A mere decade and 4 million subscribers later, Netflix has taken on established video rental companies such as Blockbuster, Hollywood Video, and Wal-Mart and emerged as the leader in innovation and customer service. In addition to betting that the Internet would be the future of the video rental market, Hastings made a few other key predictions that helped him develop a
At the height of the movie rental industry revenues hit $11.6 billion (“Video Tape Rental” 2012). Blockbuster Video was the largest video rental company in the US and around the world until it was bought by Dish Network in 2011 (Sakthi Prasad 2011). The movie rental industry was attacked by digital rentals since pay per view emerged, but it wasn’t until digital rentals online became popular that any real dent was made in the video rental revenues. Netflix emerged with a new concept of renting DVD’s via mail order with no late fees and as long as a customer desired to have the DVD. Their business concept included a subscription with unlimited rentals at one movie at a time.
Netflix business model At the very beginning of 21 century, the introduction of new technologies and electronics products had quickly increased consumer opportunities to view movies. It was common place in 2012 for movies to be viewed at theaters, on airlines flights, in hotels, from the rear seats of motor vehicles equipped with video screen, in homes, or most anywhere on a laptop or a smart phone. This progressive technology development created a market for the whole movie entertainment related industries, which lead the movie rental industry that is one of the created affiliated industries into a strong competitive market. The competition of the movie rental industry is fierce and complex. Our goal is to build up our analysis of how strong the competitive forces are in the movie rental marketplace based on the Five Forces Model of Competition.
The subscription system of Netflix is a web-based system that allows customers to order DVD online using a web service that quickly delivers by mail movies they can keep as long as they want. The software system is vast and complex and which helped Netflix changed the video distribution industry. First, the system computes who gets what movie next. This can be very challenging but at the same time is very important to support its subscription based business model and allow even low-frequency watchers to get movies appropriately. Second, the system allows calculating which movies will be in demand.
Push and Pushback in Streaming Video 1. a. Fostering deployment of technology that enables user-friendly, ease of access to the Netflix streaming service. b. Initiative of Netflix to get into original programming. c. Growing competitions from businesses such as Amazon.com, allow people to stream videos at no charge. d. Fees that studios charge Netflix for access to the studios’ content.
Executive Summary As the biggest chain of company-owned and -operated budget motels in the United States, Motel 6 has a number of advantages that will provide continued success into its future in motel industry. Services is the biggest strength of the motel and is evidenced by the loyal customers. Motel 6’s profits have been fluctuating up and down between 3 to 4 percent of annual revenue per room since 1995, and the company expects that will be gradually increasing by entering the extended-stay market. The study of traditional budget motels were losing customers to extended-stay properties, and the growing acceptance of the extended-stay concept could make it easier for Motel 6 to enter the market. However, Motel 6 has some disadvantages.
For years Netflix has been entering into deals with electronics manufacturers such as Song and Samsung to include the Netflix software with their devices, allowing the end-users to access the Netflix streaming service. Netflix needs to foster the creation of technologies that allow fast and easy access to the Netflix streaming service, while providing high quality content. The second major challenge is the growth in competition in the video streaming market, Netflix is competing against Hulu, Amazons subscription service, HBO Now, Google Inc. and others to dominate the video streaming market, and, at the time of this case study, was winning the battle against the newcomers, but this lead would surely decrease as other streaming services entered into agreement with movie and television studios. The third challenge that Netflix is facing is getting involved in original programming, creating their own series and movies. 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.
Netflix’s Business Model and Strategy in renting Movies and TV Episodes Reed Hastings, founder and CEO, launched Netflix as an online rental movie service in 1999. Netflix is a company that distributes movies and television by streaming online and mail delivery. There are eight different membership options to choose from each varying in number of DVDs rented out at a time. Netflix also offers to stream movies and television series directly from their website to different devices (i.e. Pc, Mac, iPad, iPhone, Wii, PS3).
Netflix MBA 530 March 15, 2015 Dr. Drew Gold Netflix Netflix was founded in 1997 by Reed Hastings and Marc Randolph. Originally, the company offered seven day online rentals to its members in DVD format (Nelson & Quick, 2013). By 2007 Netflix introduced stream movies and TV shows from its members personal computers. The convenience of streaming has continued to make Netflix a highly valuable video company. “Netflix is the world’s leading Internet television network with over 57 million members in nearly 50 countries enjoying more than two billion hours of TV shows and movies per month, including original series, documentaries and feature films” (Netflix, 2015).
At the beginning it was just an online bookstore. Six years later, Amazon used their own inventory management, distribution infrastructure, fulfillment, and customer service model to become the one of the biggest online-shopping company. By 2000, over 75 percent of U.S. consumers recognized the Amazon.com brand, and the Interbrand ranked the company as the 48th most valuable brand worldwide. The number of customers increased from 14 million in 1999 to over 20 million in 2000. However, a successful company like Amazon.com also has its own actual problems.