Hulu Plus: A Challenge For Netflix

In late August 2015, Netflix was introduced to the Australian Market. Since its arrival Netflix has grown to have over 2.7 million users, surpassing Australian rivals Stan by over 2 million users (Roy Morgan, 2015). Netflix is a media streaming company that allows users to stream television shows and movies on multiple devices in high definition quality. Foxtel is a pay television company allowing users to access television shows, movies and events unavailable on free to air television. Founded in 1995, Foxtel had a monopoly on the pay television market (Foxtel, 2016). Netflix’s emergence onto the pay-tv market raises questions on how this has affected Foxtel’s customer base and profits, especially due to the Netflix’s low prices of $8.99 to $11.99 per month. As figure 1 shows, Netflix has been rapidly increasing in subscribers and Foxtel’s subscribers have been declining slowly.

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 and Hulu plus are pretty similar, both have video streaming and entertain people, but Netflix is way better in many ways. Hulu has recent seasons and more seasons of shows. Netflix has more TV shows and movies. Netflix also has no commercials. While Hulu people have to wait 2 minutes for the show to come back on. People can also, rent DVDs on Netflix. These some examples on why Netflix is way better than Hulu Plus.

Netflix finds its competition and strategic challenges against big names in the market –Google, Apple and Amazon to name a few (Roberts & Zahay, 2012). The challenge for Netflix lies in maintaining the innovative streak, which will add creativity and youth to its brand image and the brand itself. This innovative streak has to be continual and has to match the demands and preferences of the customers in their taste and liking. The brand and the company cannot afford to remain stagnant and rigid in the ever changing and demanding market place. The core competency that Netflix will have to focus on to meet this challenge is to develop and train its human resource. Effective and efficient human resource management will allow the company to tap into present and potential customers, as well as, allow the company to serve them appropriately.

* Hulu also focused on users and offered its service free to them thereby maximising the cross-side network effects between users and advertisers on its platform resulting in increased revenues generated from advertisers.

For the past ten years, Hulu has been among the most competitive online streaming services. Beginning as a joint venture created by 21st Century Fox and NBCUniversal to “distribute their television programming over the Internet,” (Harvard 2017) Hulu has expanded generously, offering the four largest broadcasting networks. In the wake of a new television era, Hulu has the potential to serve as a Multichannel Video Programming Distributor (MVPD). The following write-up includes an analysis of Hulu’s current market standings, including an investigation of growth statistics as well as the company’s overall marketing situation.

Due to the rise of Internet streaming services like Netflix, Hulu, and Amazon, they now give longtime distressed cable customers options and Media companies, like Viacom, are struggling to withstand the competition. The average cable TV payment can start at $99 a month, saving consumers $90.01, as some streaming services can start at $8.99. Streaming offers consumers the option of convenience. More popular than ever, the Internet, mobile devices, and these streaming services have cable in fear they may be coming to an end. The new millennial trends allows consumers to get watch what they want when they wan wherever they want it, what Viacom is struggling to compete

It is predictable that Disney would gain customers for its new streaming services, however, since products are limited to Disney’s own products, there is a limitation on damaging Netflix competitively. In other words, Disney’s entry may be successful in terms of selling its own product, because it may have lower distribution costs due to the direct delivery, however, Disney’s entry may not be able to take Netflix’s market share significantly, because each video product, which is intellectual property, has its own content and originality, unlike highly standardized industrial products, such as a copy paper. If Disney launches its own services, Netflix may counter it by offering the cheaper price or the various price plans, then most of customers will choose to use both. Moreover, Netflix has a much broader range of films than Disney. Disney’s contents are competitive, however, inadequate to beat Netflix’s wide-range contents

stands in a weak position in terms of having power over suppliers because these ther are the owners of the content, which represents the key asset of Netflix Inc. and only a second source of revenues for the TV organizations. Therefore, they have a strong bargaining power and have a profound influence over the pricing of the licenses granted to Netflix Inc. Using backward integration Netflix Inc. produces its own content in the form of TV series, in order to reduce the supplier risk. Buyer Power (high): Although Netflix being the undisputed market leader, huge competition and the minimal switching costs put the consumer in a prime position. Threats of substitutes (high): the chances to get the same level of entertainment from another industry is really high (e.g. video game industry), although costs and product diversities are still the key leading factors that make customers choose Netflix Inc. rather than its substitutes or

It seems like Hulu is finally feeling the pressure from some of its stream competitors, Netflix and Amazon Prime Video, because the company has decided that it’s also going to offer its customers an ad-free experience. Although, that isn’t entirely true.

1. Continue building strong partnerships with other providers – the company should continue partnering up with other providers preferably the multichannel television providers such as HBO and Starz in order to increase their selection of streaming titles. This will definitely help the company not only gain but also attract more customers or consumers and therefore increase market share. This would help lower the churn rate and help expand their subscriber base. Streaming titles can also be increased and improved if the company decides to partner up with these other multichannel providers. Based on research carried out in researching about Netflix it is being understood that Netflix is in partnership with multiple other companies or television providers. Due to all of these partnerships being formed the members or frequent customers are now being able to enjoy the benefits of watching these TV episodes, shows and also movies which are made possible to be streamed to their computers and televisions via the use of Netflix ready devices. In the case of Netflix partnering up with TV provider STARZ, for example, it is obvious that Netflix formed the partnership with STARZ entertainment LLC a movie service provider to make movies from STARZ play available for instant streaming at Netflix ( Netflix Inc 2013). If Netflix continues to work well with these providers the partnerships would be a good relationship which would be beneficial to both

Netflix Inc. is in the entertainment market, which is a part of a larger video, film

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.

Netflix faces tough competition with companies that broadcast live, unique and free content through torrents and cable television.

Customers accustomed to YouTube and Hulu may rebel if too many ads are shown online. According to Oppenheimer analyst Tim Horan, cable companies will start feeling the impact of customers canceling subscriptions to view online video and TV by 2012. Edward Woo, an Internet and digital media analyst for Wedbush Morgan Securities in Los Angeles predicts that in a few years, “it should get extremely interesting.” Hulu and other Web TV and video sites will have much deeper content, and the technology to deliver that content to home viewers will be more