Case „Netflix Leading with Data: the Emergence of Data-Driven Video“ Analysis

Case „Netflix Leading with Data: the emergence of data-driven video“ analysis

Question 1:

In its competition with Netflix, where did Blockbuster go wrong? How was the use of customer data a key differentiator? How might Blockbuster have better positioned itself against Netflix?

Answer:

1) Competition between Netflix and Blockbuster (where Blockbuster goes wrong):

The case revealed that in general without doubt Netflix was much more stronger than Blockbuster. Netflix could carry a much larger quantity and diversity across genders and at the same time Blockbuster was constrained by physical limitations imposed by its bricks-and-mortar stores, generally limited its selection to mainstream titles. Furthermore, Blockbuster made very big inconvenience for the customers who wanted to keep the movies longer time (because it limited rentals from one to five days). Moreover, customers had to pay additional amount of money (a fee) if they returned a video late. Blockbuster’s pricing model meant the customers had to pay each time they rented a video, while Netflix charged a flat subscription and were allowed to rent one to five DVDs at one time with no limit on how many could be rented in a month or no due date. Therefore, Netflix’s pricing schemes gave customers a greater flexibility comparing with Blockbuster’s pricing which was not so attractive for current customers. Also, Blockbuster could not offer for its customers one of the main things in business world - the flexibility , because it was constrained by inventory at its stores, but Netflix was strong enough to provide flexibility for customers. The problem was that main focus of a business model was based not on inventory warehouses what had negative effects for customers limiting them on keeping movies as long as they wanted to have them.
However, ”no late fee” program , the one Blockbuster was