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\nBusiness Case
\n25624 Financial Metrics for Decision Making
\nSpring session 2022
\nPage 2 of 6
\nGeneral information and instructions
\n\u2022 This business case accounts for 40% of your final grade.
\n\u2022 You must complete this assignment on an individual basis.
\n\u2022 Deadline: Friday 14th October 2022, 11.59pm AEST (Sydney time)
\n\u2022 You need to submit via Canvas:
\no A written report
\n\u25aa .pdf format only
\n\u25aa The report should answer each of the questions
\no An Excel spreadsheet
\n\u25aa .xlsx format only
\n\u25aa The spreadsheet must contain all calculations you perform in the Revenue
\nworksheet.
\n\u25aa Aim to structure and format your Excel solution in the most efficient way
\npossible and use financial modelling best practices.
\n\u2022 This task includes a milestone assessment component that evaluates academic English
\nlanguage proficiency. You may be guided to further language support after the completion
\nof this subject if your results in this milestone task indicate you need more help with your
\nlanguage skills.
\n\u2022 All assignment-related queries must be posted on the Canvas discussion board.
\nE-mail queries related to the assignment will not be entertained.
\nFrom prior experience, technical difficulties often can be traced back to students trying to
\nupload their work a few minutes prior to the deadline. Tip: do not wait until 11.55pm on
\n14th Oct to submit your work via Canvas. Late submissions will receive zero credit unless a
\nspecial consideration with valid reasons and documentation is filed.
\nGrading
\n\u2022 Both components (the written report and the Excel spreadsheet) will be graded.
\n\u2022 The written report will be marked based on the
\n\u2022 The Excel spreadsheet will be marked based on the efficiency and clarity with which
\nsolutions are produced.
\n\u2022 Late submissions will receive zero credit unless a special consideration with valid rea- sons
\nand documentation is filed.
\nData
\n\u2022 In the Assignment page on Canvas, you will find the workbook Netflix Revenue Model.xlsx.
\nThe workbook contains quarterly revenue and subscriptions data from September 2018 to
\nJune 2022.
\n\u2022 Perform your calculations based on the data in these spreadsheets.
\n\u2022 Search for additional data as required.
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\nNetflix\u2019s Latest Pivot
\nNetflix success is largely attributed to the company\u2019s ability to pivot their business model. The first
\npivot was when the company shifted their DVD home delivery service to becoming the leading online
\nstreaming platform. More recently, the second pivot was in response to the inherent risk of being a
\ncontent distribution platform: content producers could refuse to deliver their content via Netflix
\n(Disney, Paramount, etc.). Netflix response was to become a content creation business themselves1
\n.
\nBoth pivots were successfully landed, providing Netflix with a sustained increase in subscriptions. The
\ncompany\u2019s reflexes are now being put to the test once again, this time as a more mature business.
\nIn the first quarter of 2022, Netflix lost subscribers for the first time in 10 years. The drop came after
\nthe growth experienced throughout the pandemic, gaining millions of users per quarter through 2021.
\nThe decline in number of subscribers adds to the trouble the company faces because of the large
\nnumber of households sharing their accounts with families and friends. In response, Netflix began
\nexperimenting with a feature that monitors whether someone accesses an account from outside the
\nhome and offers the ability to raise the price by adding ‘sub-accounts’ for other people.
\nDuring the Q1 2022 earnings call, Netflix\u2019s management unveiled that they were considering rolling
\nout an ad-supported tier to re-ignite subscription growth – especially in UCAN (USA and Canada). The
\nmarket feels much more penetrated given the COVID pulled-forward bump2
\n. Instead of paying the full
\nsubscription, Netflix will offer the possibility of paying less in exchange for watching ads, thus
\n1 Misra, A. 2020. Netflix \u2013 Constantly Pivoting its Business Model to Success. Sep 13, 2020.<\/p>\n
Netflix \u2013 Constantly Pivoting its Business Model to Success<\/a><\/p><\/blockquote>\n