Case Analysis Of Netflix

From the beginning of Netflix’s startup, the company had a huge impact in the movie selling industry to the movie lovers. Everyone was impressed with the bright idea of delivering your favorite movies or latest movies right to your door step. Unlike other movie rental stores Netflix had no hidden fees, and no late fees, just one monthly rate and subscribers have the freedom to cancel their membership at any time without penalty. Netflix allows subscribers to get their DVD’s straight to their doorstep with next day shipping. Subscribers are able to rent about 2-11 DVD’s at a time, all depending on which plan they have (Netflix: DVD Terms and Conditions, n.d.). Based on the Netflix media center in the company overview, from when it was first

This is not only good news for shareholders but also for the subscribers because it will allow them to continue using their subscription in a variety of places around the world. Rick Aristotle Munarriz, reporter with Daily Finance, mentioned that Netflix was “announcing earlier this year that it expects to complete its global rollouts by the end of next year. The aggressive push is expected to deliver material profitability by 2017.” With this kind of global expansion users will soon be able to use their Netflix subscription just about

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