Netflix enjoys lower fixed costs due to the fact that it is an online DVD rental company. As an internet business, Netflix incurs less overhead costs than competitors such as Blockbuster, as well as having fewer employees to operate the physical locations, thus labor costs are greatly reduced. ? Netflix gives customers unlimited access to the largest selection of DVD?s. Netflix?s video library consists of over 45,000 titles, making their selection the worlds largest, beating out Blockbuster, Movie Gallery, and Hollywood Video.
Netflix has more than 40 million subscribers who have access to more than 100,000 titles as on mid-2013 (Netflix, 2014). They have more than 42 shipping locations and ships over 1.575 million DVD’s to subscribers on daily basis (Netflix Competitive Advantage, 2010). In USA the highest ISP speed is 2.97Mbps which is provided by cable vision-optimum. Netflix together with YouTube accounts holds for over 50% of downstream traffic on fixed networks. Its design and traffic management play key roles on its network infrastructure (The ISP Speed Index, 2014).
In light of this challenging industry landscape the business strategies that the company has evolved will enable Netflix to ... ... middle of paper ... ...ITIES • Digital Distribution; s digital distribution of video content becomes an increasingly popular viewing format, Netflix strategically positioned to serve as a bridge during the slow transition from physical DVD formats to digital streaming. Netflix is better positioned for this role than other firms because they already have an E-Commerce business model and a brand name. • Partnerships and Profit Sharing Schemes; Partnerships with companies like Microsoft (Netflix compatible Xbox 360) allow Netflix to expand their subscription base and Netflix compatible streaming devices. Profit sharing schemes with studios allow Netflix to acquire exclusive distribution rights. Both new partnerships and profit sharing schemes should be sought to increase Netflix’s subscription base, profits, and establish themselves as the frontrunner in providing digital home entertainment.
Why not Hulu or other providers? Hulu may get TV shows the day after they air but Netflix has significantly more shows and movies in general. Both Hulu and Netflix work on mobile devices, game consoles and link to social networks. Thor Jensen, author of the article Netflix vs. Hulu Plus states that “with the correct hardware, Netflix offers the best experience in streaming.” Netflix also has little to no ads, while Hulu depends on them. 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.
Twitter was created in March 2006 and in July 2006 the Twitter website was launched. The service grew worldwide popularity in a short amount of time; it had 500 million registered users in 2012, who posted 340 million tweets per day. The service also handled 1.6 billion search words per day. Twitter is now one of the ten most ever visited websites, and it’s been described as "the SMS of the Internet." It’s one of the most successful start-up companies of all time by market capitalization, revenue, growth and cultural impact.
With over 110 million unique users and 485 million average daily page views during December 1999, Yahoo! has clearly proven its ability to attract Web users like moths to light. With Yahoo! 's customizable services available in the U.S. and in 21 countries in 12 languages, Yahoo! users worldwide can pay their bills, track their stock portfolios, purchase virtually any product imaginable, and find a host of other services including email and chat rooms, all within the virtual borders of the prime ... ... middle of paper ... ... for the short-term it still faces possible downside.
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.
There are over 100 shipping location in the United States. Netflix offers over 100,000 DVD titles and over 8,000 that are ready to be watched instantly on a subscribers PC. Netflix has over 1500 fulltime and 1100 part time employees at their headquarters and shipping centers. This had made Netflix the top ranked e-commerce company in customer satisfaction and that is causing a rapid growth in subscribers, revenue and earnings. How does it work?
Social Networking sites like Facebook, Linkedin, Twitter and many more are so well-established in this contemporary digital globe that they are blended in our daily routine very easily. All these SNSs provide all there users with a platform for corresponding, sharing information and to collaborate with others around the world on daily basis. All these sites are so well established that there annual revenue is in millions and billions of dollars for e.g. In 2006 Google spend $1.65 billion for buying Youtube. (“Google buys YouTube for $1.65bn”, 2006) and another the most recent example is “LinkedIn earned $15.4 million in 2010 on net revenue of $243 million” (Bestgrowthstock, 2011, para.
Netflix lost over $11 million in 1998 and as a result significantly changed the business model in 2000. The new strategy included focusing on becoming a nationally based subscription model and focusing on enhancing the subscribers experience on their website. The change in strategic focus has allowed Netflix to grow into the largest online entertainment subscriptions service in the United States with over 6.3 million subscribers (Netflix). Netflix first grabbed the attention of many customers when, unlike the local video rental store, they eliminated due dates and late fees charged by traditional video rental stores. The Netflix model allows customers to pay a monthly subscription fee for which they receive as many movies as they want in a month.