1. When Netflix first started its business, what were the conditions that enabled this business work? 2. What...

1. When Netflix first started its business, what were the conditions that enabled this business work?

2. What were the competitive advantages of Netflix over traditional video rental stores?

3. In 2006 when Blockbuster introduced a hybrid mail and in-store rental model (Blockbuster Total Access), it seemed very obvious that Blockbuster wins a competition with Netflix. However, why do you think Blockbuster could not successfully take advantage of this opportunities and ended up with filing for bankruptcy?

4. How can Netflix keep subscribers loyal and acquire new ones in the tougher competition with Amazon, HBO, Disney + and Hulu?

5. Netflix growth in the US market seems to be maturing. How can Netflix increase demand for its services in the US?

Solutions

Expert Solution

Answer 1) Netflix was started in the year 1997. The conditions that enabled the business work was its subscription based streaming service that provides online streaming of a large variety of films and shows.

Answer 2) The competitive advantage that Netflix enjoys over tradional video rental stores is it provides online service to its customers. They can get access to movies and shows while sitting at their homes just by searching the name. They can watch unlimited movies and shows by paying a monthly subscription fee.

Answer 3) Blockbuster provided a number of services including DVD-by-mail, streaming, video on demand, and cinema theater. Since, the use of DVD players diminished in the past years, demand for DVD's also ended. People prefered buying online media service where they could get unlimited access to a large variety of movies and shows by paying a monthly subsription fee. They did not want to spend a particular amount for every specific movie. This is the reason why Blockbuster failed and Netflix grew.

Answer 4) Netflix can keep subsribers loyal by giving discount offers to existing customers. For example, a subscriber continusly subscribed for 6 months gets 20% discount on 7th month subsricption. New subscribers can be acquired by providing new movies and shows on netflix. Discounts can be given to students.

Answer 5) Netflix can increase its demand by offering frequent discounts. It can also increase demand by streaming some particular famous movies and TV shows liked by everyone such as Friends, Game of thrones, Harry Potter etc.

keosha answered 1 year ago

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