After having a successful 2013, Netflix is looking for another blockbuster year ahead, and contains already commenced taking bold measures to guarantee even higher revenues in 2014. The 1st move ended up being to reward the CEO, Reed Hastings which has a massive 50% increment on his salary after Netflix witnessed a 300% improvement in their stock prices from $95.21 in January 2013 to $368.17 on New Year eve’s closing time. The online world movie streaming giant also reached 31.1 million subscribers in the US alone in 2012.
Mr. Hastings will now make $6 million in 2014; 50% in cash and 50% in stocks, accompanied by the primary Content Officer Ted Sarandos, who will make $ 4.8 million ($2.8 million in cash and $ 2 million in stocks). Mr. Sarandos also played a crucial role in this success, by strategizing the premium programming service.
Next huge success, Netflix’s CEO also announced the retraction with the «poison pill» policy which was unveiled in protect this company from hostile takeovers investors. This protective move was initiated after Carl Icahn, a billionaire, bought huge stakes in the company. However, since stock prices this coming year went sky rocketing, the corporation feels it truly is fishing in safe waters and there is no threat of your takeover.
Way back in 2011, the business had raised its prices to as much as 60%, but this measure backfired. The registered subscriptions went down by 800,000 and also the stock prices took a nose dive. However, the organization learned from the mistakes and as opposed to raising prices, they also have started testing new packages as well as other pricing plans. This plan seems to have worked brilliantly for Netflix as it is evident coming from the soaring stock prices.
Under its different pricing plans, this company now allows just one account to become shared by approximately 4 users simultaneously for just $11.99, i.e. 4 users can watch different movies about the 4 different screens simultaneously; 3 simultaneous viewings for $9.99 (on trial); 2 simultaneous viewings for $7.99; and $6.99 for a single screen viewing. This ingenious pricing plan policy has won Netflix an overall subscriber’s pool of 40 million from the Americas, and Europe combined. When asked concerning the 3 screen trial plan, a spokesperson for Netflix responded: «At Netflix we continuously test new thing. Ultimately we turn to offer options that will make our members happier, measured by their application of our service.»
The success has also been partly driven by the two blockbuster series «House of Cards» and «Orange would be the New Black», which might be original Netflix production and secured numerous views in the US. The enormous volume of revenue and subscribers generated by these two series has opened new avenues for Netflix within the production business at the same time.
The achievements of Netflix’s enterprise model raises two questions: How long before competitors sprung up and adopt Netflix’s model and what will Netflix do in order to prevent these competitors from taking away its market share?