This is your report analysing Netflix using porter's five forces model: 
Introduction
This report conducts an in-depth analysis of Netflix, one of the top streaming entertainment services worldwide. It will provide an overview of the streaming entertainment industry and the company before using Porter's Five Forces Model, a widely used framework that helps in analysing the industry structure and competitive standing of a company, to understand the competitive environment in which Netflix operates. Finally, key findings are summarised and recommendations for Netflix to stay competitive in the industry are made.
1.1. The Industry
The media entertainment streaming industry is growing and is intensely competitive. The market size is expected to reach USD 223.98 billion by 2028, expanding at a CAGR of 21.0% (BusinessWire, 2021). It is  presented in multiple forms, each capture a segment of the streaming industry: subscription video on demand (SVOD), ad-supported video on demand (AVOD), transaction-based video on demand (TVOD), premium video on demand (PVOD), hybrid video on demand services, Virtual Multichannel Video Programming Distributors (vMVPD), and piracy-based models. The key market drivers are observed mostly in North America and Asia Pacific regions and include: rapid digitalization, increasing use of mobiles and tablets, the use of advent technology such as artificial intelligence, blockchain, all of which boost the demand for on-demand streaming services. (BusinessWire, 2021).
1.2. The Company
Netflix, Inc. (Netflix) is a leading global media entertainment company known for its subscription streaming services on demand. Founded in 1997 in California offering DVD-by-mail service, Netflix began streaming content in 2007 and has since expanded to offer a wide range of both licensed television shows, movies, and original content. Netflix's business model is based on a monthly subscription fee, with different pricing tiers based on the number of screens and video quality. The company also invests heavily in technology, using algorithms to recommend content to users and developing its own content delivery network to ensure smooth streaming. By 2023, it has 231 million paid memberships in over 190 countries offering a wide range of TV series, films and games across a wide variety of genres and languages (Netflix Inc., 2023)
Porter’s Five Forces Model Analysis
2.1. Threats of new entrants
The threat of new entrants for Netflix is low since the video streaming industry has high barriers to entry due to the need for costly technology and software, a skilled workforce, and a diverse library of digital content. Companies with existing streaming technology, strong financial base and media rights, such as Disney, have an advantage over new entrants (Forristal, 2023). Producing original content is the biggest barrier to entry, making it nearly impossible for new companies to enter successfully. 
Netflix was the first company to enter and succeed in the streaming industry before many other large producers with brand loyalty such as Disney, Hulu, and HBO. These big players even succeed in taking advantage of network effects by establishing partnerships with a wide range of digital devices and local studios to expand their coverage (Netflix has 141 partners according to Partnerbase). With so much competition and established talent in the industry, there is little room for new entrants. On the other hand, some countries like China (Advanced Television, 2014) even place quotas on foreign content volume, which makes it even more challenging for new companies to enter the streaming industry.
2.2. Power of suppliers
Suppliers are having increasing bargaining power in the SVOD market because there are many competitors and less content licensing available by third parties (McFadden, 2020). Netflix used to be the only streaming service available for several years, which allowed it to have significant power over their suppliers. It had the selection over the content they wanted to stream, which led to them acquiring big name titles like the sitcom “Friends”, and a variety of Disney films such as “Moana”. Netflix is investing a lot more in producing original content than its competitors but it still relies on licensing deals for content (Figure 5). Major media companies like Disney and NBC are taking their content off Netflix to compete with their own SVOD platforms. This caused Netflix to lose a significant amount of content and bargaining power to suppliers. 

2.3. Power of buyers
Users of media streaming platforms are gaining more bargaining power than ever. The streaming industry is characterised by similarly-priced subscription plans (Figure 1) and allows users to cancel at any time, making it not very price-sensitive. With more competitors such as Disney+, Hulu, Amazon Prime, entering the market, users are presented with a wider variety of content, making it easy for them to switch between platforms to find one that meets their preferences and budget. This has resulted in a greater demand for diversification and personalisation of content (Nielsen, 2021) and a higher expectation for quality and value. While Netflix still remains a dominant player in the media streaming  industry, the increasing power of buyers has forced the company to constantly improve their content offerings, pricing and user experience to retain and attract users. 
2.4. Threats of substitute products
The threat of substitutes in the entertainment industry is high. Netflix (2022) stated that their competitors include “linear networks, pay-per-view content, DVD watching, other internet networks, video gaming, web browsing, magazine reading, video piracy, and much more.”  
While video gaming, web browsing, magazine reading are all forms of entertainment, they do not pose a direct threat to substitute Netflix but rather are complementary recreational activities. The two once popular means of home entertainment, traditional television networks and DVD watching, are rapidly being replaced by Netflix’s on-demand streaming service in recent years. In the U.S., the average time spent watching TV of an American has declined by over 6% in 2020 (Figure 2). Hence, amidst being Netflix’s competitors, the threat of substitution by these forms of entertainment are low.
However, in the media streaming industry, Netflix faces fierce threats of substitution from other segments such as Youtube (AVOD), Apple’s Itunes (TVOD) or Hulu Live TV (vMVPD) as well as within the SVOD segment. Pirated content, identified as Netflix’s biggest threat (Netflix Inc., 2022), also saw a rise of 18% in website visits between 2021 and 2022 (Aquilina, 2023). 

2.5. Rivalry among existing competitors
The competitive rivalry for Netflix is exceptionally high. Each competitor such as Amazon Video, Disney+, Hulu, and HBO Max has its own advantage and unique features that attract customers. Despite only being introduced in November 2019, by 2022, Disney+ has accumulated almost 162 million subscribers (The Walt Disney Company, 2023). Especially after acquiring Marvel studio, Pixar and Star Wars movies, its content became richer and brought more customers to choose Disney over other platforms. In addition, the low switching cost enables customers to end their subscription deliberately at their will. As competition intensifies, Netflix lost almost a million subscribers between April and July 2022 (Figure 3), its first since 2011. 
Netflix is still benefiting from its early entrance as COVID-19 has reduced production of Netflix's original content, yet they were still better prepared than competitors to deal with the pandemic with their already-built-up supply of content. Important enough, to remain competitive in the streaming industry, Netflix must produce quality content and offer more to its current customer to rentent and acquire new subscribers.
Recommendations
3.1. Differentiation and Localization
To remain competitive, Netflix must continue to offer a wide range of high-quality content. A strategy for expanding markets by producing content for non-English-speaking markets with high broadband penetration, as well as mobile-focused countries like India, Asia, and Africa should be considered. Adding live sports and news would allow it to compete with conglomerates like Viacom/CBS. Netflix should also leverage its international expertise to expand into new countries before its competitors. While the price concern prevails among customers (Figure 4), a break-down of pricing for different economic situations is worth considering to make Netflix’s services more accessible to a wider customer base. It should also monitor its competitors' pricing strategies and consider making changes to its own pricing strategy.
3.2. Premium customer experience and innovation
Netflix should remain committed to on-demand commercial-free viewing, avoiding ads to enhance customer experience. To stay relevant on the market, Netflix could consider joining collaboration with other complementary businesses to bring AR/VR technology into the video streaming. While the tech giants such as Apple, Roblox, Epic Games have all announced their commencement in Metaverse (TechGig, 2022), it is crucial that Netflix not fall behind the race and lose its advantage as the market leader. Finally, it should continue to explore technological resources and partnerships with international authorities to reduce piracy. As the streaming industry matures, Netflix must keep innovating and be willing to pivot its business model to find new blue ocean strategies.


Conclusion
The SVOD industry that Netflix currently serves is in the growth phase, with rapidly evolving technology (Alexander, 2020). The market is also highly fragmented with the presence of significant global competitors and smaller domestic-based contenders. Our Porter Five Forces analysis reveals a fierce competition ongoing, while only a low threat comes from new entrants due to the high capital requirement for content acquisition and distribution. With new big titles starting to provide their own protected original content and a wide variety of substitutes, Netflix is losing their power to the suppliers and buyers as they have more selections with low switching cost.
Facing both threats and opportunities in the SVOD market, Netflix should leverage its competitive advantages as an innovative first-mover with recognized brand equity to remain its lead in the market. This may include providing a diverse choice of high-quality content and making necessary modifications to the pricing strategy to stay competitive. In addition, an effort to stay committed to enhancing customer experience and customising services for local users is of great importance. Lastly, it should look into technology resources and collaboration with foreign agencies to combat piracy as one of its biggest substitute threats.

And this is the feedback received:
- The purpose is stated clearly in the beginning with comprehensive coverage of the selected company. Good structure, spelling, grammar with logical arguments and application of concepts. Some relevant recommendations with references are included. Overall, good work!
- In Power of Suppliers analysis: What about the exclusive content produced by Netflix? Does it  decrease the power of suppliers?
- In threat of substitute products section: Are there any particular age groups that still watch satellite TV over Netflix? Worth considering as a threat of substitute.

Write a reflective paper on your experience applying the framework, its strengths and weaknesses when use in this particular analysis, how the feedback received has helped you better understand the framework and how to apply them. The structure of your main argument should be as followed:
- Provide a context for your reflection
- Explain your viewpoint or preconceptions
- Critically analyse your own thoughts about how you have experience things
- Explore how you dealt with various situations, including how you would do things differently in the future.