The Success of Netflix on Revolutionizing the Video Rental Business

Executive Summary The case discusses the success of Netflix on revolutionizing the video rental business. It clearly shows the company’s ability on utilizing superior customer service, emerging technologies, strategic partnerships, empowerment of employees and creating an ever growing subscriber base to transform the traditional video rental in to a 21st century on-demand concept. Video-on-Demand is the recent video streaming technology where pay-per-view programming merges with Internet downloading. Netflix, an online subscription-based DVD rental company, entered the video industry with disruptive technology of offering online video rental while the incumbent competitors like Blockbuster were offering retail rentals. The incumbent competitors eventually followed Netflix’s direction when their core competencies were sabotaged by Netflix’s strategy. In this case study, we would be trying to figure out the possible problems faced by Netflix, the solutions generated by the company, as well as the various ways through which the problems can be handled. The introduction part of the case presents short history of the company and some theoretical aspects. The second part i.e. analysis will build up on the problems identified from the case, the possible solutions created by the company and how the solution affected the company. The last part will conclude the case by discussing the lessons gained from the case and recommending ways through which the case can be handled. Introduction Netflix was founded in 1997 and has truly revolutionized the way people rent movies. It launched its online subscription service in 1999 and has now become the world’s largest online movie rental service. The company has more than 55 million discs and, on average, ships 1.9 million DVD’s to customers each day. On February 25, 2007 Netflix announced its billionth DVD delivery. Two years later, on