallensteinâ&#x20AC;&#x2122;s article, Netflix does not mind people sharing passwords because it is estimated that after six months of a trial run, people are more likely to create their own, unique accounts (Wallenstein, 2013). In the beginning of the campaign, Inpulse suggests advertising the benefits of the Netflix user profiles to get people to experience how personalized Netflix can be.

During our primary research, we found that 88.5 percent of borrowers do not have their own profile on the account they borrow. However, when asked if they have felt an urge to create their own account after borrowing someone elseâ&#x20AC;&#x2122;s, 56 percent said yes.

Targeting borrowers more heavily in the first six months would give Netflix the opportunity to attract those people who are interested in creating their own profiles. Additionally, when users were asked if they would be willing to pay for their own accounts if they had to, 73.3 percent said they are likely to do so.

Long Term Goals Once consumers have become familiar with the profile feature on Netflix, Inpulse suggests a slight shift in the marketing of the service. Instead of focusing solely on the advantages of customized profiles, we suggest marketing the service as a whole, urging borrowers and users who are tagged onto family accounts to create their own accounts and start sharing profiles. This can be implemented after six months, sticking to the idea that people are likely to create their own accounts after this time period. This plan will also help market to the non users who may be unfamiliar with exactly what Netflix can do for them. This shift in marketing will fulfill the long term goals of growing the user base by promoting both profiles and how they work with the entire Netflix service.

Campaign Timeline We at Inpulse believe that Netflix should take a few things into consideration when developing the timeline of their campaign. The campaign will begin on January 1, 2015 and will end in late December of 2015. The addition of the new series House of Cards, which is a Netflix original series, will occur in February of 2015. In addition, Orange Is The New Black, another Netflix original series, will be added in June of 2015. Inpulse recommends that advertising increase during the months of both releases in order to raise instant awareness and generate buzz about the new additions. Inpulse also recommends that Netflix use a pulsing media schedule, which we will explain in more detail later in the Media Strategy section. As previously stated, this means that while consistent traditional and non traditional advertising will run year round, more advertising would occur for the addition of both original series.

What we are recommending for Netflix is an even allocation of advertising budget spent year round with extra stacked for the periods of February and June to create buzz about these shows.

The recommended timeline will utilize traditional media year round to promote Netflix as a service in general and its personalization features. Netflix should also continue to

tweet and post on Facebook as they have been with quotes from popular shows and movies. Inpulse would like to recommend that in the period before the premiere of new seasons of the original series, Netflix increase its social media postings and make more of them related to these shows. Another recommendation for Netflix is to implement outdoor and ambient ads for the premieres of these shows since it proved successful this past summer.

Communication Goals Cognitive and AďŹ&#x20AC;ective Changes Desired We would like Netflix users to place a higher value in their ability to create individual profiles since this allows for more personalized viewing recommendations. Our primary research results found that 46 percent of Netflix users do not have profiles (Appendix A, Figure 2) and that 46.7 percent were unlikely to watch shows and movies suggested by Netflix (Appendix A, Figure 6). However, 64.3 percent of users who do not have profiles said they know that they have the ability to do so. It is possible that with an increase in personalized profiles, viewers will be more likely to rely on Netflix for recommendations.

Once consumers trust that a profile is easy to create and beneficial to their viewing experience they will be more likely to think about making this change. With the ability to click their name and find what they were last watching along with specific, personal recommendations, consumers will soon see the value of having their own profile and later their own account.

Changes in Target Audience Motivations Inpulse wants to assure consumers that being a paying Netflix user has its perks. Netflix is in danger of either losing users or plateauing. With many consumers simply piggybacking onto their friendsâ&#x20AC;&#x2122; accounts and avoiding paying for an account, Netflix could come to a standstill in sales and profits. Inpulse recommends showing consumers what they get as paying users. The target audienceâ&#x20AC;&#x2122;s motivations need to change to understand the benefits the brand can provide them with. Inpulse 20

recommends focusing on personalization in order to persuade the target audience toward the value of Netflix. It is recommended that Netflix express to the recommended target audience exactly what $8.99/month gets them. Based on our primary research, 61.4 percent of Netflix borrowers or non users reported that price is more likely to aﬀect their decision not to sign up for a Netflix account.

Cognitive and Aﬀective Motivations and the Recommended Target Audience’s Behaviors When surveying consumers in the target audience, we found that 55 percent of users have profiles on their or their family’s Netflix accounts. Inpulse recommends focusing on informing consumers about the features of Netflix. This goes for both Netflix users as well as borrowers and non users. Consumers need to be more informed about the features Netflix oﬀers in order to make the decision to pay for the service.

By looking at the aﬀective and cognitive motivations of consumers in the market, the recurring theme is misinformation. Non users and borrowers may be fueled to not subscribe due to the idea that Netflix lacks new content. However, our primary research showed that 63.7 percent of participants were satisfied with the variety of shows and movies on Netflix. When asked about the importance of keeping up with the latest shows and movies, only 27.8 percent of participants thought it was important. With better circulation of information regarding the nearly $3 billion to be spent on enhancing content (Willcox, 2014), perhaps consumers’ motivations may be changed. With two thirds of the interviewed recommended target audience being either non users or borrowers, Inpulse recommends strongly considering these motivations when seeking to change behaviors toward the brand.

Budget/Contingency Funds The current global marketing budget for Netflix for 2014 is estimated at $600,000,000. Therefore, the total domestic marketing budget is $341,160,000, which is 57 percent of the total global budget. Since 40 percent of total Netflix users fall into the 21

recommended target audience of 18 to 34 year-olds, the total domestic marketing budget for this audience comes down to $136,464,000.

The marketing budget consists of two main expenditures: advertising expenses and expenses for consumer electronics partners and Netflix aďŹ&#x192;liates (Netflix, 2013). Advertising expenses account for 90 percent of the total marketing budget, so this narrows down our recommended advertising budget to $122,817,600. To account for campaigns that are simultaneously being carried out by outside agencies, Inpulse suggest taking 50 percent of this amount for the recommended campaign, a total of $61,408,800. To account for any contingencies, Inpulse suggests setting aside 15 percent of this budget, $9,211,320.

Inpulse recommends the total advertising budget for the suggested 18- to 34-year-old target audience to be $52,197,480.

MEDIA STRATEGY AND TACTICS Media Strategy With decals covering the exteriors of subway cars and outdoor boards in New York City leading up to the second season premiere of Orange Is The New Black, it seems non traditional advertising has worked to Netflixâ&#x20AC;&#x2122;s advantage. That being said, Inpulse recommends the integration of both traditional and non traditional advertising in this campaign.

We recommend continuing this type of ambient non traditional advertising in the future. In terms of more non traditional advertising, Inpulse praises Netflix for their strong social media presence and recommends they continue this, especially since the recommended target audience is millennials ages 18-34.

We at Inpulse recommend a pulsing, year round media schedule with heavier advertising in the months before the season premieres of Netflix original series. However, we recognize that another agency may be handling the campaigns for these series. It is still important to the overarching campaign to abide by this schedule to ensure appropriate allocation of advertising.

Digital YouTube: Based on secondary research of the target audience, 18- to 34-year-olds spend 50 percent more time watching videos online than TV (Jackson, 2013). This has been an overwhelming trend when researching the digital behaviors of this demographic. Our secondary research showed that in the last 30 days, traďŹ&#x192;c to both netflix.com and YouTube reached index numbers well over 150 (Appendix C, Figure 8).

To reach the potential from these YouTube spots, which run about two minutes long, Inpulse suggests using them in multiple media, by cutting the spot into various segments. The original video can be segmented into two 60 second TV spots or four 30 second spots, to be used as TV or YouTube advertisements. This decision is up to 23

Netflix, but following this plan would help optimize the spot created for YouTube by using these smaller outbreak spots on TV as well.

Other Digital: At Inpulse we understand that multiple agencies handle diﬀerent elements of Netflix campaigns throughout the year, as to not interfere with these campaigns we would like to leave recommendations about social media, Internet and mobile to these agencies.

TV While interviewing the recommended target audience, Inpulse found that the more these consumers watch Netflix the more they watch TV. This gives proper reasoning to Inpulse’s recommendation for running segments of the YouTube spot on TV. According to the Parente text, TV spots have a high frequency in specific audiences and are most cost eﬀective to reach a large audience (Parente, 2006). The text also suggests TV spots for building awareness about a product’s features or products that need demonstration (Parente, 2006). With Inpulse’s recommendation to market to the recommended target audience on personalized profiles, these TV spots can illustrate the functions of this feature as well as inform consumers about profiles.

Inpulse’s research shows that our demographic consists of average and light TV users. We do not feel that it is smart to alienate the audience that does watch linear TV, so we recommend airing TV spots on five channels. These channels had the highest index numbers for the recommended target audience.

Magazine Magazine advertising is useful when it comes to advertising products with many features or information about them (Parente, 2006). According to the Parente text, magazine ads are also beneficial when marketing to segmented target audiences (Parente, 2006), which we are recommending. Magazine ads also have a long lifespan and get passed from person to person (Parente, 2006). Since Inpulse is recommending that Netflix explain to consumers the benefits of personalized profiles, it makes sense to use magazines to explain this more complex feature within the Netflix service. Our research shows that the 18- to 34-year-old demographic reads ads in magazines out of curiosity (index 106) and that they enjoy reading ads in magazines (index 104).

Inpulse recommends advertising in the following magazines due to their high index numbers.

Outdoor Outdoor advertising is intended to reach a wide audience and generate conversation and awareness about a brand (Parente, 2006). While this campaign has the recommended target audience of 18- to 34-year-olds it still encompasses a wide range of people. There is no distinction between gender, race or income so outdoor advertising would have the opportunity to get to all diďŹ&#x20AC;erent types of 18- to 34-yearolds.

Outdoor advertising is also “geographically selective” (Parente, 2006). This is a plus for some of Inpulse’s proposed promotional strategy. With the machines that dispense trial promo codes, which will be discussed later in this proposal, outdoor boards will create buzz about this promotion locally. With the machines traveling to diﬀerent events and cities around the United States, outdoor boards will grab consumer’s attention in these areas.

Our secondary research shows that people are perceptive of outdoor ads placed in various locations. We recommend advertising in various public transportation locations, as these have the highest index numbers.

Media Selection When breaking up the budget for the media mix, Inpulse decided to split 95 percent of the budget evenly across all twelve months of the campaign. The other 5 percent was added on to both February and June in order to achieve the increased reach and frequency goals. This left Inpulse with $6, 396, 750 to spend in both February and June, and $4,861,530 to spend every other month.

As far as the actual media mix goes, in all other months besides February and June, Inpulse decided to allot 40 percent of the monthly budget to YouTube advertisements.

Another 30 percent was distributed to outdoor advertisements, while the final 30 percent was allocated evenly to both cable TV and magazines.

The media mix during February and June looked slightly diďŹ&#x20AC;erent. Since we wanted to increase in outdoor advertising during those two months, Inpulse allocated 50 percent of the monthly budget to outdoor advertisements. Only 20 percent of the budget went toward YouTube advertisements. Another 20 percent of the budget was allocated to cable TV and the final 10 percent towards magazines.

The figure below displays Inpulseâ&#x20AC;&#x2122;s media mix budget and the amounts we allocated to each media vehicle. In February and June we allotted $1,279,350 to be spent on YouTube advertising, while $3,198,375 was set aside for outdoor advertising. Another $1,279,350 was put toward cable TV advertising, and finally the last $639,675 for magazines.

The budget was altered for all other months aside from February and June. During these months, Inpulse allotted $1,944,612 to be spent on YouTube advertisements. Another $1,458,459 was set aside for outdoor advertising. Inpulse decided to set aside $729,229.50 for advertising on cable TV, and the same went toward magazine advertising as well.

The figure above only shows the desired amounts that Inpulse wished to spend on advertising in each media vehicle. However, the two figures below shows the desired amounts compared to the actual amounts spent in each media vehicle throughout the campaign. Figure A shows the actual spending during February and June compared to the allotted amounts set by Inpulse. During these two months, only $1,199,867 was spent on YouTube advertising, $1,191,000 spent on cable TV, and $690,540 on magazines. While we were unable to show the amount spent on outdoor advertising in Media Flight Plan, the allocated budget of $3,198,375 can still be spent without exceeding our monthly budget of $6,396,750.

Figure B shows the actual spending during all of the other months besides February and June compared to the allotted amounts set by Inpulse. During these months, $1,839,796 was spent on YouTube advertising, $681,715 on cable TV advertising, and $787,070 on magazines. As previously mentioned, even though the charts in Appendix B do not show any amount being spent on outdoor advertising in Media Flight Plan, the allotted budget of $1,458,459 can still be spent without exceeding our monthly budget of $4,861,530.

Figure A

Figure B

Reach/Frequency Goals Netflix must take reach and frequency into consideration with the use of non traditional advertising especially. We created an Ostrow Model at Inpulse (Appendix C, Figure 5) that gave us the estimated frequency of 3.0. As a result, we set our reach and frequency goals to 3.0 for each month during the 2015 campaign -- except for February and June. The reach and frequency goals increased to 4.0 for those two months due to the third season release of Netflixâ&#x20AC;&#x2122;s original series Orange Is The New Black and House of Cards.

After developing the media mix in Media Flight Plan, our reach and frequency goals for all of the other months besides February and June were exceeded. In these months Inpulse set a frequency of 4.4 and an estimated reach of 73.1. During these months, 320 gross rating points were generated. During the months of February and June we fell short of our frequency goal, with an average frequency of 3.4. Our estimated reach was 71.6, generating 247 gross rating points.

Timing Issues/Scheduling Patter We at Inpulse recommend a pulsing, year round media schedule with heavier advertising in the months during season premieres of Netflix original series. We however, recognize that another agency may be handling the campaigns for these series. It is still important to the overarching campaign to abide by this schedule to ensure appropriate allocation of advertising. That being said, Inpulse would like to clarify that although the advertising will get heavier before these season premieres, the advertising does not directly promote these programs, but rather the Netflix service and profile features in general.

As far as timing issues, in regard to the promotional strategy discussed later, dispensers will be used during certain events that occur seasonally like the Super Bowl. The premieres of Orange Is The New Black and House of Cards also fall into timing when it comes to recommending a media plan for Netflix.

CREATIVE CONCEPTS AND EXECUTIONS Primary Researchâ&#x20AC;&#x2122;s EďŹ&#x20AC;ect on Creative Strategy Our creative strategy revolves around the theme of friends encouraging friends to watch the tv shows and movies they prefer, even though the individual may not like the genres themselves. In our creative executions, Netflix shows the consumer how the service knows her preferences in movies and TV better than her friends do. In our research, we found that 81.3% of participants surveyed are likely to watch shows and movies suggested by friends versus Netflix (Appendix A, Figure 6). Inpulse recommends Netflix try to change this behavior and urge users to take Netflix recommendations. Our research also showed that people like TV commercials that make them laugh (index 97) and that they expect advertising to be entertaining (index 111). This supports our recommendation to keep TV spots and print ads enjoyable and entertaining.

Creative Approach Inpulse recommends that Netflix market on personalization. This should be the surrounding theme of most marketing in this campaign. Aside from continuing advertising for the original shows, it is recommended that Netflix focus on the personalized profiles and the customized experience paying users get from it.

Inpulse recommends focusing on the service provided by the new profile feature. Since the target audience likes the trend of personalization when it comes to products and brands, it is recommended that Netflix bank on their proficiency in this area (Parente, 2006). With profiles that quiz their user on viewing preferences and an algorithm that refines recommendations to the userâ&#x20AC;&#x2122;s likes and dislikes, Netflix excels in personalization. Through the promotion of the profile feature, Netflix can grab users in the recommended target audience by advertising how well the service can cater to them.

At Inpulse we believe that our most malleable recommended target audience is the borrowers. Since these consumers already know the ins and outs of Netflix, we see them as the most marketable recommended target audience. Although the borrowers might not get a Netflix subscription tomorrow, they are more likely to in the near future than a non user.

Although we recommend advertising the personalization advantages paying users get when they subscribe, we do not recommend neglecting the users and non users. Non users still need to be marketed to, but perhaps in a stronger, more comprehensive way. Inpulse recommends that Netflix show these non users a fuller scope of what is provided by Netflix overall, and focus their advertising in a way that makes existing Netflix users feel they are learning something about their service, as well.

Creative Execution Netflix TV Spot

Name: The Perfect Match

Slogan: Always right. Always for you.

Length: 2:00 min

For this creative execution, we want to highlight the eﬀect that personalization has on individual viewers, and how these personalized recommendations can make TV or movie viewing easier and more enjoyable. The spot starts out with a group of friends talking about shows and movies they watch. A man turns to his friend and recommends a movie for her to watch, telling her that it was great and she’ll love it. When she turns on this movie, the spot cuts to her in the setting of the movie, alongside the actors, experiencing a dramatic and scary moment. The girl has no idea what to do and is scared for her life, clearly she does not like being there. This can be comparable to an individual watching a show or movie recommended by a friend and not enjoying it all, wanting to get out of it and watch something else. The spot continues with the girl running into a character “friend” in the movie who tells her to get out of here and sends her to a door that opens up to a thriller, another setting the girl

does not like. The doors act as passages to diﬀerent genres of shows and movies that are available to Netflix users. After the girl circles through many more uncomfortable situations, like a comedy show and a haunted house, she is grabbed by someone. When she turns around it is her “Prince Charming,” rescuing her from another genre or recommendation she doesn’t like and pulling her into her favorite genre, romantic comedy. The spot ends with the woman coming back to present time on her couch, giving this genre or movie a high rating and seeing suggestions pop up in front of her, this time, for movies she will actually like.

Voiceover at the end of the spot: “Sometimes, your friends give you bad suggestions. When it comes to watching TV shows and movies you actually like, rely on the one friend who’s always right. Netflix--always right, always for you.”

Netflix TV Spot

Name: The Perfect Match

Slogan: Always right. Always for you.

Length: 2:00 min

0:02 Friends talking

0:10 Friends talking close up

0:06 Friend suggesting a movie to watch

0:06 Girl starting to watch

0:06

0:06 Girl watches and becomes character

0:06 Girl is scared and does not like situation

0:06 Girl runs into “friend” who tells her where to leave

0:06 Girl is in a diﬀerent genre

0:06 This movie also scares her

0:06 Girl moves on to comedy genre

0:06 Girl moves on to fantasy genre

0:06 Girl moves on to horror genre

0:04 Girl is grabbed by someone

0:12 Girl finds her Prince and likes this genre

0:06 Girl is back in front of TV rating romance genre

0:04

0:08 0:22 V.O.: “Sometimes, your friends give you bad suggestions. When it comes to watching TV shows and movies you actually like, rely on the one friend who’s always right. Netflix - always right, always for you.”

Print Ads We recommend continuing the theme of recommendations from friends versus recommendations from Netflix and its emphasis on personalization throughout each creative execution. While individuals are more likely to watch shows or movies suggested by friends than Netflix (Appendix A, Figure 5), Netflix has the ability to track what they decide to watch on their own and recommend shows and movies similar to the genres they enjoy.

We have provided two print ads that we recommend Netflix use during this campaign. The popular “What People Think I Do” meme has been incorporated in order to familiarize the recommended target audience with the primary message. In print ad one, a young woman sits at her laptop. The meme at the top of the ad compares how her friends think she wants to watch a romantic movie, while what Netflix suggests and what she actually wants to watch are the same: action. In print ad two, a young man sits on the floor holding his tablet. The meme compares how his friends think he would want to watch a superhero, action-packed movie, but what he really wants to watch is a documentary on wildlife, which Netflix suggests. By holding a laptop in one ad, and a tablet in the other, it shows readers Netflix is available across multiple devices. The message conveyed by these advertisements is simple: Who you are, or what you look like, doesn’t define what you want to watch. Sometimes friends don’t get that but Netflix does.

Through the creative we have provided, we emphasize that with Netflix, users will no longer have to rely on their friends because Netflix knows what they want to see.

PROMOTIONAL STRATEGIES Inpulse suggests Netflix implement a promotional trial throughout the campaign. Because Netflix doesnâ&#x20AC;&#x2122;t see users sharing passwords as a big problem (Roettgers, 2013), we encourage them to take advantage of the opportunity to share their own service.

At main sporting events, concerts and festivals in various cities throughout the year, we suggest Netflix place dispensers next to ATMs that will give individuals a card containing a promotional code for a 48-hour Netflix trial.

Those who obtain a card can begin their access whenever they want. When they decide to use it, they can visit netflix.com, type in their promo code at the login screen, and will be prompted to the same quiz Netflix users take in order to create a more personalized profile. In the survey, users will rate which genres they most often watch and which movies or tv shows they have already seen. With that information, Netflix can create a profile for the user that would resemble what his or her own Netflix account would look like.

With this promotion, those who participate will have the opportunity to try out a Netflix account that is catered to them instead of their friends. Because the average Netflix user watches 1.5 hours of content per day (Han, 2014), a 48-hour trial gives participants the opportunity, as well as enough time to experience Netflix as a real user.

CAMPAIGN BENCHMARKING  To ensure the campaign is successful in accomplishing the goals laid out for Netflix, Inpulse recommends checking the status of the campaign at the end of each quarter. More specifically, Inpulse recommends this occur on March 1, 2015 and July 1, 2015 to ensure the campaign is running smoothly following the heavier advertising in February and June. This will be assessed by taking a look at new users and any increase in subscribership. At these points if goals are not being met, Inpulse and Netflix can decide if changes should be made to the campaign as long as they align with the strategy. These benchmarking practices should examine all aspects of the campaign. This means that both short term and long term goals are on track and that all elements of media are working as intended.

The assessment of the campaign at these points can also be done by surveying the target audience. With consumer feedback, Inpulse can help Netflix gauge what eﬀect the campaign is having on the recommended target audience's cognitive and aﬀective behaviors toward the brand.

If it is decided that changes need to be made to accommodate goals, the 15 percent piece of the budget put toward the contingency fund can be used to make adjustments accordingly.

Summary In summary, Inpulse suggests that Netflix bank on the service’s ability to cater to a customization hungry group of consumers. With emphasis on personalized profiles that know what each user wants to watch, Netflix can prove its value to those who currently choose not to pay for the service. Inpulse hypothesizes that with a push in the right direction from Netflix, both borrowers and non users will see what subscribership can do for them and will consider purchasing their own accounts in the near future.

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Appendix A

Figure 1

Figure 2

Figure 3

Figure 4

Figure 5

Figure 6

Appendix B â&#x20AC;¨ Figure 1

Figure 2

Figure 3

Figure 4 (Monthly Detail for ‘All Other Months’)

Figure 5 (Monthly Detail for ‘February and June’)

Figure 6

Appendix C Figure 1

Figure 2

Figure 3

Figure 4

Figure 5

Ostrow Model

Market Factors that AďŹ&#x20AC;ect Frequency

Established Brands (-0.1) New Brands

High Market Share (-0.1) Low Market Share

Dominant Brand in Market (-0.2) Smaller, Less Known Brand

High Brand Loyalty (+0.2) Low Brand Loyalty

Long Purchase Cycle (-0.1) Short Purchase Cycle, High Volume

Product Used Occasionally (+0.1) Product Used Daily

Need To Beat Competition (+0.1)

TOTAL: (+0.1)

Message Factors

Simple Copy (+0.2) Complex Copy

More Unique Copy (-0.1) Less Unique Copy

Continuing Campaign (+0.1) New Copy Campaign

Product Sell Copy (-0.2) Image Type Copy

Single Kind of Message (+0.2) More DiďŹ&#x192;cult Kinds of Messages

To Avoid Wear Out: New Messages (-0.2) Older Messages

Large Advertising Units (-0.1) Small Advertising Units

TOTAL: (-0.1)

Media Factors

Low Clutter in Media Mix (+0.2) High Ad Clutter in Media Mix

Compatible Editorial Environment (-0.1) Non-Compatible Environment

High Media Attentiveness (-0.1) Low Media Attentiveness

Continuity Scheduling (+0.2) Pulsed or Flighted Campaign

Limited Media Mix (+0.2) Many Media Used

Opportunities for Repetition (-0.2) Fewer Opportunities

TOTAL: (0)

Total Frequency = 3.0

Figure 6

4321 Mission Street

San Francisco, CA 94105

P: (415) 692-4428

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www.inpulse.com

Netflix: Questionnaire

Hello, my name is

and I am contacting you as a part of a research project

for a COMM 424 Advertising Campaigns class at Penn State. You will be asked to answer a series of questions that aim to understand media and Netflix use. Only the researchers and course instructor may see the data, ensuring confidentiality of responses. Your participation is voluntary and you may withdraw from this research at any time or skip any question you do not wish to answer. This survey will take approximately 5 minutes to complete.

General Survey Questions

Before we begin, Penn State Universityâ&#x20AC;&#x2122;s standards of research ethics require participants to be at least 18 years or older. Are you 18 years or older?

YES

If NO: Thank you for your time but unfortunately you do need meet the

qualifications in order for us to interview you today!

To begin, we would like to ask you a few questions about your media and online streaming habits.

On a scale of 1-5 (1 being very unlikely and 5 being very likely) please rate how likely you are to use each medium for television and movie viewing. (interval)

i. i.

Cable

ii. OnDemand/DVR 1

iii. Online streaming 1

iv. DVD/VCR

How many hours per week do you spend watching TV or movies? (ratio)

How do you decide what you want to watch? (nominal)

________________________________________________________________________ _______

Have you ever watched TV through an online-streaming service? (nominal)

YES

If NO: Skip to question 6.

If YES: On a scale of 1 to 5 (1 being very unlikely and 5 being very likely) please rate how likely you are to use the following services: (interval)

Hulu

ii. Amazon

iii. Netflix

iv. HBOGo

v. AppleTV

vi. â&#x20AC;&#x153;Freeâ&#x20AC;? streaming sites

At the end of the general survey, before demographics, we will ask if they are a Netflix user, a Netflix borrower, or a Non-Netflix user. Depending on their answers, we will have specific follow-up questions.

■

Netflix Users are those who use Netflix through their own account or under a profile in a family account.

■

Netflix Borrowers are defined as those who do not pay for their own account. They use the service, but through a friend’s account.

Non-Netflix Users include those who online stream but through diﬀerent services including HBOGo, HULU, Amazon, etc. This category also includes individuals who do not watch movies or TV series through online streaming.

Now, we would like to find out more about your viewing habits pertaining to specific online streaming services.

Do you use Netflix? (nominal)

YES

NO (proceed to question 31)

If YES: Do you…. (nominal)

use Netflix under your own account, (proceed to question 8)

ii.

under your family’s account, (proceed to question 9)

iii.

or do you borrow passwords for access to friends’/other’s accounts? (proceed to question 22)

Questions for Netflix Users:

Do you pay for your own Netflix account? (nominal)

YES

Do you have a profile under your or your familyâ&#x20AC;&#x2122;s account? (nominal)

YES

If YES:

How many immediate family members have profiles on the

account? (nominal)

If NO: Did you know you have the ability to create your own profile within a Netflix account? (nominal)

YES

NO (If no, proceed to question 13)

If YES: What has kept you from creating your own profile? (nominal)

______________________________________________________________

On a scale of 1-5 (1 being very unlikely and 5 being very likely) please rate how likely you are to use Netflix for the following categories: (interval)

TV Series

ii. Netflix original programming

iii. Movies

iv. Documentaries i.

How many hours per week do you typically spend using Netflix? (ratio)

On a scale of 1-5 (1 being very unimportant and 5 being very important) how important is it for you to keep up with the latest shows and movies? (interval)

How helpful has Netflix been in keeping up with those shows and movies? (nominal)

________________________________________________________________________ _______

On a scale of 1-5 (1 being very unsatisfied and 5 being very satisfied) how satisfied are you with the variety of shows and movies on Netflix? (interval)

Please explain your answer to question 17. (nominal)

________________________________________________________________________ _______

On scale of 1-5 (1 being very unlikely, 5 being very likely) how likely are you to watch shows/movies suggested by your friends? (interval)

VU U

On scale of 1-5 (1 being very unlikely, 5 being very likely) how likely are you to watch shows/movies suggested by Netflix? (interval)

VU U

If they don’t pay for their own Netflix account: On a scale of 1-5 (1 being very unlikely and 5 being very likely) how likely would you be to pay for your own Netflix account if you had to? (interval)

VU U

Proceed to question 37.

Questions for Netflix Borrowers:

Do you have your own profile on this “borrowed” account? (nominal)

YES

Have you ever felt the urge to create your own Netflix account after “borrowing” someone else’s? (nominal)

YES

If YES: What made you want to create your own account? (nominal)

__________________________________________________________________ _______

What stopped you from creating your own account? (nominal)

__________________________________________________________________ _______

On a scale of 1-5 (1 being very unimportant and 5 being very important) how important is for you to keep up with the latest shows and movies? (interval)

How helpful has Netflix been in keeping up with those shows and movies? (nominal)

________________________________________________________________________ _______

ASK QUESTION 13

On scale of 1-5 (1 being very unlikely and 5 being very likely) how likely are you to watch shows and movies suggested by your friends? (interval)

VU U i.

On scale of 1-5 (1 being very unlikely and 5 being very likely) how likely are you to watch shows and movies suggested by Netflix? (interval)

VU U

On a scale of 1-5 (1 being the very unlikely and 5 being very likely) how likely are you to sign up for your own Netflix account after today’s survey? (interval)

VU U

ASK QUESTION 33

Proceed to question 37.

Questions for Non-Netflix Users:

Do you stream videos online? (nominal)

YES

Have you experienced Netflix at a friend or family member’s house? (nominal)

YES

On a scale of 1-5 (1 being the lowest and 5 being the highest) please rate how each factor has aﬀected your decision to NOT sign up for a Netflix account. (interval)

a. PRICE

b .CONTENT

c. CONVENIENCE 1

d. OVERALL QUALITY

e. NEED MORE INFO

On a scale of 1-5 (1 being very unimportant and 5 being very important) how important is for you to keep up with the latest shows and movies? (interval)

Without a Netflix account, how do you tend to feel when conversations about those

shows arise? (nominal)

________________________________________________________________________ ______

________________________________________________________________________ _______

On a scale of 1-5 (1 being very unlikely and 5 being very likely) how likely are you to sign up for your own Netflix account after todayâ&#x20AC;&#x2122;s survey? (interval)

VU U

Lastly, we just need to ask a few demographics questions.

How old are you? (interval)

Are you currently employed? (nominal)

YES

Are you a student? (nominal)

YES

Thank you for your participation. Should you have any questions regarding the questionnaire or your rights as a participant, please contact the course instructor: Dr. Susan Strohm at (814) 863-0535.

Figure 7

CREATIVE BRIEF

Cultural Fuel

Watching TV is not something that is vanishing, but the way in which consumers do so is changing drastically. Linear TV watching, which describes watching programmed TV that is provided either through cable or network shows, is becoming less popular with certain demographics. This traditional method of TV watching comes with commercials and less flexibility in choosing what to watch and when to watch it.

With online streaming through services like Netflix and Hulu consumers have the freedom to watch what they want when they want to watch it. If a consumer wants to watch an entire season of a show in a week they have the ability to do so. If they want to watch a movie that is not shown on TV they can do this as well.

Competition

Netflix is competing against free, lower price, or seemingly free services. Since Amazon Instant Video is a service that comes with a membership to Amazon Prime it seems free as does HBO GO with your paid cable provider subscription. These two services seem free since consumers do not pay for them directly out of pocket, but instead get them through paying for another service. Hulu oďŹ&#x20AC;ers non members access to some of their content and Hulu Plus comes at a cheaper price since Netflixâ&#x20AC;&#x2122;s price increase. Then there is also the threat of illegal (pirated) streaming sites. These sites give users access to practically any movie or TV show they could want to watch all while not charging them a penny.

Communication Problem

Consumers in the 18-to 34-year-old target audience are more likely to be sharing accounts with their family or friends. Many of these consumers see separate profiles as a way to hide what they are watching, but they do not care enough about this privacy to create their own profile. Profiles are also useful to personalize recommendations for

their user. It is important that the target audience see profiles this way rather than as solely a privacy mechanism.

Bottom Line:

â&#x2013; Focus of Sale - To convince 18- to 34-year-old consumers in the target audience that Netflix can be personalized to their preferences. With individual profiles, users should want their own profile and eventually their own Netflix account to gain access to personalized recommendations.

â&#x2013; Support - This campaign does not serve to push 18- to 34-year-olds to get a Netflix account immediately, but rather to train them on how personalized and catered to the individual the service can be. The hope is that the recommended target audience will develop a taste for Netflix by getting a personalized profile and eventually their own account.

â&#x2013; Tone and Manner - Based on research of the recommended target audience, it is clear that they favor brands that interact with them and they respond well to humor. In addition to comedy, 18- to 34-year-olds enjoy sentimental articles and social media that make them feel exclusive.

Figure 8