...Netflix strategy has no brick and mortar stores, big stores with a large variety of movies in stock. Netflix relies on the internet for customers’ orders and mail system for the delivery. The company does not have late fees, fluctuating monthly fees, predetermined rental periods, instead has a flat fee. Netflix, allows its customers to view unlimited streaming of movies and TV shows for a monthly fee, and has also developed platforms to deliver its titles for Nintendo Wii, Xbox 360, PlayStation 3, and TiVo. Netflix also supports decks from Panasonic, Insignia, and Seagate, and a number of Android and Apple mobile devices including the iPad. Though Netflix has faced some challenges in previous years because of changes it made to its pricing strategy. Netflix has a strategy that would sustain its competitive advantage for many years to come. Netflix does not have to do or perhaps little marketing to rise to the top of the online marketing. A few well-placed ads will do the trick. Simplicity is the idea, so customers do not feel the pressure. Although, the numerous choices overall, makes Netflix an outstanding company to stay to watch the customer’s preference. During the company's rebranding strategy, there was much confusion with the customers. Some of the customers felt betrayed by Netflix and switched to other services such as, Hulu and Blockbuster. This being said, most of their customers stayed and went along with it. Though they lost some customers during this time, it...
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...Netflix Iva Flores Excelsior College Business Finance What is Netflix? Is it worth it to gamble your money on this stock? One may wonder should I invest in this company or just walk away. You would have to analyze the company's financial background and ensure they are financial health to invest in this company. To find information on Netflix you would have to search online and look at the stock market websites like NASDAQ, AMEX, and NYSE to review their past financial statements. Netflix is one of the largest leading internet television network company in the world today with over 50 million members in more than 40 countries. Reed Hastings and Marc Randolph started Netflix in 1997. In 2002, Netflix makes its initial public offering of 5,000,000 shares at $15.00 per share on NASDAQ under the tickler “NFLX”. (pr.netflix.com) They started streaming service in 2007 and made it easier for people to watch and enjoy TV shows and movies anywhere, any place, and anytime as long as they have internet connection, TV, computers, and mobile devices. This type of market is very competitive especially with all the changes that are going on in the future. There are many competitors that Netflix has to compete with like Redbox, Hulu, and other companies. Netflix core strategy is to grow their streaming subscription business domestically and internationally. Also, their goal is to expand streaming content, focus on programing an overall mix of context to satisfy customers...
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...Netflix Anthony Farias Strategic Planning for Organizations MGT450 Professor: Vivian Scott December 8, 2011 Abstract Founded in 1997, Reed Hastings observed; noticed and assessed that there was a growing demand for motion picture rentals. Netflix began with an offer for their ever-growing customer base in which competitors like Blockbuster and Hollywood Video had not brainstormed with the idea that would allow customers to select and purchase movie rentals right from the privacy of their own home. No need to wait in line in a retail store anymore for a secondary movie pick because their primary selection was ‘sold-out’; Netflix posed its strategic move against all other competitors and thus came into existence. In 2011 the conditions that all the home entertainment companies must implement to meet or exceed current standards is now more than ever needed with a lagging economy of more than three years. At the same time, consumers are striving to save money, time, and gas as all three of these conditions effect the movie rental industry. This research paper will address a brief history of Netflix, the competitive industry in which they compete, potential breakdowns, and finally an offer of speculation for how to address forecasted future breakdowns in a way that will turn them into positive possibilities. Netflix The vision of Netflix is simplistic: “Our vision is to change the way people access and view the movies that they love.” (Netflix.com...
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...Netflix Assets We classify our streaming content obtained through a license agreement as either a current or non-current asset in the consolidated balance sheets based on the estimated time of usage after certain criteria have been met, including availability of the streaming content for its first showing. We amortize licensed streaming content on a straight-line basis generally over the term of the related license agreements or the title’s window of availability Content is obtained through direct purchases, revenue sharing agreements and license agreements with studios, distributors and other suppliers. DVD content direct purchases or revenue sharing agreements. Streaming content is generally licensed for a fixed fee for the term of the license agreement but may also be obtained through a revenue sharing agreement. DVD library is its non current asset. The Company amortizes its direct purchase DVDs, less estimated salvage value, on a “sum-of-the-months” accelerated basis over their estimated useful lives. The accounting method for backlog DVD’s was changed after 1994. Our recent survey work suggests that NFLX streaming offering is compelling and should get more so as it acquires additional streaming content. In turn, this is creating a virtuous cycle whereby NFLX sub base grows, leading to greater financial resources to acquire more content to improve the user experience and continue to grow the sub footprint. Additionally we believe DVD costs may fall quicker...
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...6 Industry Analysis 6 Business Model 8 Company Analysis 9 Competitor Analysis 11 Amazon 11 Blockbuster 12 Redbox 13 ALTERNATIVES 13 Additions of Subscription Fee Package 14 Introduction of Netflix' Pay-For TV Channels 15 Domestic Elimination of DVD-mail-in Services in 16 Strategic Partnerships 17 International Expansion 19 Market Strategy 20 RECOMMENDATION 22 CONCLUSION 26 REFERENCES 26 EXECUTIVE SUMMARY Netflix is the world’s leading subscription service provider, offering its members access to an extravagant collection of TV shows and movies. Initially, the company offered its subscribers a low price, single monthly plan, consisting of both the unlimited Internet video streaming service and a DVD-mail-in service. Subscribers could “watch TV shows and movies anytime, anywhere.” In July 2011, Netflix eliminated the combined plan and separated the two services into their own monthly plans. If subscribers wanted to continue receiving both services, they were obliged to sign up for both the services separately, Consequently, the resulting price increase of the new “combined” plan significantly increased subscription cancellations and resulted in a 50% drop in Netflix’ share price over one month ( Yahoo Finance, 2013). The Internet video streaming industry becoming increasingly more competitive, particularly due to the fact that many substitutes exist and number of competitors is increasing. In addition, the bargaining power of content providers...
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...movie rental needs has suffered a significant loss in revenue to the rise of RedBox and Netflix. The competitive advantage offered by the two companies has tapped into Blockbuster’s market and cause a lack of blockbuster for the company. Since 2009 the company has continue to reported decreased revenue and profits against its competitors. In 2010 the company filed bankruptcy and has since then implemented new services and products similar to its competitors, however, customer’s still prefer RedBox and/or Netflix. Once upon a time on a Friday night after work, you were looking to go home, relax, and watch a good movie. You come up on a big blue sign with yellow lettering, and think, “I’LL RUN TO BLOCKBUSTER!” Today, we’re looking for the nearest RedBox, or browsing Netflix for a good flick. There was time when families would take a trip to Blockbuster, order a pizza, and make it a movie night. Today, people have the luxury of not even leaving the house to find a good movie; thanks to Netflix. After a routine run to Wal-Mart, Walgreens, or Kroger’s it has become second nature to browse the RedBox, especially since the cost is only $1. But what has happened to good ol’ Blockbuster? Over the past few years Blockbuster video locations have steadily declined. Blockbuster, the once powerful source for movie and video game rental, has become nonexistent in some areas. Due to the rise of Netflix and RedBox, Blockbuster has experienced a decline in sales, continues to close locations...
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...17 countries worldwide. It is headquartered in the Renaissance Tower in Downtown Dallas, Texas.[1] Because of competition from other video rental companies like Netflix, Blockbuster has seen significant revenue losses. The company filed for bankruptcy on September 23, 2010. Strengths * Lead market share of online rentals * Low fixed costs * Worlds largest selection of DVDs * Fastest delivery time of any online DVD rental company with over 35 DCs * Service: over 90% of DVD's are received by customers within one day of ordering * Strong website (shopability, navigation, reviews) Weaknesses * Can't control most important expense: shipping expenses * Older demographic has a hard time understanding their concept * Watch instantly feature only allows a small selection of DVD's * Distribution time * presence in only DVD segment Opportunities * Pricing segmentation (i.e., different plans) * Online distribution * Other types of rentals (Video games, educational, institutional, etc) * Internationalization * Expanding to Video Game rental Threats Rising stamp costs, Other larger retailers launching into similar space (i.e., Wal-Mart, Online digital distribution iTunes, Napster Redbox, Blockbuster allowing the rental of games in addition to movies Like most brick-and-mortar rental businesses, Netflix often has trouble providing enough copies of new, popular movies Strategy Used Blockbuster video began to sell its stock of dvds and video games before they...
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...for consumers who wanted the movie viewing experience without making a purchase. The growth of the movie rental industry via an online presence I feel will continue to grow as more and more people become accustomed to the idea of owning or viewing things through a purely digital means. With a growth in any industry comes the inevitable competitiveness that we see between Netflix and Blockbuster. I would not be surprised to see Redbox throw their hat into the ring with online offerings in the future. 5) What is Netflix’s strategy? Which of the five generic competitive strategies discussed in Chapter 5 most closely fit the competitive approaches that Netflix is taking? What type of competitive advantage is Netflix trying to achieve? Netflix’s strategy was a “six-pronged” one: 1. Providing comprehensive selection of movie DVDs 2. Providing an easy way to choose movies 3. Providing a fast delivery of selections 4. Having no due dates for return 5. A convenient drop-it-in-the-mail return procedure 6. Aggressive marketing to attract subscribers and build widespread awareness of the Netflix brand and service. Of the five generic comparative strategies...
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...Netflix is the leading movie and television streaming company which was established in 2007. Netflix began as a disc rental company which offered door to door movie rentals at a monthly rate. The company also began a video streaming service which consumers pay a monthly subscription fee to access thousands of movies and television shows at a low rate of $7.99 per month. This allows the user to watch at anytime, anywhere with an internet access point and a viewing device, to stream as many movies or videos as they like. Netflix has negotiated terms with networks managing titles to either receive a profit of each title or a cut from subscription fees. How strong are the competitive forces in the movie rental marketplace? Do a fiveforces analysis to support your answer. The competitive forces in the movie rental marketplace are not very strong. Netflix’s major competitor is actually just RedBox. Most people would think Blockbuster Express kiosks would be a serious competitor, but actually Blockbuster Express (not related to Blockbuster LLC or Blockbuster stores) is operated by RedBox. According to NPD Group, a market research company, overall disc rentals was down in 2011, but it still managed be the top source of movie media in homes with 62 percent of transactions being disc transactions. At its peak, Blockbuster had operated approximately 9,000 stores, they are now operating approximately 900 stores worldwide. RedBox, a recent competitor, operates approximately 42,000 kiosks....
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...Research Paper: Netflix Founded in 1997, Reed Hastings observed; noticed and assessed that there was a growing demand for motion picture rentals. Netflix began with an offer for their ever-growing customer base in which competitors like Blockbuster and Hollywood Video had not – the allowance for customers to select and purchase movie rentals from the privacy of their own home. No one needed to wait in a snake like line in a retail store anymore for a secondary movie pick because their primary selection was ‘sold-out’; as such, the rivalry of the Netflix against all other competitors came into existence. In 2010 the conditions that all the home entertainment companies must implement to meet or exceed current standards is more important than any previous time in history. This research paper will address a brief history of Netflix, the competitive industry in which they compete, potential breakdowns, and finally an offer of speculation for how to address forecasted future breakdowns in a way that will turn them into positive possibilities. The vision of Netflix is simplistic: “Our vision is to change the way people access and view the movies that they love.” (Netflix.com, Hastings Reed, 2011). With more than 15 million current members, Netflix is the world’s largest subscription service for the streaming of television and movie picks and sending movies in the mail. New entrants are always a threat to existing companies like Netflix in the industry; however, Netflix continues...
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...organizations for this project are Netflix and Blockbuster. This research project will demonstrate why the two companies changed to stay in competition. Additionally, this research project will demonstrate how technology obligates organizations to change their business model. Blockbuster opened their first store in 1985 in Dallas, Texas and expanded to operate 6,500 video rental stores (Blockbuster, n.d.). The organization was a competitor in the small video rental stores by providing a wider selection of movies and game rentals. Because of the positive, public acceptance Blockbuster expanded quickly and opened stores across the nation, London and Canada (Blockbuster, n.d.). Netflix was founded in 1997 in Scotts Valle, California. The organization website was launched in April 14, 1998 providing to the public online-per-rental model. Netflix introduced the monthly subscription concept in September, 1999. In February, 2007 Netflix introduced the video-on-demand via the Internet. At the present time Netflix provide services in Canada, Latin America, the Caribbean and Europe. Netflix is recognized to be one of the most successful dot-com ventures (Funding Universe, 2011). ORGANIZATIONAL CHANGES Blockbuster was purchased by Dish Network after filing for bankruptcy in late September 2010. The company has closed a large number of stores at it works to create an online video-streaming outlet (Merced, 2010). Blockbuster’s edge over its competitors is that it is allowed to...
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...Since founded in 1999, Netflix has grown to become the world’s largest online movie rental service. In the beginning of 2007, Netflix surpassed 6.3 million subscribers. With a catalog that includes more than 100,000 titles, Netflix is leading the movie rental market. Netflix’s subscription-based business model was a disruptive innovation in the movie rental business. By using the internet, Netflix focused on providing convenient and affordable prices for an entertainment industry that was already highly popular. Based on a product that consumers already loved, Netflix’s business model was profitable because it improved the consumer’s rental experience. The company aimed to become the best cost provider. As part of its competitive advantages, Netflix has an intuitive website (easy to use), personalized movie recommendations, and excellent customer service. Netflix has been rated No. 1 in online retail customer satisfaction by Neilsen Online for the past 3 years and for nine consecutive periods by Forsee/FGI Research (Netflix, 2009). Netflix’s strategy for success has included providing a comprehensive selection of movies; an easy way to choose movies, fast delivery, a no late fees policy and a convenient drop it in the mail return system. These strategies ensured a competitive advantage to Netflix and threatened to make the traditional video store obsolete. A combination of its business model and strategic approach carry out the mission of the company. Diagnosis of...
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...Summary Netflix Inc. (Netflix) is right now the biggest online supplier of DVD rentals in the US. Established by Reed Hastings in 1997, the organization offers month to month prepaid rental administrations using its online web search tool, where the organization then sends DVDs to supporters by means of the United States Postal Service (USPS). Netflix has several critical success factors such as overall cheap costs, convenience and many more. The details for each factor will be revealed at the later page. Netflix is still in the growing stage and has to face a lot of obstacles before making it to the top in online streaming. Several recommendations are stated to improve the company such as investing more in technology. 2.0 Company Background Source: www.jobsape.com Source: www.jobsape.com Netflix Inc. is an online television network with more than 44 million members in over 40 countries worldwide. The company was incorporated in 29th August 1997 and its headquarters is located in Los Gatos, California. In 1999, Netflix Inc. started its own subscription. By 2009, Netflix Inc. offered a collection of 100,000 titles on DVD and had more than 10 million subscribers. Netflix Inc. is an online entertainment retailer that provides intangible products and services to its customers. Netflix Inc. provided online movies and television series to its customers. The members can watch as much as they want, anytime, anywhere, on any screen that is connected to the Internet. Netflix Inc....
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...Netflix Incorporated, Case Study Marketing 101-H1 Assignment 2: Case Study Analysis Group 4: Jagvir Bagri, Michael Catalfamo, Tina Hoang, Jason Rudzki Submitted to Dr. Youssef Ahmad Youssef Humber College Business School September 27, 2010 Introduction In the summer of 2011, the co-founder and chief executive officer of Netflix Inc. Reed Hastings, made the decision to separate the companies online streaming service from the DVD rental service. The DVD rental services mails out DVD’s to customers one video at a time and the streaming service allows customers to watch movies and television shows via the internet. Instead of charging each customer a flat rate for both services, as it had in the past, Hastings wanted to charge consumers for each service as its own separate entity. This meant each customer would now have two accounts (instead of one), pay considerably more in membership fees and still receive that same amount of content. Shortly afterwards, on July 12, 2011. Mr. Hastings, publicly announced the changes and informed his customers that they would come into effect in that coming September. In 2010, the business reported revenues of more than two billion dollars and had approximately twenty-million subscribers. After Hastings announced the split, his stocks fell by more than fifty percent from a one time high of more than three hundred dollars per market share. Stocks in Netflix continued declining quickly and before the end of the year, they...
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...Megan Welshymer BA 370 9/29/15 Extra Credit # 1 Case Study: The Netflix Rollercoaster 1. Netflix’s original marketing strategy offered several flat-rate monthly subscription options; in which, members could stream movies and shows via the Internet or have disks sent to their homes in a pre-paid and pre-addressed envelope. Free from the despair of due dates and late fees, members could keep, up to, eight movies at a time. Upon the return of a disk, Netflix would automatically mail out the next movie from the customer’s video queue. Members were able to change and update their queues as frequently as they liked. The sheer innovation of Netflix’s strategy encouraged several competitors to enter the market to compete directly, forced existing competitors, such as Blockbuster, to extend their services to include mail delivery, and inspired the very creation of Redbox. Regardless of all the competition, if Netflix can remain on the cutting edge of their craft, by continuously offering the latest releases and the most far-fetched options; they should be able to maintain their competitive advantage, because they offer a valuable, reliable service at a consistent price. 2. Reed Hastings’ strategic change and rapid reversal affected Netflix’s fourteen million customers in several ways. First, the company launched a streaming-only plan for $7.99 per month in November 2010, and increased the cost of each DVD plan by $1. Customers interested in both services, were...
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