Driving Force of Movie Rental Industry

929 WordsMar 14, 20114 Pages
The Driving forces in a movie rental industry are the major underlying causes of changing industry and competitive conditions. Driving-forces analysis have three steps: (1) Identifying what the driving forces are (2) Assessing driving forces which impact Netflix and Blockbuster (3) Companies making strategy judgments Technology Since 2000, the introduction of new technologies and electronics products had rapidly multiplied consumer opportunities to view movies 1. Increasingly numbers of households had combination DVD player/recorders, so they could easily record TV programs and movies and then replay them at their convenience. 2. Moreover, consumers were increasingly interested in watching movies on their big-screen…show more content…
Starting in 2009, all TV stations in the United States were required by law to use digital technology and equipment to broadcast all their programs, a requirement that would result in far more programs being transmitted in high-definition format. Product and service innovation 1. New services for internet delivery of movies, as well as better movie watching devices, were expected to proliferate over the coming years. e.g. (1)Such as Netflix provided comprehensive selection of movie DVDs (In the first six months of 2008, Netflix spent $120.3 million on the acquisition of new movie DVDs and movie/TV content for online streaming) (2)An easy way to choose movies (3)Fast delivery of selections (Netflix developed software giving it one-business-day delivery capability for 95 percent of its subscribers) (4)No due dates for return (Netflix subscribers could keep a DVD for as long as they wished, with no due dates or late fees, in Blockbuster’s 2005, decision to discontinue late fees for in-store rentals) (5)And a convenient drop-it-in-the-mail returns procedure (6)Coupled with aggressive marketing to attract subscribers and build widespread awareness of the Netflix brand and service. 2. Traditionally, movie studios allow consumers to download certain movies to their computers one or two months after the Movie’s DVD released. Recently, however, studios had experimented with allowing consumers to download certain movies to their computers on the
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