Analysis of Netflix Information Systems

The movie rental industry is a living industry; there are constant changes with advances in technology, rights management, and the slow, but steady, move away from physical Media. Companies such as Netflix, Hulu, RedBox, and Blockbuster are being forced to look at new business models and try to keep up with these changes.

Netflix was founded in 1997 with the intent to revolutionize the way in which consumers watch movies and television shows. Their accomplishments both in innovation and in customer base for their service indicate that the firm has been, and continues to be, successful in doing so. Currently, the

This is primarily because there is no product differentiation in the market. Additionally, Netflix would then lose its flagship brand essence the supportive roles played by these two integral competencies of the company. The well-developed IT management allowed Netflix to move from DVD only to DVD and streaming, allowing the tap into the streaming market and a chance for the company to expand business.

Blockbuster Entertainment, Inc. was once a highly successful and profitable brick and mortar home movie and video game rental store. At its peak in 2004, Blockbuster had up to 60,000 employees and more than 9,000 stores. The idea behind Netflix came from an unsatisfied, embarrassed customer of Blockbuster, Mr. Reed Hastings, now CEO of Netflix, paid a $40 late fee because he returned the movie Apollo 13 six weeks later (Zarafshar, 2013). He began to contemplate ingeniously about a notion to change the movie-leasing pattern into a more pioneering industry. In 1997 Netflix was started as a DVD rental-by-mail business without subscriptions. In 1999, taking a stride additional in the direction of evolving the industry, Hastings began the subscription-based business mode based on renting DVDs by mail with plans reliant on the quantity of titles taken at a time. Netflix put forward 120,000 titles for limitless monthly DVD rental with free shipping no late and per title fees. Since that time Netflix has become one of the most popular subscription services in the world, and is now valued at over $28 billion and steadily increasing. What factors contributed to the success and failure of these two companies?

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,

Netflix success in recent years relates to the video on demand market and the continued success of mail order rentals. The latter was the staple of Netflix in the introduction stage, but Netflix has been able to competitively affect its industry in a way that it has some market share power. The success of the mail order rentals are rivaled only by the success of the Redbox kiosk that have begun to pop up in every supermarket or fast-food restaurant they can get a contract with. The idea is to rent a movie or game from any Redbox for a minimal price and keep it for 24 hours and return to any of the kiosk Redbox owns. The fee is minimal but there essentially is a late fee for every day over the 24 hour period, where as Redbox continues to

Entering and transforming the video rental industry was a large undertaking for the start-up company. The first marketing objective the company undertook was the process of building a brand. Netflix’s identity was crucial to future growth and success. Without a strong brand, competitors with deep pockets could have easily duplicated the company’s business model. Secondly, leveraging technology was critical to establishing the business and infrastructure growth. The consumer base was the final objective Netflix sought to achieve. Retaining and growing subscribers were fundamental to revenue and marketing goals.

The following is a case study of Netflix, Inc. an American-based company that provides the streaming of online media to consumers in North America, South America, and parts of Europe. This case study will provide a brief overview of the company’s history along with four present-day challenges that the company will face as it tries to stay ahead of the competition. In its discussion of the present-day challenges that Netflix, Inc. faces the discussion will also relate the proposed challenges to the managerial challenges of globalization, diversity, and ethics. After each of the four anticipated challenges have been addressed then this paper will provide an analysis of the steps that Netflix, Inc. has already taken to keep the

Netflix began in 1997 as a revolutionary idea by CEO Reed Hastings and software executive March Randolph. Before long, in 1999 Netflix launched its major line of business, the online subscription service, which radically changed the way consumers viewed movies and television. For a young company in an innovative and growing industry, Netflix has set itself up for a tremendous journey. The company has had much success due to its adaption of a modern business model and strength in operations management. Its continued reliance on and improvements of operation management principles is necessary to continue growing and bringing in profits.

Netflix inventory of approximately 75,000 is significantly larger than the average video rental store. The average video rental store has approximately 5,000 titles. Traditional video rental stores rarely stock sufficient copies of popular releases to meet demand. Customers unsuccessfully seeking a particular title may leave without making a selection. The large inventory of creates added customer value through

As the world entered into the 21st Century, humanity has witnessed an ecology of innovation that ranges from artificial hearts and livers to iPods to Bluetooth technology to smartphones and many more ("21st Century Inventions That Made an Impact”). Each with its own unique attraction has become a catalyst in nature for how individuals think, act and live. Along with these state of the art developments, Netflix has become the cutting – edge service for internet streaming media. Deemed as “a worthless piece of crap” from Wall Street analysts, Netflix with tremendous leadership gained control of their industry and swiftly transformed the delivery of movie rentals ("How Netflix Beat Blockbuster: An Exemplar of Emerging Technologies”). Faced with impossible odds, we will discover how Netflix was able to survive, conquer and prosper as the emerging technology in their industry.

Netflix exhibits dominant economic characteristics in the online movie rental business. They enjoy strong market size and growth rate when compared to rivalry competition. The number of rivalries are increasing, and the market remains dominated by only a few sizeable rivalries like Blockbuster Video, Wal-Mart, Walt Disney Movies and Movielink’s Downloadable Movies. Netflix is determined to offer new and innovative technology to sustain their competitive advantage.

In the age of online streaming of popular movies and TV series, Netflix is the number 1 global internet subscription provider by leaps and bounds. The company was founded in Scotts Valley, CA in 1997 by Marc Rudolph and Reed Hastings, both of which were becoming heavily involved in the “new technology” of the world. The initial idea for DVD rental-by-mail came about when Reed Hastings had accrued upwards of $40 in later fees after returning an overdue movie. It was at this point in time that Hastings vowed to never charge any customer late fees and to this day him and his company has held up that deal. During that time DVD’s were just becoming popular so Hastings and Rudolph made the decision to take up the opportunity to sign up as many early subscribers as possible for this new service they were going to offer. After many years of ups and downs, Netflix became the go to site for anyone wanting to watch a certain movie or show on their own time without having to wait for it. There are three subscription plans for the online streaming part and three subscription plans for the DVD rental-by-mail portion as well. The best part about this service is that all the plans that are offered are under $15 a month, well below the average cable bill. Having different plans available to the average consumer means that the company can pull in more revenue regardless of which subscription is signed up for. Netflix currently is carrying 48 million members worldwide in 40 different

This report explains the introduction of digital transformation or innovation in an entertainment company called Netflix. Netflix can be used to demonstrate how anybody could go from sitting in their bedrooms to becoming a global brand. Netflix is a well-known company for their capability to let people allow to stream videos, movies, TV shows and on almost any electronic device for a monthly subscription. This report involves how entertainment companies are using online monthly subscriptions for providing easy access to shows, movies, songs, videos etc. This report also creates a clear picture of challenges faced by Netflix with online subscriptions. Currently, Netflix is world’s one of the leading Internet television network includes more than 50 million subscribers in nearly 50 countries liking more than two

In many ways, Netflix is an amazing company to analyze. By being disruptive, the company has changed drastically the disc rental business and the streaming industry. In addition, the ecommerce business model Netflix has developed was one of a kind, focusing mainly on the consumer’s needs and experience. Now, it might seem obvious that ecommerce marketers should focus on these aspects but at the time it was a first.