CONTENT

Private and Confidential

• EXECUTIVE SUMMARY

• MARKETING

• ATL & BTL

• Awareness

• Segmentation / target marketing

• Communication

• Branding / Positioning

• Social Media

• 3rd party promotions and Events

• Agency Management

• GLOBAL STRATEGY V/S CULTURAL ZING THE GLOBAL STRATEGY

• RECOMMENDATIONS

EXECUTIVE SUMMARY

With a strong focus on technology and IP ownership available in 190 countries, up from 60 a year earlier, 42% of the current subscribers are

Non US(*). In the US, brand awareness and consumer loyalty is high. Internal IP is becoming an asset, performing as a key component of

the acquisition and retention strategy. (*)Fortune.6/2016

Netflix entered Japan less than 10 months. Creating local IP with Fuji (CX) TV, Yoshimoto and other third parties. But the awareness is low,

“the point of differentiation” has not been communicated. When the brand is recognized as a “lifestyle tech brand” by the “Critical Mass”,

Netflix will secure strong upsides from Japan. How does Netflix Japan hit “Critical Mass”? Communication? Segmentation? What does

Netflix Japan need to do to secure strong retention rate?

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MARKETING

ATL & BTL

Social Media

3rd Party Promotions and Events

Agency Management

Communication

Segmentation / Target Marketing

Awareness

Branding / Positioning

MARKETING

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ATL & BTL

ATL

ATL (Above the line) strategy has

a focus on acquiring new

subscribers

BTL

BTL (Below the line) strategy has

a focus on retaining and

generating additional revenue

from existing subscribers

BTL

ATL

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AWARENESS

• Amazon launched the streaming service in Japan, the streaming market will

continue to be competitive. As the market is becoming saturated, it is

becoming more difficult to reach and communicate to potential consumers

• Increase brand exposure utilizing multiple channels including events, 3rd

party promotions, OOH, PR, Celebs, TV, Cinema and social media

• Internal IP, launch of Terrace House and Hibana, Netflix continues to increase

awareness among the M1 and F1 segment.

• Difficult to reach critical mass with a mobile focused awareness campaigns?

• In 2015, more than 8MM feature phones were shipped and 43% of mobile

billings came from feature phone contracts (*)

• Lack of digital inventory and transparency challenges with ad networks

• Avoid end of the month / beginning of the month media buy challenges

• Yahoo, Google Play, YouTube, Amazon, Hulu, Rakuten, Expedia, Indeed,

Agoda, strong tech companies are heavy on TV

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SEGMENTATION AND TARGET MARKETING

MULTIPLE SEGMENTS MARKET STRATEGIES DATA ANALYTICS

Multiple segments, Determine

“who is our consumer?” What

kind of content do they like?

Hobby? Likes western films? Do

they play & pay for games?

Housewives purchasing for

multi-generation? Credit card

holders / Non Credit card

holders? Seeking a functional

experience during the commute

(i.e. Lifestyle). Consumer who

drop off after 30 days? ETC

When executing target market

strategies, the digital platform

performs well

Work closely with Data analytics,

combine external data with

internal data

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COMMUNICATION

• Develop a communication strategy for “Critical Mass” and at the same time a

develop a communication strategy for each segment

• In addition to Japan IP, Netflix J also needs to communicate the brand’s

“Point of Differentiation”

• Function Upsides (i.e. Lifestyle)

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BRANDING / POSITIONING

• The global branding and

positioning strategy should be

implemented at each local market

to maintain the core DNA of the

brand. At the same time,

“culturalizing” parts of the global

strategy is highly recommended to

ensure relevancy

• “Product Function” stimulate

consumer interest and demand in

Japan. Offline viewing? Choice of

device?

• “Critical Mass” does not

understand Silicon Valley, nor does

it care. Position as a “Life style

tech” brand

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SOCIAL MEDIA

The best channel to

execute BTL programs to

increase retention rate. The

ability to communicate

directly with subscriber

Work with key Influencers

and drive organic growth.

Avoid Influencers who are

(were) Super stars status as

they don’t drive growth.

Regional Influencers?

The opportunity to

communicate new release

updates and promotions

with existing Users

Develop Celeb programs

and target market

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3rd PARTY PROMOTIONS AND EVENTS

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Drive B2C and

B2B revenue by

working with 3rd

parties with high

traffic or a large

data base

Summer and

Holiday season,

digital revenue at

the end of the

year / start of the

year is strong

3rd party

promotion and

events will help

Netflix reach

critical mass and

increase brand

awareness.

Corporate

programs

Online - Offline

upsides

Promotion with

telcos (i.e. single

billing system)

doesn’t have a

strong impact 01

02

03

04

05

06

AGENCY MANAGEMENT

Private and Confidential

Implement a merit base system, developing a

strong partnership to ensure transparency

improvements

The need to drive new business without

Dentsu or Hakuhodo. Nourish and maximize

relationship with TV stations, talent agencies,

Publisher and other 3rd parties

The Dentsu and Hakuhodo myth. Apple and

Google have exclusive media buy agreement

with Hakuhodo. Utilizing multiple agency

creates competition, brings different ideas and

allows Netflix to hedge risks

GLOBAL STRATEGY V/S LOCALIZING THE GLOBAL STRATEGY

Private and Confidential

Share best practices with HQ & regional offices.

Media buy, creative, communication works best

when localized.

Lack of digital inventory, low cable penetration in

Japan, and the US with over 50MM subscriber,

the US & Japan business differs. Similar to the US,

Japan is spending over 70% of the marketing

budget on digital, the need to modify the budget

allocation until Netflix reaches critical mass

Celeb driven events creates PR and promotional

opportunities. Ensure utilization of an “A” or “B”

list Japan talent with sufficient awareness. Reduce

cost by avoiding bringing US Celebs unless the

Celeb has global recognition

A/B testing

the website Localized websites for

different countries /

region is recommended

The current website

design is somewhat

new to Japanese

consumers, some may

encounter navigation

challenges, is it user

friendly?

Rankings & reviews

section at Netflix.co.jp

will increase traffic and

drive subscription

growth

RECOMMENDATIONS

Private and Confidential

Allocate additional funds to offline

projects; Increase Monthly TV GRP /

added value. Most added value

project will act as a PR project.

Integrated strategy. Online and

offline promotion.

Signage at summer concerts,

sponsorship at events, OOH.

B2B promotion to increase

awareness and drive subscription

growth.

PR across all channels with a focus

on TV.

Product placement in TV shows.

What kind of content do they like?

Hobby? Likes western films? Do they

play & pay for games? Purchasing for

multi-generation? Credit card holders /

Non Credit card holders? Seeking a

functional experience during the

commute (i.e. Lifestyle). Do they already

have a subscription, who & why?

Extend existing telco promotion to

Financial, Credit card and Lifestyle /

entertainment brands, retailers such

as Lawson /7MM foot traffic / day.

Giveaway OEM product / 75% less

than the current acquisition cost.

Negotiate with promotional partner to

increase brand visibility.

Utilize Pre paid card for 3rd party

promotional projects to drive

subscription.

Synergy with subscribers and Japan

IP, “Become an extra in our show next

show”.

Critical Mass & Offline Target Marketing & Digital.

Continue to develop new target markets

Promotion

ATL communication:

The need to communicate “The Point

of Differentiation”.

What is the messaging to the “Critical

Mass” and “Target Market?”.

“Large portfolio. One stop at Netflix

gives you drama, action,

documentary”.

“One month trial period”.

Function and Life style message.

ATL & BTL Communication:

“It works everywhere, watch on your

smartphone, tablet, PC or even your

TV”. “Japan IP”.

“Always adding new Western IP &

Japan IP”.

“Watch Netflix during your commute”.

“Get Netflix for you and the family”.

Primary channel to communicate

directly with followers and

subscribers, drive retention rate and

secure viral an opportunities.

Netflix J Ambassador / Celeb with a

large digital following to increase

communication among subscribers

and increase brand exposure.

Subscriber engagement = Viral

upsides.

Communicate new release. Show

content “teaser footage” / “behind the

scenes” and create a sense of

exclusivity to social media followers

and subscribers.

Don’t recommend working

exclusively with Dentsu or Hakuhodo.

Split up assignments and secure

strong ROI driven agreements.

Northern European creative works

well in Japan.

Apple and Amazon have an exclusive

media buy agreement with

Hakuhodo.

RECOMMENDATIONS

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Communication Social Media Agency Management

RECOMMENDATIONS

Private and Confidential

Upon Japan market entry, many western companies implement strategies /

concepts that worked well in the US. Sharing best practice is key to a successful

global operation but too much duplication / adaptation can lead to poor results.

Netflix Japan launch event. Better if Netflix hired / paid for Japanese Celeb

attendance = TV show camera = PR.

B class US Celebs at the Japan launch event did not increase PR coverage.

Avoid in the future.

Spokesperson / Japanese / Celeb to pitch brand as a lifestyle tech brand?

Decrease US / Western image.

Digital & Non digital allocation. US & Japan are two different business, inventory

challenges and ad network transparency challenges in Japan.

Global Strategy v/s Localized Global Strategy