Netflix and the Golden Age of Television - Essay Example

However, there is hope for a high level of profitability in this sector; as the article from Slate underscores. Likewise, a hidden and somewhat unforeseen problem that Netflix faces within Europe is the fact that it must be engaged with a multi-lingual region and offer a litany of different subscriber content within national borders that ascribes to the given linguistic nature of the region. Whereas the success of Netflix in the US and in Latin America is part and parcel due to the fact that these regions are defined by only two languages, the challenges faced within Europe are more complex. Although this article is useful in representing the range and extent to which Netflix can hope to penetrate new markets, it is also limited in that it does not fully consider unique dynamics of how foreign markets could present unique challenges to the business model that Netflix has been able to exhibit to such a great deal of success so far.

According to the Slate piece, entitled, “The International Language of Tube”, service providers such as Netflix are open to capitalize on a market shift that is coming to be exhibited; one in which the consumer’s frustration with traditional television corresponds to the increased demands for the shows and entertainment that this traditional technology provides (Thomas, 2014). Moreover, the article cautions that traditional TV should be highly wary of the potential for firms such as Netflix to dominate the market; due in part to the successful business model of bypassing third-party advertisers and passing the cost of advertising space directly on to the consumer in terms of subscriptions.

This article is likely to be the most informed and well researched all that have been included in this study. It is the further opinion of this analyst that Netflix will likely experience significant threats and challenges based upon the way in which technology continues to grow and expand over the coming years. Finally, the piece by Variety discusses the difficulties that Netflix faces in penetrating the European market. Essentially, the piece focuses on the fact that Netflix is not the first service provider within the European region that offers similar services.

As such, rather than being able to absorb the European market in a relatively rapid manner, in much the same way that they incorporated the United States market, a higher level of competition is evident within Europe. Likewise, the past several years, as compared to growth rates in Latin America and elsewhere throughout the world, illustrate that Netflix is growing within Europe; albeit at a much-reduced rate as compared to elsewhere throughout the world (Wallenstein, 2013). The decision that is faced is predicated on how Netflix should best expand.

This piece is beneficial in discussing the unique nuances between markets and the way that a non-differentiated business strategy represents unique challenges; when one compares different regions and unique cultural approaches to entertainment. Terms of all of this information, it is clear and apparent that Netflix is not expected to continue its meteor rise and profitability within the next several years. As firms mature, the overall growth potential that is exhibited tends to contract as time goes on.

However, rather than accepting this as fact, Netflix has a variety of options in terms of penetrating the European market and providing services to more and more subscribers. The first of these options have to do with discontinuing a level of competition with direct competitors and attempting either a predatory or not predatory takeover of these firms. As a direct result of the fact that Netflix has established such a powerful base of subscribers and has such a high degree of profitability and financial reserves, the potential to buy out some of these competitors and to create a unified force within Europe that would increase its overall rate of sales and visibility is a viable option.

Furthermore, by forming partnerships, such as the one that was created with Orange and Canal +, Netflix will increase its overall rate of visibility and the more effectively able to operate within the European market. Finally, it should be cautioned that even if Netflix is able to buy out many of its competitors, the cost of doing this will be extremely high. This is due to the fact that distribution rights and content licenses will need to be earned and for each and every region that a particular show or series is aired. Naturally, this creates a hardship in the way in which Netflix has previously been viewed as extraordinarily affordable for so many individuals.