Netflix Inc.

Netflix utilizes a number of different advertising methods. Netflix created a coupon in the form of an enlarged movie ticket offering a free month of service. These “movie tickets” are given out at cash registers at all Best Buy stores and are included in packing boxes of most of the major DVD player manufacturers (Sony, Philips, Toshiba, Panasonic, RCA, etc.). Best Buy’s website also has a link directly to Netflix which is under the “DVD rental service” drop down menu. Each DVD mailer sleeve from Netflix includes a tear off “tell a friend” certificate with a promotion code that provides the bearer with a free month of service.

S.W.O.T. Analysis Strengths: ? Netflix provides a subscription-style e-commerce service. Over 95% of customers pay at least $17.99 a month which includes unlimited rentals with up to three titles at a time. A comparably low monthly fee, allows Netflix to lead market share of online DVD rentals while competing with traditional brick and mortar rental stores.

There is not due date or late fees. And finally, once you have viewed your movie return it to Netflix and get another movie from your list. More that 95% of subscribers live within 1 business day delivery. Netflix delivers over 1.8 million DVD’s each day. Here are a few Netflix facts.

The Netflix model allows customers to pay a monthly subscription fee for which they receive as many movies as they want in a month. The subscribers order DVD’s via the firms website and delivered through the United States Postal Service. Subscribers keep the movie as long as they want and when finished return it to Netflix in a postage paid envelop. Netflix’s derives a much of their competitive advantage from their ability to offer each subscriber convenience and a personalized experience. The firm’s CineMatch software gathers data from subscribers’ online profiles, movie rental history and a subscriber’s movie ratings to develop a person... ... middle of paper ... ...iding convenience, selection, personalization and a low cost method for product delivery.

Current Goods and Services The company Netflix is known as a storehouse of content. (Investopedia, 2015) The content includes movies, documentaries, TV shows and educational programs. Viewers pay a flat monthly fee to view the videos anytime and on any type of platform. They also offer a mail order DVD rental through DVD.com. This service allows you to list DVD on a queue to be mailed for viewing and consumers are never charged a late fee.

Carmike Bellevue is eleven dollars and twenty-five cents per adult ticket). The average person’s budget cannot afford to splurge on movie tickets everyday; however Netflix offers their full collection of programs with a maximum cost of eleven dollars and ninety-nine cents a month. For this price not only do you get all their films, but you also get Ultra HD and are allowed to have up to four people watching at a time. Netflix offers three different plans: basic (seven dollars and ninety-nine cents per month), standard (nine dollars and ninety-nine cents per month), and premium (eleven dollars and ninety-nine cents per month). A plus for Netflix would be that the first month is free for any given plan and is watchable on laptops, tvs, smartphones and tablets.

Munarriza stated that “Netflix may have seen demand for discs decline…but its DVD-by-mail business was still good for a contribution profit of $77.9 million in its latest quarter.” This means, that even though they aren’t shipping out as much DVD rentals as they used to, there is no need to eliminate the feature because it’s still making profit and helping the business with its growth. On the other hand, there are still certain families that don’t quite have the fastest internet services. Then there are some who just prefer to pop in a disk and watch a movie on the TV, instead of waiting for the movie to buffer on their laptop. Since the decline of DVD shipping, Netflix has decided to make a few cutoffs on some of their warehouses. Munarriza mentioned on the Daily Finance that “cutting down on the number of distribution centers to 33 from a peak of 50 has helped cut costs,” with less people renting DVD’s there is no need to have as many shipping warehouse as they once had a few years

Along with an extensive collection of titles, the Netflix service also includes access to movie ratings, reviews, and personalized movie recommendations. Netflix ships DVDs to customers through first class mail and rentals are then returned in pre-paid envelopes. The entire transaction is free of cost to the customer. To ensure timely deliveries and returns, Netflix has established an extensive distribution network of shipping centers across the United States. Recently, Netflix h... ... middle of paper ... ...o maintain profitability and market share in the long-term it must align the Studios’ profit interests with its own.

Currently Netflix is seeing mass amount of growth in its streaming customer base so there will be plenty of growth in the next few years allowing for Netflix GO to catch a hold of the new customer base. The threat that runs to parallel to this is that many more streaming services are on the rise and are beginning to gain popularity such as Hulu Plus, HBO Go, and Philo TV. These services could mitigate the number of subscriber growth that Netflix is currently receiving or could develop a similar streaming product such as Netflix GO. A second opportunity for Netflix is the partnership with a large tablet producing corporation such as Microsoft or Sony whose sales may be threatened by Netflix Go. In contrast, the threat becomes whether or not one of these tablet producers is resistant to a partnership with Netflix to produce Netflix GO or partners with another streaming service such Hulu Plus instead.

Its design and traffic management play key roles on its network infrastructure (The ISP Speed Index, 2014). The main strategy of Netflix is to attract more subscribes to the online video streaming service. Amazon, Blockbuster, Walmart, Redbox were some of the competitors of Netflix in movie rental. Netflix consumes about 29.7% of peak downstream traffic because of its online video streaming service. (Adhikari, et al., 2012).