Net Flix Case Study

Many video on demand services are now offering technologies that allow users to pause, fast forward and rewind the movies they purchase. Though the selection offered by cable companies is extremely small in comparison to Netflix, it will only be a matter of time before the number of selections will increase drastically. §     There are a large number of substitute products. Netflix is in the business of providing personal entertainment at an affordable cost. Since any other form of entertainment is considered a substitute, Netflix?s industry is in direct competition with all other forms of entertainment, whether it be reading, physical exercise, regular television, etc.

At the same time, the Internet has become an essential tool for rising filmmakers and has also helped movie industries to advertise new films for little to no cost. Overall, it is a two-sided argument of whether the film industry’s convergence with the Internet has been helpful or detrimental. Before diving into the pros and cons of the Internet in relation to the film industry, one should understand a brief evolution of movie distribution in history. Before the convenience of being able to watch movies in our homes, films were shown at movie palaces. These palaces were “full-time single screen movie theaters that provided a more hospitable movie going environment” (Campbell, Fabos & Martin, p. 247).

Meanwhile, Netflix might keep the customers who try the service and happy with it continue paying the monthly fee. Therefore, Netflix has less problem in predicting revenue or level revenues. * Being an on-line DVD rental store, Netflix combines the growing Home Entertainment Market and the Internet. Unlike brick-and-mortar video rental business, Netflix incurs less overhead because no storefront is required and less employees are hired. Movies are sent to customers in prepaid envelope within 24 hours after the customer returns a movie.

Redbox Strategy Analysis Introduction This analysis takes an in depth look at the movie rental industry and more specifically Redbox. Redbox is the only company that has taken advantage of the in-between state of technologies that we are currently in. The movie rental industry has traditionally been, renting hard copies of movies in brick and mortar stores with thousands of retail titles. Technology has advanced so fast that it is clear to see that the future of home movie rental lies in wireless downloads and streaming movies instantly. However, the success in the movie rental industry is not solely determined the method of renting and technology.

Offering ad free streaming has proven to be quite a leg up in the competition in terms of allowing subscribers to enjoy their favorite shows almost instantly. When compared to cable, Netflix has more recent movies and shows. It is convenient and easy to stream, one could watch it on their phone or laptop on the go. As compared to only a few years ago when consumers would have to drive to the nearest location to pick up the movie and return it within the time it is

It wasn’t beholden the inventories of particular stores. And, it wasn’t beholden to customer traffic the way that Blockbuster was. It could offer more movies more conveniently at a cheaper price point for consumers. These are its competitive advantages. The monthly fee is low enough that it isn’t hard to rent enough movies to make it cheaper than Blockbuster.

Also, the consumers can easily opt to switch from one substitute to another because of this latitude, which makes it very appealing. The obligation to return a movie or compile stock of DVDs after having purchased them is almost obsolete. In addition, consumers realize that the choice of purchasing a DVD is more costly than renting or streaming therefore the absence of disposable income has pushed them in that direction in lieu of buying them. Buyer Power: Medium to High. The reason why consumers have shifted from buying DVDs to renting or streaming is due to the reasonably low price tags which empower them to decide whether a particular brand or distributor would match their pockets.

With the touch of a button, subscribers are able to watch their favorite movies, without ever leaving their seats from anywhere in the world. Netflix also continues to provide a DVD by mail service, which delivers movies and television shows directly to patrons’ mailboxes. At a separate cost, the DVD service can be subscribed to in addition to the streaming service or it can be purchased without the streaming service, if preferred. Cost/Value Netflix is an exceptionally low cost option for in-home entertainment. At a price point of only $7.99 per month—just over a quarter per day—considering how many movies may be viewed in such time period, its unlimited streaming servic... ... middle of paper ... ...he past, as well as suggestions based on what is popular amongs others, and now there is even an option to connect to Facebook in order to see what your friends are watching.

Netflix doesn't rent videocassettes, only DVDs (in part because they're lighter and cheaper to mail). Netflix was able to identify and implement a strategy fo... ... middle of paper ... ...been reported that they have had some bad point where they fell 8% and there is an estimate net loss of $5 million to $15 million. This is not good if there are any plans of gaining money from the stock. Also as of right now this is what was reported about Netflix stock: “Stock of the online DVD rental company was up more than 15% in early morning trading Thursday. Netflix increased their forecasts for both revenue and total subscribers today, trying to compete with powerhouses like Blockbuster and Wal-Mart.

An excellent example is Netflix, which became a huge success because it continued to innovate. Back in 1980s, Blockbuster, a video rental shop chain was a huge hit among the masses where people could rent videos from thousands of available titles by visiting a store nearest to them. Netflix, started in 1997, knew that in order to thrive in the video business world, they would have to adopt a different approach and that resulted in the inception of mail-order delivery system where customers could rent videos from the comfort of their homes, which became a huge hit and resulted in losses for blockbuster which was left for bankruptcy and was bought by Dish network at a bankruptcy auction for about $320 million. Lack of innovation killed