Netflix

1917 Words Apr 28th, 2008 8 Pages
Netflix is the largest online DVD rental service in the country. The company provides a monthly flat rate service for the rental of DVD movies, and most recently, video games. They founded the company in 1998, and have grown and maintained the largest portion of market share ever since. By the end of the third quarter of 2007, the company boasted a collection of over 90,000 titles, and had almost 7 million subscribers. On average, Netflix ships over 1.6 million discs a day, and has over 55 million in circulation. Netflix has continued to grow, and has watched as other companies enter the market, then quickly leave after not being able to penetrate the market.
 In 2006, Netflix continued its rapid growth, with the number of subscribers
…show more content…
Netflix began it's operations in 1998 when it decided to capitalize on the increase in internet users, by offering an online version of movie rentals. It owes a large portion of it's success, to its policy of having no due dates, late fees, shipping and handling fees, or per title rental fees. The company started off slowly, and suffered significant losses during it's first few years. But by 2003 it had begun to earn a profit. In 10 years, it has turned into the largest company of it's kind.
 In just six years, the total market has grown to an estimated 8.8 million subscribers at the end of 2006, with total estimated rental revenue of over 1.2 billion dollars
 Since Netflix launched in 1999, the number of its subscribers has grown at a seven year compound annual growth rate (CAGR) of 79 percent, and revenues have increased at a CAGR of 113 percent Netflix has some interesting growth strategies over the next few years. Their plan is to continue to innovate and enhance the consumer experience, as evidenced by their new streaming video program. They also intend to focus on subscriber growth, in order to maintain market leadership, and realize economies of scale. They believe they will continue to grow by leading the expansion of online video rental. The company plans on doing this by offering subscribers both mail delivery and a continuously improving online video option. Netflix believes that their appeal and success are built on providing

More about Netflix

Open Document