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Netflix: Strengths, Weaknesses and Recommendations
To this juncture, Netflix has been extraordinarily successful based on its singularity within the industry. Currently, Netflix relies on its more than 26 million subscribers, who have had access to video rentals and unlimited streaming movies beginning at just $8.99 a month. As the first service provider of its kind, Chiu (2007) reports, Netflix was able to establish industry partnerships that give it unique access to content and advertising channels. Chiu reports that "from the very beginning of its entry into the market, Netflix understood the importance of making partner- ships with the movie industry, the electronics industry, and retailers[1]. Netflix's name was spread widely through promotions with complementary products, such as DVD players and movie websites.
Its immediate success and its greatest strength would be based on the nature and convenience of its service, which has given users access to a wide range of titles from the comfort of their own homes. Certainly,...
For most of its subscribers, this was seen as a far superior model for accessing video media.
Perhaps the biggest weakness in the Netflix strategy relates to the limited amount of content available through its streaming channels. Additionally, recent changes in the pricing rate and structure, which now separates subscription services for DVDs and streaming films into two distinct plans, have raised rates by nearly 60%. (Liedtke, p. 1) Because licensing restrictions prevent it from streaming select content, many popular or classic titles are not available through streaming on Netflix. With a pricing structure that asks customers to choose between the two services, this weakness in the streaming service becomes all the more glaring.
This points to an important recommendation, which is for Netflix to dedicate its resources and priorities in expanding the library of titles which it offers. To date, Netflix has…
Works Cited:
Chiu, R.; Doroudi, S.; Haussler, T.; Khosla, A. & Mattingly, S. (2007). Netflix: Entering the Video on Demand Industry Through Providing Streaming Movies. Stanford University.
Liedtke, M. (2011). Netflix Bracing For Slowdown in Subscriber Rates. Huffington Post.
Netflix is a company with a different business model than prevails in the area of providing video to the consumer. The prevailing model is seen in companies like Hollywood Video and Blockbuster, both with stores across the country to which consumers go to select the video they want to watch. The consumer has a membership in these stores and checks out a video for a rental fee, usually for a
Netflix is the leader in renting DVDs to its customers. When the customer returns one DVD, another is issued. Netflix gained a remarkable success but, on the other, it is facing some of the problems nowadays. Netflix charge a monthly fee from its customers and it has an agreement with the film studios. Due to this agreement, it pays the studios a specific amount from its revenue and this amount
Opportunities Demographics throughout all Australian cities reflect significant opportunity for an online DVD ordering service, replicating the success of NetFlix in the U.S. Development of music and other forms of digital content can also specifically be sold through this channel once established. Potential exit strategy is to sell QuickFlix to NetFlix. Threats Well-funded broadband providers attack the downloadable movie market and force a premature consolidation of this business model. Pricing becomes more inelastic and profitability suffers. Postal
The high level of debt capitalization inherent in how they have financed their stores, which is inferred from the case study, also could be applied to a more effective cloud-based delivery architecture. Netflix did this and was very profitable as a result. Third, Blockbuster has far to go in terms of creating a more effective customer experience. There is significant potential for great upsell and cross-sell as a result. The
The consumer simply selects the film using the hand-held remote for the cable box and watches it right away. Some systems are able to empower the viewer to pause and rewind as well, just as if he or she were watching a DVD and not a signal from a central location. This is very convenient and immediate, and it may also be cost-effective when compared to driving to the
The corporation or seller could benefit by developing marketing strategies prior to consumer reviews being available online. Seller Response to Novice and Expert Consumers Before allowing consumers to post product reviews on a corporations or sellers website, the seller should consider the size of the segments of expert consumers and novice consumers. For example, the seller may benefit from selling certain products if a significant number of expert consumers exist, especially