Netflix

1.
S
Netflix;
pioneered
online
DVD
rentals
(instead
VHS,
stores);
want
to
enter
online
 VOD.
1997
foundation.
2007
new
announcement.
 ‐
VOD:
temporary
low‐priced
downloads.
 
 1.
C
Different
paths
to
chose
with
merits;
However
not
chosen.
 ­
pricing
/
subcription
model
 ­
shift
in
merchandising
(recommendation)
system
 ­
broad
recommendations
instead
focused
on
rental
DVD??
 ­
agremeent
with
studies
(more
costs,
higher
satisfaction)??
 ­
distrbution
of
independent
films
via
subsidiary
 OR
 >Complication
is
threat
to
Netflix’s
online
DVD
rental
business
from
a
viable
VOD
 technology
 >
long
term
succes
require
consideration
of
VOD
delivery
method
 >
invest
lots
in
VOD.
 >
competitieve
market.
 Complicated:
functional
VOD
before
two
impediments
widespread
adoption/lack
of
 obvious
customer
base
 1.
Q
Path
chosen
reviewed:
right
announcement?
Which
of
the
three
options?
 
 2.

 S.
rental
of
movies/rental
service
‐
both
home
movie
rental
market.
 S.
1997:
period
of
industry
expansion
 D.
per
day
fee
structure
 D.
success
based
on
largely
impulse
decisions
of
movie
night
instead
of
frequent
 viewers.
 D.
online
subscription
instead
unknown
user
 D.
number
of
titels
(70
000
versus
2500);
focus
on
hit
movies
_
limited
in‐stock
offerings
 D.
monthly
fee
with
unlimited
rentals
versus
rent
per
day
for
specified
time
(financial
 succes)
 D:
slower
delivery
service
 D.
Revenues
montly
fees
instead
revenues
days
rent+late
fees+sell
copies
 D.
Costs:
occupancy
and
loans
 D.
Limited
number
rents
insteads
of
unlimted.
 D.
online
rental
service
(+
home
delivery
by
mail)
instead
physical
store/location
service
 D.
Location:
distribution
centres
versus
rent
location/retail
outlets
(high
visible,
traffic)
 D:
personalized
service;
personalized
recommendation;
rating
system
 D.
DVD
instead
of
VHS
Casette
+
Home
delivery
instead
of
location
attraction
 
 Evolvement
Netflix:
 Early
Strategy
‐
evolvement
market
1997:
internet
retailing
&
DVD
players
 ES‐
1997
focus
on
early
adopters
DVD