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case number: 9-201-037. Netflix.com, Inc case - Ha...

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case number: 9-201-037. Netflix.com, Inc case - Harvard. How should we calculate the number of new subscribers for this case? Please contact me if you do not have the case.,Given the subscription nature of the NetFlix business model along with its limited and varied operating history, a subscriber model is the most logical method of forecasting future NetFlix cash flows. With this methodology, you are expected to determine the expected cash flows associated with the tenure of an individual subscriber, produce a forecast of the number of new subscribers that the company expects to acquire, aggregate the expected cash flows associated with the projected new subscribers, and account for the company?s fixed expenses. Please refer to the document (in the syllabus), ?Guidelines for all case write-ups? for specific instructions about the format of your written report. Your analysis of the ?NetFlix.com, Inc. Case Analysis? case should include well-articulated answers to the following questions: 1. What is NetFlix?s long-run objective? How does NetFlix plan to achieve its long-run objective? How would you assess NetFlix?s performance to date? 2. Why does McCarthy use a subscriber model to forecast NetFlix?s future cash flow requirements? What are the basic elements of a subscriber model? 3. Construct an annual subscriber model for NetFlix that can be used to forecast the expected cash flows for a new subscriber over the next five years. What is the value of a new NetFlix subscriber? Assume a discount rate of 20%.) Based on your analysis, should NetFlix be acquiring new subscribers? (Hint: It is helpful to develop a timeline of the events that take place when a new subscriber signs up for service.) 4. Assuming that NetFlix does not change its current business model, what is the value of NetFlix.com? What changes, if any, would you suggest be made to its existing business model? What are the value implications of these changes?

 

Paper#5280 | Written in 29-Nov-2015

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