StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Competitive Rivalry in the Video Streaming Industry: Netflix - Case Study Example

Cite this document
Summary
The present paper "Competitive Rivalry in the Video Streaming Industry: Netflix" has identified that today there are various companies competing for the same market – competitive rivalry. Competitive rivalry can be described as the degree of competition between existing companies…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER96.6% of users find it useful

Extract of sample "Competitive Rivalry in the Video Streaming Industry: Netflix"

Netflix Competitive Rivalry First, it is important to note that today there are various companies competing for the same market – competitive rivalry. Competitive rivalry can be described as the degree of competition between existing companies. Essentially analysis competitive rivalry analysis hints at the ability for a particular company to be better in the market than the others. Some of the competitive advantages that a company can have over the others can be the pricing of the products or service, expenditure on product or service developments, the quality of the product or service, or/ and technological advancement. Competitive rivalry in the video streaming industry is one worth analyzing. Today, Netflix, Inc. is considered the most dominant player in the industry. It is the pioneer in the video streaming industry having been launched in 2007. However, in the following years, some other major players joined in the video streaming business. Some of these include Amazon Prime, Hulu, and HBO (Walsh, 2016). Nonetheless, Netflix still remains the biggest market shareholder boasting of over 100 million subscribers globally (Sheetz, 2018). A report indicated recently points that more than 40% of the American Households have Netflix subscription compared to 14% Amazon prime and 7% Hulu (Profits et al., 2018). Taylor (2018) explain that despite the fact that some Americans have two or more than one company subscription, Netflix still holds and controls about 90% streaming business in the United States and almost 95% across the globe. The ability of Netflix to remain the most preferred company of online video streaming business as compared to its competitors can be based on various reasons. The company ensures that its platform is easy to use (Profits et al., 2018). Additionally, the company ensures that price-wise they are the cheapest. Moreover, it has a great library which is steadily growing and providing access on various platforms including IOS. Profits et al. (2018) say that to continue being the best, Netflix must consistently ensure that it offers a better price, high quality service, and other benefits to its clients. Netflix Pricing Pricing is where competition is very stiff in the video streaming business. In terms of pricing, the difference or the gap is not that much wide. In fact, the difference ranges from 1$ to about $4. For instance, Hulu is the cheapest offering subscription starting at $8 for a regular package or $12 for the commercial-free option on a monthly basis. After Hulu, there is Netflix whose subscription ranges between $9 and $15 per month depending on the quality of the videos and number of possible streaming platforms at a go. Amazon Prime, the biggest competitor of Netflix, on the other hand, has a prime subscription which cost its clients $13 per month or $119 annually. Finally, the costliest is the HBO whose subscription stands at $14.99 per month (Sonenshine, 2018). It is, therefore, it is okay to say that Netflix is not doing badly off in regards to pricing. Library Content While some of the video streaming companies are considering the issue of pricing as their competitive advantage, others consider the content and their quality. This is because consumers sometimes are not driven by the price but the quality and the quantity of the content. According to Goldman Sachs report 2018 (The Economist, 2018), the growth in the number of subscribers is directly linked to the frequency at which new content is added and the quality. This can explain why most of the video streaming companies are spending a lot of resources in the project of adding more content. The company leading the pack in this project is Netflix. Sonenshine (2018) indicate that Netflix is spending about $8 billion in the year 2018 on adding and creating new and original content. Amazon Prime, on the other hand, is spending about $4 billion on the same. The remaining two, HBO and Hulu, are spending about $3 billion (The Economist, 2018). In terms of content, each and every company has its own unique features. For instance, HBO is known to produce their own original content since its inception – in the 1980s (Bylund, 2018). Hulu is among the most respected companies when it comes to delivery of TV shows. Looper (2018) explain that what distinguishes Hulu from the rest of the pack is the fact that it delivers many TV shows for streaming immediately after their release. Amazon Prime is also known for delivering high quality TV shows, though not comparable to Hulu. Amazon also provides access to a range of TV movies, however, sometimes the clients are required to pay more for such. Netflix, on the other hand, has the biggest library containing original and third party content (Bylund, 2018). The Company also offer TV shows as well as movies with the same budget of the client. Essentially, in terms of content, Netflix has the biggest library and continues to ensure that it does the same to its clients. Quality and supported gadgets Quality of the content and the supported gadget is also another way of comparing the competitive rivalry in the video streaming industry. It is important to note that all the four companies support quite a number of gadgets and operating systems. As such it makes it difficult to compare the four in terms of the supported gadgets. However, it is important to note that Netflix and Amazon Prime platforms enable their clients to download the content in their gadgets. Quality of the content is also a field where the companies tend to compete. For instance, Netflix recently introduces 4K Ultra HD though the clients may need to pay extra (Archer, 2018). In response to this Amazon Prime introduced HDR content which is standard for all the content and no extra cost is incurred (Archer, 2018). Hulu and HBO provided full HD content (Looper, 2018). It is clear that Netflix still has better quality content as compared to the other companies. Other Added Benefit To compete the video streaming companies provide added benefits to their subscribers. For instance, Amazon prime gives students a special offer of $59 fee per annum. They also enable the students to access cloud space. Hulu provides over 50 channels on top of the regular service for only $40 per month (Looper, 2018). Looper (2018) say that HBO also has added benefit to its clients. The company provides separate apps without cable and subscription for only $15 per month. These apps can be merged with Hulu and Amazon. In conclusion, Netflix still remains the giant in the field of streaming videos. It has the biggest share across the globe. The company also continue to generate more revenue compared to its competitor. For instance, in the recent quarter, the company generated $3.91 billion in revenue. It the last quarter the company made $291 in profit. Sonenshine (2018) says that Netflix has officially overtaken HBO, a company that was the giant in the field for about 18 years. References Archer, J. (2018). Netflix Beats Amazon Prime And Others In Five-Way Video Streaming Shoot Out. [online] Forbes. Available at: https://www.forbes.com/sites/johnarcher/2018/05/22/netflix-beats-amazon-prime-and-others-in-five-way-video-streaming-shoot-out/#37d7104e6b38 [Accessed 24 Nov. 2018]. Bylund, A. (2018). What Is Netfllix, Inc.'s Competitive Advantage? [online] The Motley Fool. Available at: https://www.fool.com/investing/2018/07/21/what-is-netflix-incs-competitive-advantage.aspx [Accessed 1 Dec 2018] Looper, C. (2018). Hulu Vs Amazon Prime Video: Which Netflix Alternative Is Right For You?. [online] Forbes. Available at: https://www.forbes.com/sites/forbes-finds/2018/05/22/hulu-vs-amazon-prime-video-which-netflix-alternative-is-right-for-you/#54b3996862c0 [Accessed 17 Nov. 2018]. Profits, P., Training, B., Studies, C., Book, T. and Authority, B. (2018). 6 Strategies Netflix Can Teach Us For Dominating Our Market – Predictable Profits. [online] Predictableprofits.com. Available at: https://predictableprofits.com/6-strategies-netflix-can-teach-us-dominating-market/ [Accessed 16 Nov. 2018]. Sheetz, M. (2018). Netflix is adding almost as many subscribers in one year as HBO did in 40 years. [online] CNBC. Available at: https://www.cnbc.com/2018/10/17/netflix-added-subscribers-in-1-year-nearly-as-fast-as-hbo-in-40-years.html [Accessed 17 Nov. 2018]. Sonenshine, J. (2018). Netflix is creating a 'competitive advantage' by adding 700 new and original shows this year. [online] Business Insider. Available at: http://uk.businessinsider.com/netflix-stock-price-creating-a-competitive-advantage-adding-700-shows-2018-2 [Accessed 17 Nov. 2018]. Taylor, B. (2018). To see the future of competition, Look at Netflix. [online] Harvard Business Review. Available at: https://hbr.org/2018/07/to-see-the-future-of-competition-look-at-netflix [Accessed 1 Dec. 2018] The Economist. (2018). Netflix is moving television beyond time-slots and national markets. [online] Available at: https://www.economist.com/briefing/2018/06/30/netflix-is-moving-television-beyond-time-slots-and-national-markets [Accessed 17 Nov. 2018]. Walsh, M. (2016). Netflix faces growing competition as new and old rivals step up their game. [online] Guardian. Available at: https://www.theguardian.com/media/2016/jun/18/netflix-streaming-tv-competition-hbo-amazon-hulu [Accessed 1 Dec. 2018]. Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(Netflix Competitive Rivalry Case Study Example | Topics and Well Written Essays - 1000 words, n.d.)
Netflix Competitive Rivalry Case Study Example | Topics and Well Written Essays - 1000 words. https://studentshare.org/business/1893855-netflix-competitive-rivalry
(Netflix Competitive Rivalry Case Study Example | Topics and Well Written Essays - 1000 Words)
Netflix Competitive Rivalry Case Study Example | Topics and Well Written Essays - 1000 Words. https://studentshare.org/business/1893855-netflix-competitive-rivalry.
“Netflix Competitive Rivalry Case Study Example | Topics and Well Written Essays - 1000 Words”. https://studentshare.org/business/1893855-netflix-competitive-rivalry.
  • Cited: 0 times

CHECK THESE SAMPLES OF Competitive Rivalry in the Video Streaming Industry: Netflix

Competition in the Movie Rental Industry

These forces are supplier power, buyer power, new entrants, substitute products, and competitive rivalry (Haag & Cummings, 2009).... competitive rivalry between companies creates the need for new strategies and businesses enjoy a competitive advantage only for a short time.... hellip; The main competitors in the movie rental industry are Blockbuster and netflix.... netflix acquires its content by buying DVDs from studios and distributors, paying on a fee-per-DVD basis (Thompson, Strickland, & Gamble, 2009)....
5 Pages (1250 words) Research Paper

Provide an economic analysis of Netflix

The company got listed on… netflix started to stream movies on other devices such as Xbox 360, set top boxes, and other internet connected devices beginning from 2008.... The company was launched in Canada in 2008 and Company History netflix was founded in the year 1997 by Reed Hastings and Marc Randolph.... netflix started to stream movies on other devices such as Xbox 360, set top boxes, and other internet connected devices beginning from 2008....
2 Pages (500 words) Essay

Surf Shop Comparison

This distinctive competence enables the company to lower down its prices and thereby retain its subscription base (netflix, 2014). “Our core strategy is to grow our streaming subscription business… We are continuously improving the customer experience, with a focus on expanding our streaming content, enhancing our user interface and extending our streaming service to even more Internet-connected devices, while staying within the parameters of our netflix netflix Core Competencies netflix The core competency of netflix is its largest customer base around the world....
1 Pages (250 words) Essay

Business Strategy: Netflix

hellip;  Ways of renting movies include the following (a) Renting the Netflix players online(b) Renting through video game console integration method(c) Renting through online video streaming (d) Video on demand rentals (e) Renting through online blue-ray players.... Ways of renting movies include the following (a) Renting the Netflix players online (b) Renting through video game console integration method (c) Renting through online video streaming (d) Video on demand rentals (e) Renting through online blue-ray players 3....
2 Pages (500 words) Assignment

The Television Industry with Netflix

There Can Streaming Transform the Music Industry in the same way it has transformed the Television Industry with netflix Mentioning of the word streaming in any context or any platform often draws goose bumps to many people as they are always on the lookout for any latest developments in that line.... This research paper, therefore, seeks to explain whether streaming can transform the music industry in the same way it has transformed the television industry with netflix....
2 Pages (500 words) Essay

Financial Statement on Netflix

Still Financial ment on netflix From the start of to the end, netflix experienced tremendous growth across different aspects of the company.... Still on the same report, netflix made $805 million in terms of gross profits, which finally amounted to about $160 million net income.... The operating expenses for netflix include expenses incurred on technology and development, marketing and administration.... The reduction in marketing expenses is a reflection of netflix's resolution to decrease its advertisements to potential customers....
2 Pages (500 words) Essay

Analysis the case

The Industry rivals – the movie rental industry is highly competitive due to the existence of a vast number of established companies such as Time Warner, Comcast, Cox, Charter, and netflix among others.... For instance, after netflix separated the unlimited DVD and unlimited streaming, which saw the prices rise from $ 9.... Consequently, the competition is very high in the industry.... New entrants – the entrance rate of new players in the industry is low due to the following facts: the existing companies have established, the capital requirement is very high, the cost of setting up an efficient distribution chain is high, the cost of promotion is high, and the high cost of building a solid relationship with the suppliers....
4 Pages (1000 words) Assignment

Can Netflix Regain Lost Ground

This paper "Can netflix Regain Lost Ground" tells that the Chief Executive Officer and founder of netflix, Reed Hastings, preached incessantly of avoiding ideas that can slow down a successful business and to make hard decisions without racking one's brain the entire time.... netflix has since canceled its plan to become two separate companies, but out of the six hundred thousand customers that left, less than nine hundred have returned.... In July of 2011, Hastings announced to his customers that netflix would be attempting to focus more on online streaming of movies and television shows and less on physical DVDs....
1 Pages (250 words) Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us