The Netflix's streaming business had grown so quickly that within months the company had shifted from the fastest-growing customer of the United States Postal Service's first-class mail service to the biggest source of Internet traffic in North America in the evening. Netflix is considered to be the most successful dot com venture by The New York Times. The company announced the rebranding and restructuring of its DVD home media rentals. From the start the company operated in Unites States and now it is expanding in various continents and has captured various markets. With the recent pricing strategy where substantial increase in the monthly subscription has impacted the company negatively causing a loss in customers.
1. INTRODUCTION Video streaming service is one of growing business in the recent years. Many streaming service providers are available in market and there is a lot of competitive edge between those. Some of the providers are Amazon Prime Instant, Hulu, Vudu, ITunes and each has its unique feature. Netflix is one of the America’s largest movie rental service and in addition provides the subscribers with internet based video streaming service.
Between these, DVD and streaming movies, television shows and original series (Gada, K. 2013). As a startup, Netflix faced some disappointing results in regards to its performance, the innovative company, however, continued to modify their strategy while identifying and exploiting any new opportunities that were presented (Noren, E. 2013). This was when the company designed and developed a website that saw it host millions of subscribers making it rake in huge profits. Netflix has a very unique business model when it comes to value chain. Operations play a central part where most of the functions occur including sales and distribution (Noren, E. 2013).
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. If trends in popular culture move away from those related to movies, revenues may be affected.
The current CEO of Netflix has done an amazing job so far, becoming one of the biggest streaming media providers in the world. With myself being appointed to the CEO position, I have impressive shoes to fill. Netflix has made some serious changes since the startup in 1997. We are now the leading streaming media provider of the world, moving our business into over 130 new markets worldwide, reaching new international growth records. As CEO, I will drive change, identify the current opportunities and threats, and identify our current strengths and weaknesses, based on my prior evaluations throughout these last eight weeks.
As the new videos are released or developed the demand rises. As the U.S market and International market rises and strengthens, the company is prepared to continue its expansion to improve the global sales. (Heisler, Y.n.d.). Price Elasticity of Demand As the demand for content increases, Netflix’s demand rises as well. Netflix claims that the largest share of their video streams market is from their library of licensed content.
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 captures the opportunity for change, growth, and market leadership that allows leaps within the industry in multiple ways (Pearce & Robinson, 2011, p. 376). Simply stated on Merriam-Webster.com, innovation is “the introduction to something new; a new idea, method, or device” Netflix’s Innovative Overview The outlook for Netflix has developed a trend of continuous growth with subscribers and providing products with a substantial cost advantage by distributing a wide variety of titles that appeal to different customer groups (Anthony, 2005). The success of Netflix was simply listening to consumer’s feedback regard... ... middle of paper ... ...a remarkable opportunity to grow in the industry and lead as an innovative provider, Netflix has much opportunity to satisfy its customers and maintain their attention with their revolutionary business growth (Martala, 2009). Their success goes beyond their product. As stated, it is a combination of their culture of high performance drivers and fosters the “freedom and responsibility” mindset (Elliott, 2010).
The mass media faces many obstacles with the growing Netflix and Hulu users, and views these types of media’s as a substitute threat. However, as mass media reaches over 70 million homes in the United States, mass media companies have an advantage over Internet media companies in overall customers reached. The mass media industry continues to be one of the largest industries worldwide, and with the growing population and television users, the investment in mass media industry companies is sound, and are predicted to rise in revenue and profits over the next five years.
Industry Trends Since 1999 the growth of spending on DVD purchases and rentals has been incredible. According to Alexander & Associates, “Rapidly growing consumer activity and spending has built this industry into a major market phenomenon. The DVD format for enjoying pre-recorded entertainment at home is extraordinarily popular and consumers are changing their behavior to accommodate it.” • The VHS market totaled nearly $20 billion... ... middle of paper ... ...ble debt management by having the ability to pay its interest obligations easily. All four of these ratios show us that Netflix is in a good position to service both their long and short term debt obligations, and that they have kept their debt load low and under control. We have found that the gross, operating, and net profit margins are showing us that the company is beginning to post some gains and are improving their profitability.