The company also provides a free trial period as a

Netflix promotes services through various marketing programs which include digital and TV advertising.
The company also provides a free-trial period as a promotional offer to attract new customers. Free-trial
membership is offered only to new and certain rejoining members. In addition, Netflix continues to
improve its customer experience by expanding its streaming content, improving user interfaces, as well as
expanding its streaming service to more Internet-connected devices. These efforts enable the company to
drive additional subscriber growth. As of December 31, 2017, the company’s net global streaming
membership additions reached 23.8 million as compared to 19 million a year ago. In addition, Netflix’s
global streaming memberships reached 117.6 million in FY2017 as compared to 93.8 million in previous
fiscal. Subscriber growth leads to word-of-mouth promotion for Netflix's services, which, in turn, leads to
more new subscribers. The increase in total number of subscribers, as well as net subscriber additions
leads to increased revenues for the company.
Strong revenue growth
Netflix reported strong revenue growth in FY2017. The company’s revenue increased by 32.4% to

Netflix, Inc.
SWOT Analysis
Netflix, Inc.
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US$11,692.7 million in FY2017 from US$8,830.7 million in FY2016. The growth in revenue was primarily
driven by strong growth in the average number of paid streaming memberships. Majority of this growth
was due to increase in its international memberships. The company's domestic streaming segment
recorded revenues of US$6153.0 million, an increase of 21.2% as compared to US$5,077.3 million in
FY2016. The increase in this segment was due to a 10% growth in the average number of paid
memberships and an 11% increase in average monthly revenue per paying membership. The
international streaming segment recorded revenues of US$5,089.2 million in FY2017, an increase of
58.5% as compared to US$3,211.1 million in FY2016. The increase in this segment was attributable to
the 43% growth in the average number of paid international memberships an 11% increase in average
monthly revenue per paying membership. Strong growth in revenue enhances the company’s ability to
provide higher returns to its shareholders and also increases its ability to allocate funds for future growth
and expansion initiatives.
Strong business model
Netflix is one of the world’s leading Internet television networks with over 117 million streaming members
in over 190 countries. The company operates an internet-based subscription model which has done away
with many disadvantages experienced in traditional outlets. The number of customers opting for Netflix
over the traditional model is on the rise as it offers greater convenience. Netflix also enjoys additional
competitive advantages. The company provides a number of DVD titles which is not possible for outlets
as they cannot stock such a large number of DVDs. Outlets devote larger space for newer releases and
alternatively Netflix can offer old and new titles simultaneously without incurring additional costs.