Netflix Essay

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CASE 12: NETFLIX: Desintermediator or desintermediated? Netflix, the world’s largest online movie-rental service, faces dramatic changes in how movies and other entertainment content will be distributed. A decade ago, if you wanted to watch a movie in the comfort of your own home, your only choice was to roust yourself out of your recliner and trot down to the local Blockbuster or other neighborhood movie-rental store. But old model for distributing movies is simply not working anymore. One thing about the future is certain. The business of distributing home video is full of disruption and confusion. Things are really changing. Amid the chaos, Netflix has carved out its own successful niche. “Commercialfree subscription is where we can compete. It’s our best shot.” Netflix is demonstrating how its model can flexibly reach millions of viewers through various channels. For a monthly subscription fee, members could create a movie wish list online. The company would then send out a set of DVDs from that list via the USPS. One of Netflix’s main selling points was that members could keep the DVDs as long as they wanted. When they were done with them, they simply returned the DVDs in the mail with a prepaid return envelope. Netflix then automatically sent the next set of DVDs from the member’s list. As much as this Netflix model revolutionized the movie rental business, it will not last forever. In fact, Netflix is determined to out-innovate its competitors Hastings and his team realized that they had to move into other distribution points. They decided that it made much more sense to partner with experts who already market popular devices. Netflix moved quickly. Now, every xBox, PlayStation, and Wii has become a home theatre, allowing members full access to Netflix’s streaming library. The same access can be had through Blu-ray DVD players

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