Netflix Essay

1197 words - 5 pages

Netflix
Carlos A Martinez
Eco/365
Jan 08, 2013
Douglas Holbrook

Netflix
Inside the large video entertainment industry is Netflix Inc., which was founded in 1997. In 2008 the video rental and retail combined to make up $26.7 billion of Netflix’s market (Schneider, 2010). This market can be separated into a number of different groups DVD vending kiosk, online rental and sales, mail delivery services, and video demand services accessible through numerous devices (Schneider, 2010). Thanks to the advancements in technology the rental portion is dwindling down from physical DVDs to digital downloads. It is simply more convenient to use a video game console, DVD player, or Blu Ray Player to ...view middle of the document...

For example, in 2011 Netflix raised the price of DVD rentals by sixty percent (Stelter, 2011).
Differentiation
Netflix Inc. is can be clearly viewed as the primary leader in an oligopoly market. It differentiates itself from other markets since it is one of the only leaders in an industry that does not have much competition. Two of Netflix’s major competitors are Blockbuster and Comcast (Schneider, 2010). Due to the limited number of competitors, it can be easily determined that they are in an oligopoly market ("Oligopoly", 2013). Even though the competition is scarce and extremely limited, there is still competition, keeping it from being a sole monopoly ("Monopoly", 2013). Unlike a monopolistic competition market not all companies are profit maximizers ("Monopolistic Competition", 2013). It is undeniably not a perfect competition for its lack of competitors and lack of ability of being able to join the industry with ease.
Competitive Strategies
Netflix took an advantage one of the major complaints of many consumers in the video industry. They realized how much revenue was being made by the charging of late fees. With the introduction of a simple monthly membership fee, it eliminated the charge of late fees ("How A Competitive Advantage Led Netflix To Dominate Their Market", 2012). This became a quick competitive edge over the rentals of DVDs. Another competitive decision was to take advantage of is the busy schedule of the average consumer. Next competitive edge is establishing convenience, which was done by beginning the mailing of DVDs straight to the consumer’s home ("How A Competitive Advantage Led Netflix To Dominate Their Market", 2012). Another leading jump could be in exclusive contracts. Receiving exclusive contracts with major companies can provide an edge the competitors can’t keep up with. For example they are currently taking the Disney contract from Starz ("Netflix, Disney Contract: Service Outbids Pay Tv For Rights To Stream New Films", 2012). With deals that are exclusive it provides a service and product that can only be found with their company.
Effectiveness
Questioning the effectiveness of these strategies always comes into determining if these were sound decisions. The first strategy of taking advantage of the millions of upset consumers, who were angry over the billions spent on late fees. Establishing a monthly membership fee is a good way to get customers to be ecstatic about avoiding any late fees or day rental restrictions. In accordance with this membership, it provides an added convenience. No more worries about reaching the video store in time. No more worrying about how long a movie has been in possession. The proof of these successful strategies can be viewed on streets all over the nation. There used to be numerous video rental companies all over the nations, who have promptly been put out of...

Other assignments on Netflix

Netflix Measuring Customer Satisfaction Essay

473 words - 2 pages E-Retail Satisfaction Index, which shows that even as Amazon has risen to top place, Netflix has slid the most. As the two go head to head in the video streaming competition, the company predicts the two will continue to go in opposite directions, with "a gulf that may be too wide for Netflix to overcome anytime soon." References 1) Gustafsson, 2005 2) Oakland, Beardmore, 1995 3) Baldridge.com, 2007 4) Importance of Customer Feedback, 2011

Acc 552 Essay

1159 words - 5 pages 1. The company I have chosen for this assignment is Netflix. Netflix was able to distinguish itself from other companies such as Blockbuster by providing consumers an easy way to select movies they wanted and have them mailed to their homes without having to wait in lines at the traditional brick and mortar stores. Netflix was able to create a niche in DVD rental market by competing based on Pricing Behavior, Netflix offered a flat rate per

Mtv Department

265 words - 2 pages these shifts in viewership. Whit a business plan, I will try to create and develop a new department, for MTV - the Digital Development Department – which goal is to find solutions and new strategies to gain back the leadership to the network among the “digital natives”. The department will create new apps for mobile devices; it will try to stipulate agreements with Hulu, Netflix; etc. In the long run, my goal is, for the department, to create shows that will air exclusively (or primarily) in the “digital space”. I will try to find ways to monetize on digital platform, making of MTV the N.1 brand among digital natives.

Hum 176

315 words - 2 pages to the radio and new they use getting together to watch their favorite show every week as a way to bond. Another form of visual entertainment media that has shaped American culture is the internet. I think this form has had the biggest impact. Just about everyone has used the internet at some point in time. Most people use it on a regular basis. There are video web sites such as, Hulu and Netflix, on which customers are able to view movies or

Work

965 words - 4 pages isolated and agree with what is being said. As a result we may stay completely silent and not give our opinion or, as stated above, we will agree with the opinions others are stating. For example, you and your friends may have seen something about how too much Netflix can cause fatness. Once your friends begin to speak of this you realize that you do not agree with this opinion. You believe that fatness is from many other factors than watching too much

Blockbuster Technology Plan

969 words - 4 pages advantage of in order to offer 3D content streaming to their customers. The biggest factor of sending a movie over the Internet is the amount and type of compression that is used. It would be impossible to send a fully uncompressed high definition movie directly to your home, whether or not it is 3D, because the amount of data is staggering. In order to make the files smaller and able to be sent in small pieces, companies like Netflix use

Redbox

7042 words - 29 pages  heightened convenience. In regards to price, Netflix  rental system requires a  monthly subscription for $9.00 which includes unlimited downloads for that period. While ourage frugal Netflix offers a different approach customers, it promotes a more loyal customer than redbox and Blockbuster Express with its base. in-home streaming of movies. Netflix streaming has

Blockbuster Bankruptcy

1427 words - 6 pages Blockbuster first emerged in 1997 with Netflix, On Demand movies and Walmart Stores (The History Channel, n.d.,). Blockbuster’s target audience is young adults using the slogan “Make it a Blockbuster night”. The young adults between 18 and 34 with a college or higher education are the targets of Blockbuster ("Debt Reorganization", n.d.,). The product that was rented out was movies and games for all ages. This was a great way of making a profit

Downloading Music From Internet

654 words - 3 pages affected by this because a lot of money is put into the production of these and they feel that they are working for free. But more people are watching their movies, their audience is growing because more people are able to watch them, and these movies are becoming popular in this way. New legal website, such as Netflix or Hulu, provide HD movies and TV programmes and offer their service at a reasonable price. This is legal, that means that the movies

Nintendo Analysis

954 words - 4 pages as their online offerings are very weak and they don’t seem to be attempting to move partially in that direction as people are device tired that connect to the PC and moving to more games that are already online. This seems to also be the problem with cable and why Netflix, Hulu and others are moving to allow users access to their favorite games, television shows and movies through their wireless internet connection through their television, Blu

Big Data

1023 words - 5 pages | Streaming Media | Netflix, Blockbuster, Walmart (VUDU), Xbox | Search Engines | Google, Yahoo, Bing | Insurance Companies | Farmers Insurance Group, Monumental Life Insurance, Metropolitan Life Insurance |  Fast Food | McDonald’s, Wendy’s, Burger King | Online Higher Education | Drexel University Online, University of Maryland University College, Penn State World Campus, Coursera |  Media | The Washington Post, The New York Times, CBS

Similar Documents

Netflix Essay

1750 words - 7 pages Netflix Netflix is a retailer of movie rental services. The company offers an internet subscription service for enjoying TV shows and movies, where subscribers can instantly watch unlimited TV shows and movies streamed over the internet to their TV, computers and mobile devices. It offers more than 10,000 DVDs and Blu-ray titles to its subscribers. Netflix also operates a separate library of over 12,000 titles of movies that can be watched

Netflix Essay

366 words - 2 pages 4/4/2013 Spring 2013 | International Marketing | MRKT 405 | Team Project | Company Profile Netflix, Inc. provides Internet television network service that enables subscribers to stream TV shows and movies directly on TVs, computers, and mobile devices in the United States and internationally. The company operates in three segments: Domestic Streaming, International Streaming, and Domestic DVD. The Domestic Streaming segment offers

Blockbuster&Netflix Essay

2065 words - 9 pages Project Proposal The proposed organizations for this project are Netflix and Blockbuster. This research project will demonstrate why the two companies changed to stay in competition. Additionally, this research project will demonstrate how technology obligates organizations to change their business model. Blockbuster opened their first store in 1985 in Dallas, Texas and expanded to operate 6,500 video rental stores (Blockbuster, n.d

Customer Segmentation Netflix Essay

701 words - 3 pages characteristics These characteristics all combined can identify the exact group of end-users that are targeted by companies like Netflix. Geographic characteristics Geographic characteristics, also known as geographic segmentations, include the details the operation area of the company. Netflix is viewed on an international market, which implies that the operating area is the global streaming market, at least in this case. Netflix doesn’t focus on all