Opportunites and Threats of Netflix

Opportunities for Netflix

With the fast pace advancement in technology, Netflix can easily source for the

technology and infrastructure to provide VOD services to its customers. Moreover,

Netflix can review on the current competitors in the VOD market to have a safer measure

before entering into the market. Since Netflix already have an infrastructure for online

customers, and that is their point of contact with customers, they could be at an advantage

to change their business model to providing VOD online, or partner with Cable provider

to deliver the VOD to customer via customers' television set. With VOD, the problems

associated with inventory control such as damaged as lost DVDs might be eliminated.

More people have higher purchasing power since more are buying high-price durable

goods like big-screen HDTV. Hence, it created opportunity for Netflix to offer VOD to

this market segment.

Threats for Netflix

Video streaming technologies had evolved drastically over the years to the recent

VOD. Netflix knows, it is just a matter of time that VOD will become the public most

commonly way of viewing media, but the unknown is that when will that be. If they

continuingly be complacent with their existing model, they will lose out to the intense

competition in the industry. The risk is, for how long they can leverage on their existing

model, until they change their strategy before losing out market shares. Brick-and-mortar

stores like Blockbuster will continue to enjoy its business with customers who want to get

their DVDs on the spot and do not consume high volume of