Netflix Is An American Cooperation

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

Netflix, an internet television network that is revolutionizing the way we watch TV series and movies without having to leave the comfort of our couch has over 50 million subscribers in more than 40 countries.

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.

The downturn of the economy has taken away many peoples disposable income and Netflix’s limited online library may have caused customers to question if it was worth it or not.

These first set of changes, cost the company one million customers and a ton of negative press in social media; including 12,000 comments of dissatisfaction. However, at this point, Netflix’s stock prices still rose. Unfortunately, on September 18, 2011, Hastings posted a new announcement to the company blog, trying to separate and over-complicate the two services. He then reversed the changes, in yet another memo, on October 11, 2011. By this point, however, it was too late; more displeased customers had left and Netflix’s stock prices had plummeted. Personally, I believe this situation caused a short-term public relations nightmare; to the customers who were affected at that time. Netflix retained over thirteen million subscribers; given time, I believe the new generation of customers will still be interested in the services they provide.

Netflix is an innovative company whose revolutionary service has changed the way we watch movies and series, acting as a substitute for the traditional movie rental shops that are now practically extinct. The company began in 1999 offering an online subscription that provided unlimited DVD rental on a monthly basis. The possibility of offering an unlimited service without shipping and handling costs and no late fee allowed you to get a large market share in a few months. In 2010, the company decided to begin its international expansion by introducing its streaming services in Canada.

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.

Today, there are exciting new trends in operations management and the market in which Netflix serves. Netflix accepted these trends and adapted to match the fast-paced production environment. Most notably, rapid product development has challenged managers to make operations as technologically smooth and effective as possible. In 2012, Netflix integrated a Netflix Cloud design for reliable operations and productions. The current design is a web, with each service having it’s own deployment schedule and innovation pace. Simply put, the Netflix approach has been to make internal operations a distributed system. The

The evolution of the movie rental business has transformed society in the context of streaming data quicker and easier. Since Netflix became the "pioneer," of television shows, movies and streaming in 2007 people relied on watching movies instantly from the privacy of their own home (Netflix Inc. Annual Report, n.d., p. 1). The content streaming began through gaming device consoles like Xbox 360 that cost Netflix six cents for a standard definition movie, nine cents for high definition per one user stream at an estimated three gigabytes (Rayburn, 2009). Given that in 2007 the total paid subscribers of 7,326 on average streaming one SD movie daily would cost Netflix $439.56 daily with a monthly cost of $1758.24 and yearly $21,098.88 (Netflix Inc. Annual Report Ending 2008, 2008). The amounted revenue for Netflix of $1,205.340 in 2007 came at a low

Also Netflix needs to prepare a better plan to recover old customers, gain new customers and make sure that the people who still have Netflix keep it. Establishing a bundle price for both online streaming and DVD rental will allow The Netflix Company to recover some market shares and remain the leading overall digital film company. The recommendations are as follows:

Netflix, the online subscription-based DVD rental service aimed to better satisfy customer in a way competitors didn’t, customized and personalized service with unlimited monthly rentals from a great variety of film offerings. Now they want to leverage their strengths to enter into the Video on Demand market

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 Netflix’s own description of its vision for sustainable long-term future, the company describes a few critical elements necessary for growth [Netflix.com]. Its vision encompass the evolution of internet TV, replacement of “linear TV” by the internet TV, development of interactive applications, and enhancement of streaming capability to virtual limitless access capability.

This essay will provide insights and sufficient background to understand Netflix’s success and difficulties the company is facing.

Netflix was founded by Reed Hastings and Marc Randolph in 1997 and was originally based out of Scotts Valley California. The business model that they were working towards was to create a company that would offer online movie rental service made available by streaming media as well as DVD’s that could be ordered online and delivered to the customers’ homes. (Wheelen, Case 12). Netflix had a strategic plan to undercut the competition in an effort to stress the market and force weaker competition out of the field. This was a very successful plan and over a period of years it was able to force the closings of most of its competing market to include the mega giant Blockbuster video. Using a business