Introduction
TiVo was incorporated in 1997 they intended to create an interactive television system that developed the idea of recording digital video on a hard disk. TiVo allowed consumers to watch their T.V shows when they wanted to watch them by recording, playing back, and pausing live television. TiVo has now bundled its services with many companies, but at one point Direct T.V accounted for 70% of TiVo's costumers. Effective marketing and innovation have made TiVo the best known DVR in the industry. TiVo has always considered itself as a hardware provider and a service provider and now seem to be shifting to an all service future. Despite having the strongest brand name and one of the largest customer bases TiVo has suffered millions in operating losses. In 2003 a massive transaction from analog to digital DVR's took place. TiVo has been quick to respond to changes in the market by upgrading the features and refining performance. But, the new digital technology has caused TiVo's market share to drop as competition grows quickly.
Opportunities
The embryonic DVR industry is a huge opportunity for TiVo. The market for television related devices is enormous. The demand for DVR's is rapidly growing as first time consumers are becoming more familiar with the products this gives TiVo the opportunity to get new customers without taking market share. TiVo also has the opportunity to mass produce a more basic upgradeable model of their DVR for less cost and eliminating the monthly fee. The more basic model could possibly cause TiVo to lose monthly revenues, until systems are upgraded, but would allow TiVo to lower cost and conserve engineering resources. TiVo also has the opportunity to enter into new partnerships with cable and satellite providers as the demand for DVR's increase and more television providers gain interest. Last, TiVo has the opportunity to conduct its operations on a global scale; America isn't the only country that enjoys watching television.
Strengths
TiVo has diversified itself in the industry by promoting their system as user friendly and innovated features such as viewing digital photo's wirelessly from a P.C and even a suggestion engine that selects consumer preferences. Marketing seems to be the best competence TiVo has thus far. These unique marketing techniques have made TiVo the most well known DVR and set the standard in the market. Many consumers acknowledge DVR's as TiVo's.
Threats
A major threat to TiVo's market share is the low barriers of entry into the DVR market.
Telecare unit. Being the nurse manager, he assumes the leadership in developing professional relationship among the multidisciplinary team. Mr. Thathamkulam has an open door policy and instructs all his staff to report to him any problems, which arise time to time so that it can be taken care of in the initial stage. He monitors all the team members on a daily basis. Mr. Thathamkulam functions as the chair of the safety committee for Eye Care Line; he monitors for Joint Commission safety compliance in the care line, identifies safety hazards, follows up with fire drills, attends hospital wide safety meetings, conducts quarterly safety meetings in the care line and reports to the hospital wide safety committee chair. He attends nurse manager
TiVo was one of the very first products that allowed people to do this. Advertisers were now worried about their industry. How were they supposed to advertise to people if the people refused to watch them and you could no longer force them to? Their solution was to put the advertisements within the products themselves. They could pay producers to put their products in their stories. Then they found out that their advertisements would be more effective when they put them in the product, even more powerful when the advertisement evolves and turns into a character themselves.
Threat of new entrant is high: With little limitation on capital needs or patents any capable company can easily enter into the already crowded industry.
Although the VCR was first released to the public in 1974, it wasn’t until the early 1980’s that the public began catching on to this new invention. Still, the VCR was the most quickly adopted device of its time. In just three years, the sales of VCR’s jumped from 1.3 million units in 1981 to nearly 8 million units in 1984. The popularity of the household device was quite obvious, but the success of the VCR did not come so easily. Three years earlier, in October of 1981, after some struggle, the US court finally ruled that the home taping of broadcast signals was not an infringement. After that, the VCR quickly became a popular household device across the country (Winston 126-129). “The most common use of the VCR’s is to record TV programs fro viewing at a later date” (“VCR’s” 42). This so called “time shifting” was the foundation for the VCR’s success. Aside from its obvious TV connection, the VCR also provided a whole n...
These days, technology does not need to be revolutionary to scare people and cause controversy; it only needs to be evolutionary, in that large technological leaps are not as important. In 1999, two companies - TiVo and Replay - introduced a slightly fancier VCR-like device called a digital video recorders (DVR) or a personal video recorder.ii These devices essentially duplicate the functionality of VCRs, but make them slightly easier to use. Now, consumers can choose to record a television show by name and for a whole season instead of only one episode. The black box records constantly so that users can pause live television and return to pick up where they left off.
A major strength that Netflix has is their ability to push for such innovation. They have reached new lengths since their start in 1997. From in-mail DVDs, to streaming media on smartphones and tablets, it’s unbelievable to witness this in the making. I think the world is a little shocked on the technological advances of Netflix. What they have done so far is spectacular and it is all because of innovation. New ideas and new strategies developed over the last fifteen years has lead Netflix to where they currently stand today. They currently have a subscriber base of over 700, 000, offering thousands of titles on many different devices. This was made possible because of their ability to innovate and strive for new technological advances. I consider Netflix a very brilliant company. Their strengths are very clear, but this isn’t to say that they have no weaknesses. Netflix has far more competitors now, than they had 15 years ago. I would say that their biggest weakness is not offering enough newer content. Some of their competitors such as Hulu, offer a ridiculous amount of new content. Netflix seems to have a large amount of titles, but majority of these titles are older titles. They need to offer newer titles more often than less. With the company advancing and technology on the rise, the younger population aren’t into the older titles. The younger population now take up a good chunk of the customer base. Netflix must
The video rental industry began with brick and mortar store that rented VSH tape. Enhanced internet commerce and the advent of the DVD provided a opportunity for a new avenue for securing movie rentals. In 1998 Netflix headquartered in Los Gatos California began operations as a regional online movie rental company. While the firm demonstrated that a market for online rentals existed, it was not financially successfully. 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).
TiVo's problem rests in its inability to convince consumers to change their television consumption habits. Improper targeting and positioning have led to an ineffective product, price-point and promotion strategy that has stranded TiVo in the chasm between the early market and the early majority.
As the firm moves forward, top managers must pay attention to staying unique to sustain a competitive advantage. Netflix does not own their content, nor do they have any tangible assets. Netflix is a part of a broad range of network users. As technology continues to grow exponentially, Netflix will have to be readily adaptive to change and innovation. Technology never stops growing and evolving, therefore, Netflix’s business platform should never stop growing and evolving. At the same time, they must be careful to remain user friendly and customer centric by keeping the technology at a level where users will not have to obtain a certain set of technological skill sets.
There are high entry costs to enter the market. The large industry competitors already have captured the market share.
Maintaining profits in this competitive industry is very difficult. The top competitors in the industry have an extensive portion of the entire market, nearly 80% of the market they control. This makes it extremely difficult for small entities entering the market to hold onto their position in the market and stay competitive.
The digital evolution began to transpire on November 1, 1998. Since then there have been many other forms of digital technology adopted by our society and digital television quite possibly is next. “The speedy conversion to digital technology will have profound interest benefits, permitting efficient spectrum use, optimizing the development of new technologies and services to consumers, and fostering diversity and competition(FCC).
The idea inspired Reed Hastings and Marc Randolph, and then they founded Netflix in Scotts Valley, California in 1997 (Netflix, 2014). The company comes into play by developing a subscription-based streaming platform for movies and television shows. Unlike the traditional movie rental businesses such as Blockbuster and Redbox, Netflix’s innovation offers service via Internet, and it does not have any physical stores but instead delivers DVDs through postal mail in the U.S. Since then, Netflix has become the world’s leading internet television network with constant growth of customers to over 48 millions members in more than 40 countries in the North America, Europe, and the Latin America (Netflix, 2014). In this analysis, the main focus is examining the current market environment for Netflix. It identifies the type of market structure that Netflix is currently competing. The analysis also expands on the competitions, product differentiation, pricing strategy, and measuring the level of easy entry-and-exit.
There is strong competition with other companies that offer video streaming at no extra charge. Additionally, Netflix and its competitors are attempting to enter the digital world. Digitally offering television shows is an area of competition that has previously been controlled by
Video Rental and Streaming has partly been of the most significant avenues of the general home entertainment industry in the United States for many years. It promotes constructive development through various channels such as Information Technology, Public Multimedia and it also has a huge impact on people’s lives and their entertainment on demand. One of the best companies which provide this high-advanced service is Netflix, Inc (Netflix). It was incorporated on August 29th in 1997 in California by Reed Hastings & Marc Randolph; listed on NASDAQ as NFLX in 2002. Netflix is the world’s largest Internet subscription service streaming television shows and movies with over 40 million members in 40 countries (Netflix, 2013).