Question

1. “The Long Tail”:
   1. A phenomenon whereby firms can make money by offering a limited selection
   2. Refers to the large number of products available through conventional retail stores
   3. A phenomenon heavily leveraged by Blockbuster in its competitive battles with Netflix.
   4. A phenomenon that leverages the fact that selection attracts customers, and that the Internet allows large-selection inventory efficiencies.                                                                                    
2. Which of the following statements is false?
   1. From an innovation standpoint, Netflix is considered an “early mover” in leveraging Internet technology to establish best-in-class brand strength.
   2. Collaborative filtering is a classification of software that monitors trends among customers, and then uses this data to personalize an individual customer’s experience.
   3. It is not possible to achieve scale in the streaming industry.
   4. Scale economies are achieved by firms that leverage the cost of an investment across increasing units of production.                                                                                                                                  
3. Which of the following statements about costs is true?
   1. Marginal costs are costs that do not vary according to the production volume.
   2. Fixed costs are costs associated with each additional unit produced.
   3. The marginal costs of digital goods are zero.
   4. There are some costs associated with digital distribution.                                                                              
4. Disintermediation:
   1. Removing an organization from a firm’s distribution channel.
   2. Expands the path between supplier and customer.
   3. Illustrated by the purchase of Comcast by NBC/Universal.
   4. In the video industry, it results in studios having to share revenue with third parties.                                        
5. Which of the following is not true of Netflix relative to most pay channels?
   1. Netflix is generally more expensive than pay channels.
   2. Netflix offers more programming than pay channels.
   3. Netflix is available in more countries worldwide than pay channels
   4. Netflix can stream to customers who do not have a cable TV subscription.                                            

Answer 1

1).

Answer : a

A phenomenon whereby firms can make money by offering a limited selection.

Explanation:

The Long Tail: It is a type of marketing strategy developed by Chris Anderson. It describes the companies to sell less popular product/services to bulkbof customers so as to get greater profit.

2).

Answer b:

Collaborative filtering is a classification of software that monitors trends among customers, and then uses this data to personalize an individual customer’s experience.

Explanation:

It is a method of making automatic predictions about the interests of a user by collecting taste information from many users.

3)

Answer: c

The marginal costs of digital goods are zero.

4).

Answer: d

In the video industry, it results in studios having to share revenue with third parties.

5).

Answer:d

Netflix can stream to customers who do not have a cable TV subscription.  

Explanation: Netflix can stream through smart TV, smart phone, laptop, PC, gaming console,etc.