Netflix Case Solution

Anthony Morand

Master in Business Management

1 – How is the online movie rental business changing? Map the industry’s value chain from end to end.

Since the creation of Netflix in 1997, the online movie rental business has been changing constantly forcing companies to adapt their strategy. At the earliest activity of Netflix, Blockbuster dominated the market and customers were renting VHS movies and DVDs directly from retail locations, around 70% of the rental concerned new releases. Then Netflix popularized the online movie rental by offering its customers the possibility to rent a movie directly from its website to finally have the DVD mailed to them. Afterward, Netflix has to face a growing competitor network, not only from classical retail locations but also on Internet. Customers became more and more demanding about the delay of deliveries, the availability and choice of the movies and the flexibility concerning the fees for late returns. Customers started to subscribe to prepaid plans enabling them to rent a number of