Netflix vs. Redbox

Netflix’s target market ranges from people aged 17-50 years old that have Internet access, which guarantees a near-future constant market potential of 225 million people in

Netflix can continue to offer more opportunities for partnerships and venturing into gaining opportunities to increase its market share. Furthermore, Netflix should continue to expand the content in which it offers its subscribers (Ferrell & Hartline, 2014). Moreover, by partnering with movie studios and other content providers they are able to gain more entertainment abilities faster instead of waiting long extended periods for DVD releases.

So, with all that being said, when we discuss concerning the world’s top leading online streaming media company, Netflix first comes to mind because we know they committed in to distributing/circulating movies and TV shows for years by way of the internet or online services, as it has the required license and agreement with some of the world’s largest, and most important, content providers, film studios, and TV channels as well.

The NetFlix web site also integrated movies currently showing in theaters by providing the ability to check local listings and show times, as well as the ability to view movie trailers on its web site. In addition, the NetFlix web site kept track of each subscriber’s preference for various types of movies and provided an individualized predicted rating for all of the movies on the web site. Since launching its web site in April 1998, NetFlix had experienced rapid growth. Revenues had grown from $1.4 million in 1998 to $5.0 million in 1999. The number of full-time employees increased from 46 in December 1998 to 270 in December 1999. By March 31, 2000, NetFlix had over 120,000 paying subscribers. Typical of most Internet startups, however, NetFlix had not yet earned a profit, reporting net losses of $11.1 and $29.8 million in 1998 and 1999, respectively. Exhibit 1 and Exhibit 2 provide annual financial statements for 1998 and 1999. Exhibit 3 provides quarterly operating results for 1999. The NetFlix business model focused exclusively on the new DVD format technology. Management had four main reasons for focusing on this specific segment of the home video market. • DVD players were the fastest growing segment of the video player market. Because of the rapid adoption of the new DVD technology, sales were

Netflix currently offers no selection of video games such as those for X Box, Game Cube, Playstation2, etc. The video game market is an incredibly large market, with millions in annual sales. By employing the same technology and distribution system that Netflix currently uses for DVD rentals, the company could easily enter the video game rental market with relative ease.

What is Netflix’s strategy in the on-line movie rental market? What are Netflix’s sources of competitive advantage? Identify the competences key to the success of Netflix’s strategy and explain why. Netflix was a late entrant to the movie rental market and it was a first mover in the on – line movie rental market. Netflix’s strategy in the movie rental market is differentiation from traditional movie rental stores. Instead of attracting customers to a retail location, Netflix offered home delivery of DVDs through the mail. Why only DVDs? In 1998, most available movies were in VHS cassette format but Netflix concentrated on using only DVDs because its

Netflix has a business strategy that is composed of three business segments: domestic streaming, international streaming, and domestic DVD (Ernst & Young LLP, 2015). The two streaming segments (i.e., domestic and international) “derive revenue from monthly membership fees for services consisting solely of streaming content,” while the domestic DVD segment derives revenues “solely of DVD-by mail,” also from monthly membership fees (Ernst & Young LLP, 2015, p. 62). A subscriber can receive either streaming service or DVD service from one monthly membership fee, but not both (Ernst & Young LLP, 2015).

Netflix started the campaign on a positive note by capturing a larger customer base with DVD-by-mail business. The success was short lived due to increasing logistics and inventory cost. Also with the advent of digital era, DVD-by-mail fell out of favor. Netflix figured out the loophole and decided to tap into the online streaming market with content marketing. With exciting new features, constant updates and recent expansion of customer base by providing its streaming services in India, Netflix has only grown into a juggernaut.

In the age of online streaming of popular movies and TV series, Netflix is the number 1 global internet subscription provider by leaps and bounds. The company was founded in Scotts Valley, CA in 1997 by Marc Rudolph and Reed Hastings, both of which were becoming heavily involved in the “new technology” of the world. The initial idea for DVD rental-by-mail came about when Reed Hastings had accrued upwards of $40 in later fees after returning an overdue movie. It was at this point in time that Hastings vowed to never charge any customer late fees and to this day him and his company has held up that deal. During that time DVD’s were just becoming popular so Hastings and Rudolph made the decision to take up the opportunity to sign up as many early subscribers as possible for this new service they were going to offer. After many years of ups and downs, Netflix became the go to site for anyone wanting to watch a certain movie or show on their own time without having to wait for it. There are three subscription plans for the online streaming part and three subscription plans for the DVD rental-by-mail portion as well. The best part about this service is that all the plans that are offered are under $15 a month, well below the average cable bill. Having different plans available to the average consumer means that the company can pull in more revenue regardless of which subscription is signed up for. Netflix currently is carrying 48 million members worldwide in 40 different

When you go online there is an almost infinite amount of websites that you can go to. One of these websites for the past decade has been Netflix. Netflix is a services that offers DVD and Blu-ray delivery as well as a vast online selection of on demand movie and shows that may be streamed from any compatible device, not just on a computer. Netflix the public the largest option available when it comes to the online streaming community and offers many different perks that customers may enjoy. The company has continually innovated past each hurdle the market tries to place in front of it and shows no sign of slowing down anytime soon.

Netflix is the largest and popular online DVD rental services company in the United States. The company is able to provide a large number (more than 100,000 DVD title) of DVD for customer. With Members paying a monthly fee of $7.99, they have quick and easy access to movies on the internet. Netflix also has free delivery service by mail for members who prefer watching it via other devices other than the internet. The wide selection of DVDs and convenience had led to 33 million members using Netflix. In addition, Netflix provides recommendation service for customer such as customer preferences. In August 26, 2010, Netflix said the member can use TV programs via PC, TV, iPad, iPhone, Wii, Xbox360 and PS3 to watch movie. The era of DVD rental stores diminishes as companies like Netflix changes consumer behavior. Consumers

Its mission statement, Netflix continues to grow and make new goals for itself. Its growth strategies include expanding its leadership position in online DVD rental into internet delivery of content; to make the best product, and best consumer experience, even better; to lead the expansion of Internet delivery of content by

Looking strictly at the video rental industry, Netflix faces minimal internal rivalry because the industry is dominated by only a handful of firm in Europe, namely Blockbuster. Although Netflix faces little internal rivalry in its immediate industry, the company faces an intensely competitive broader market. Since home entertainment covers a broad spectrum of technologies and channels of distribution, Netflix is in direct competition with firms in a number of other industries including cable networks, who air movies on television, satellite companies’ VOD services, and websites like Hulu, which provide video content through online streaming. Furthermore, as people transition from consumption of physical DVDs to

The use of technology has allowed Netflix to build a profitable business by taking advantage of the uniform pricing – differential cost concept. They also leveraged technology to enhance the value proposition and overcome the shipping delay and reduce the cost of building their DVD library. Technology has enabled them to deliver a differentiated service based on the automation of key processes. This in turn has built a competitive advantage over the traditional retail stores.

However, on a corporate scale, Netflix dreamed to make a push into the streaming market by introducing more titles for the consumer to have easy access to. Netflix has a sustainable advantage when it came to their ability to physically distribute their titles in a new and innovative way that created superior customer service. They also have the upper hand when it comes to online streaming of content because they are the first movie distribution means that can stream directly onto your game console, computer and television. Netflix is currently positioned to make long and short-term progress in the streaming market once they gain the right to use more titles. This will add to consumer retention as well as bring in new consumers who will now have switch to movies than just the previous means of physical