The potential of vending machines (exhibit 1) Question 3 What effects will the rise of the VOD market likely have on Netflix business model? 1. Netflix now repositions itself as a company of film investor and source of high quality content, not just a rental-by-mail company. 2. Netflix is changing its business to instant streaming media.
Netflix has had quite a bit of success here with shows such as ‘House of Cards’ and ‘Marvel’s Daredevil’, but other video streaming suppliers have started to create and release unique content as well, and some of the major media companies are pushing back against the unique content on streaming services by removing their own content from those streaming services. An example of this is CBS Corp.’s Showtime unit, who said they were going to remove their premium content from Netflix. The fourth and final challenge is the cost of accessing content, as the studios are clearly ready to raise the fees for their content, Netflix has to maintain a
Why? ------------------------------------------------- 1) The first challenge is the spread their usage of their service by several ways. They make partnerships with game consoles and TV manufacturers that include on their system a friendly interface for the user to watch Netflix; the big challenge is cultivating it and making it grow. Second, is the challenge of their competition with Amazon, which has started to stream movies for people that have an Amazon prime account. In this area Netflix is superior because they have a bigger library than Amazon, but even so it is still competition that will take away business from Netflix.
The threat of new entrants into this industry is extremely high due to the low amount of capital needed to enter into the industry as compared to others. It allows companies such as Apple and Amazon, whose existing focus was not on the movie rental industry, to utilize their existing customer base and generate profits without a large initial investment. Due to the high number of competitors as well as the different forms of delivery, such as instant online delivery and mail delivery, there is a high amount of substitute providers for this service. The bargaining power of the movie-rental industry against suppliers is increasing especially in recent years. The reason for the increased control is that DVD sales are declining on the average, meaning that the main form of delivery that consumers are taking advantage of is online-streaming.
Everyone knows the company’s name and the association is generally positive. •Platform- Of all the major streaming services, Netflix has the best delivery system which helps keeps customers loyal. Amazon’s search engine for Prime Video (videos available for free streaming which includes free two day shipping on all Amazon orders) returns results which include videos you can purchase, Hulu Plus is jumpy and the experience is weighed down by in-show advertisements, and streaming on Time Warner’s (NYSE: TWX) HBOGo is jumpy and little things like the title of the episode in your queue is unavailable. •Content- While Netflix recently lost Viacom content, it will soon be replaced with content from Disney which will include George Lucas’s beloved Star Wars franchise. Also, Netflix has sponsored an exclusive window on some pretty good shows, including its big hit, "House of Cards."
Netflix Marketing Plan Executive summary This marketing plan seeks to encourage growth of sales and returns on capital by encouraging more subscriptions. It also intends to intensify promotional campaigns and support customer relations and experiences. The employees too will have a chance to grow and be satisfied working at Netflix. Through it, Netflix is bound to consolidate itself as a mega streaming content distributor worldwide. Mission Statement We endeavor to be a leading company in distributing entertainment content that is affordable, accessible, quality and affordable.
Analysis We will use the S.W.O.T. analysis to begin address the issue and to indentify appropriate strategies for consideration. Strengths Companies Innovations: • Proprietary recommendation system- It’s the main source of sustainable competitive advantage of Netflix. The system provides value to the DVDs rentals by expanding and customizing the customer’s movie preferences. Knowing that one of the basic assumptions about market participants is goal-oriented behavior, where the users are interested in fulfilling their personal goal; this is a good call.
1. Who are the key stakeholders in the Netflix case? Netflix Reed Hasting (CEO of Netflix) Scotts Valley (Founder of Netflix) Marc Randolph (Software developer of Netflix) David Wells (CFO of Netflix) Andy Rendich (CEO of Qwikster) Employees of the Neflix Distributors includes film studios Shareholders Investors Partnership Company Microsoft Xbox 360 Blu-ray, Disc Players Apple Macintosh Customers Subscribers Industry analysts 2. There are several missteps by Netflis in this case. - Misconception of the demand of DVD rental Netflix could not anticipate accurately the demand of the DVD rental. They assumed that unlimited streaming service had more demand than DVD service.
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.
Profit Retention: Because the business and owner are autonomous, the sole proprietor has full ownership of the business’s finances. All profits belong to the owner, who can choose to do with them as they see fit. Location: In a sole proprietorship, the owner reserves the right to change location at will. The owner will need to continue to comply with all city and state registration requirements and tax obligations. Convenience or Burden: While it is quite simple to establish a sole proprietorship business, it can be difficult to raise capital.