Netflix Case Analysis

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Netflix Case Analysis

Netflix is an American provider and the world's leading internet subscription service of on-demand streaming media in the United States, Canada, Latin America, the Caribbean, United Kingdom and Ireland and flat rate DVD-by-mail in the United States. Netflix members can instantly watch unlimited films and TV episodes streamed over the internet to more than 700 devices for about $7.99 a month. With regards to increasing the influence of the Netflix brand, expansion into the video game industry could be an option, however various factors such as competitors, viability and sustainability of the company as a whole need to be further analyzed in order to assess whether this proposal is feasible.

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Plus, Netflix streaming is available on many different consumer electronic devices and is becoming a standard feature for new TVs. * Key Alliances

Netflix holds a contract with movie studios and film producers (such as MGM studios, Warner Bros., Dream Works, etc.) to gain direct distribution and access to first run movie content without the traditional 9 to 12 month delay. This strategy of developing key alliances (Best Buy) with content providers in film and the television sector, and merchandise of DVD hardware has moved Netflix straight to the top of the market, making their brand name recognized and trusted. * Very competitive prices.

For as little as $7.99 a month, people can watch as many movies as they want, either streaming or on DVDs. For just a bit more, a higher number of DVDs can be taken out at a time, giving users more flexibility. This form of movie renting is less expensive than paying for cable movie channels, while giving customers more selection.


* Pricing power.

The studios can still dictate some serious terms to Netflix, limiting when various movies become available (the infamous "28-day window" for instance) or for however long they desire. * Difficulties in Inventory Control

Inventory control is very difficult in Netflix because DVDs are sent to customers through mail, some DVDs might arrive late and some might be broken or lost
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