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PEST ANALYSIS

Political Factors:
Government regulations:
Netflix operates in the US in addition to many other countries, and it continues to expand nationally. This subjects the company to many different regulations by many different countries. Such regulations will have an impact on the company’s performance in that country. Here in the US, the FCC (federal communication commission) regulates communications in the US including video streaming like in the case of Netflix. Rules and regulations issued by the FCC can have a big impact of Netflix. Like the Network neutrality, which means that data on the internet should be treated the same and no discrimination in transmitting lawful traffic (Brenner, D. L., & Maxwell, W., 2011) whether the network neutrality rules are implemented or rejected will have a big impact on Netflix and the cost of the service. Also, regulations against video piracy have a big impact on Netflix, their pricing and their revenue.
Other factors like the US post office problems and whether or not it will remain in business since a big part of Netflix business is through mailing DVD’s. Also taxation for online business
Any rules or regulations for the internet use will impact Netflix since they depend on internet to deliver their service.
Economic Factors:
Netflix service, like any other service, is dependent on the state of the economy, and the spending power of its clients. Netflix service is not as essential as other services so any negative change in the economy will directly impact their customer base, and revenue.
Netflix price needs to remain competitive in order to keep their customers. Also the cost of high speed internet service is a factor.
Unemployment rate will have double impact, one the higher the unemployment rate the less likely for people to buy the service because they can’t afford spending the money. But also the lower the unemployment rate the less time people has to watch streaming videos even if they can afford it. Overall I believe lower unemployment will have a positive impact on Netflix revenue.
Social Factors:
Netflix is expanding internationally. Clients are from many different backgrounds, age, language, and different cultures. All those are factors that have an impact on the business, especially when it comes to the original programing and original series.

Technological Factors:
Netflix depends greatly on technology. Internet is the way to deliver streaming to customers. The internet service reliability and speed has a big impact on the Netflix streaming quality. Netflix needs to continue to work with ISP to ensure fast and reliable service to customers at a lower cost. Also the devices used to view the streaming like TV’s, mobile phones, tablets, etc. Netflix need to remain compatible with the mobile devices and the software used to view their streaming.
Technology in general is developing at a high rate, with new products coming to the market every day, this can be challenging to keep up with but at the same time it can open new doors and provide new opportunities for Netflix to stream videos easier and faster.

Brenner, D. L., & Maxwell, W. (2011, March). The network neutrality and the Netflix dispute: upcoming challenges for content providers in Europe and the United States. Intellectual Property & Technology Law Journal, 23(3), 3+. Retrieved from http://go.galegroup.com.ezaccess.libraries.psu.edu/ps/i.do?id=GALE%7CA250579730&sid=summon&v=2.1&u=carl39591&it=r&p=LT&sw=w&asid=195dc4507e42b4a816413d9759419781

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