Netflix Act 2.1: Netflix's Current Business Model
MBAA 609
Talisha Quinta
04. 08. 2015
Netflix Act 2
1. Netflix’s current business model is that of a video- streaming company as well as a subscription DVD rental company. The two divisions are now their own entities and today the company’s focus is heavier on the digital side of things. They even discouraged new users from joining the DVD subscription and instead shift their focus on online streaming content from smartphones, TVs, and their tablets. The DVD rental has its own domain now, with the main website having no mention of DVD at all. Netflix has also since gone public, with soaring profit and growth. They enjoyed competitive advantage from their size and scale, providing limitless selection of titles and extensive shipping coverage throughout the States. They keep their customers happy by maintaining their brand loyalty, leveraging their big pool of user …show more content…
With channels such as HBO claiming exclusive rights to certain content, Netflix is shut off from the opportunity to make that content available for their users.
Another problem that the growing company has to face is rejection from companies such as Time Warner and HBO, preventing Netflix to get streaming rights for some shows such as Game of Thrones. Since Netflix is now seen as a big competition, the stations and other companies are scared that if they allow Netflix to stream their content, their consumers will flock to Netflix.
3. Netflix uses disintermediation by moving to original content creation although technically it is still sponsored by studio partners. Original Netflix series such as House of Cards, orange is the New Black and Arrested Development is actually licensed from other studios. These series are Netflix’s investments that have been paying off really well. They also secured partnerships with AMC for Mad Men and strike a huge deal with Disney for streaming access to Pixar, Marvel, Lucasfilm and Disney
Talisha Quinta
04. 08. 2015
Netflix Act 2
1. Netflix’s current business model is that of a video- streaming company as well as a subscription DVD rental company. The two divisions are now their own entities and today the company’s focus is heavier on the digital side of things. They even discouraged new users from joining the DVD subscription and instead shift their focus on online streaming content from smartphones, TVs, and their tablets. The DVD rental has its own domain now, with the main website having no mention of DVD at all. Netflix has also since gone public, with soaring profit and growth. They enjoyed competitive advantage from their size and scale, providing limitless selection of titles and extensive shipping coverage throughout the States. They keep their customers happy by maintaining their brand loyalty, leveraging their big pool of user …show more content…
With channels such as HBO claiming exclusive rights to certain content, Netflix is shut off from the opportunity to make that content available for their users.
Another problem that the growing company has to face is rejection from companies such as Time Warner and HBO, preventing Netflix to get streaming rights for some shows such as Game of Thrones. Since Netflix is now seen as a big competition, the stations and other companies are scared that if they allow Netflix to stream their content, their consumers will flock to Netflix.
3. Netflix uses disintermediation by moving to original content creation although technically it is still sponsored by studio partners. Original Netflix series such as House of Cards, orange is the New Black and Arrested Development is actually licensed from other studios. These series are Netflix’s investments that have been paying off really well. They also secured partnerships with AMC for Mad Men and strike a huge deal with Disney for streaming access to Pixar, Marvel, Lucasfilm and Disney