Netflix Is an Internet-Based Movie

Netflix is an Internet-based movie rental business. It grew as a successful business by offering its customers the ability to join via a monthly subscription. With a subscription, Netflix customers were able to create a "wish list" of movies they wanted to see. Once this list was submitted, Netflix would send several selections to the customer. When the customer was finished watching the movie, they would return the movie via the mail and Netflix would then send another movie. The main draw to this program was that there were no late fees.

The main obstacle Netflix faces is that it is built as an Internet-based company and thus has the limited client audience of Internet users. Although this is a significant customer base, it does not include the significant customer base of non-Internet user movie watchers. This situation has become more significant as new competition has moved in that focuses on attracting this customer base. Specifically, Blockbuster, Inc. has started a similar program that allows clients to both get and return movies via an online program and via their local stores.

In repositioning itself to remain competitive in the movie-rental market, Netflix must focus on maintaining its Internet base against more name-recognizable stores (such as Blockbuster, Inc.) while at the same time developing new marketing strategies to tap into the non-Internet base of movie-renters.

This repositioning strategy must be implemented in a strategic and cost effective manner. The first step in the Netflix repositioning strategy is to increase its marketing to focus on the non-Internet user movie renting population. The success of this step is essential because without the initial marketing stage, the success of all further repositioning strategies aimed at this prospective marketing base will be impossible. In other words, the first step is to create the base, the second and subsequent steps are to make this base a customer base.