Netflix Essay

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The business model for Blockbuster and the one for Netflix have many variations. Blockbuster was solely a “brick-and-mortar” company having no online affiliations. It made its money mostly from continuously providing customers with new movie releases to rent. Building thousands of Blockbusters countrywide also helped lead to the company’s success, for by doing so, customers were provided with the convenience of location. Both Blockbusters late fee system, which guaranteed the timely return of rented movies, and its policy of selling the already viewed films, contributed to the company’s value. Netflix, although also based solely on renting movies, was purely online unlike Blockbuster. Its business model revolved around three main criteria…show more content…
Netflix’s investment in IT, its focus on providing the customer with a satisfactory experience, resulting in repeat customers, the money saved from not having to pay many of the costs that most “brick-and-mortar” companies do, and their fast delivery time, are all excellent strategies which have contributed to its success. Although much of Netflix’s success was a result of the aforementioned strategies, without IT or information technology it could not have competed with other rental businesses like Blockbuster. Its initial use to provide customers with a convenient and personalized means of renting movies largely led to its accomplishments as a business. Their use of a search engine makes finding movies much easier than going to a Blockbuster and having to go through hundreds of titles before finding the right one, especially if it’s an older movie. Its use of user feedback for movie recommendations, enables the company to promote and rent out older titles that otherwise would have just been collecting dust. This recommendation service also encourages repeat customers since it offers other movies that he or she will be very likely to want to watch. Another contribution of the Netflix’s movie recommendation service to the profitability of the company is its ability to be used by anyone, which attracts many potential customers. Other, competing, movie rental businesses that lack Netflix’s IT

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