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Netflix versus Blockbuster - Essay Example

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Through the fixed monthly rates, charges for late fees are no longer a major bother for the rental company. Netflix was able to expand its market and draw in a huge number of customers with its online options and consumer-friendly features. …
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Netflix versus Blockbuster
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Netflix versus Blockbuster

Download file to see previous pages... Netflix, as a result was able to get ahead of other rental companies. The central consideration in the above case is based on how Netflix will be able to maintain its current position as the premiere rental company in the US.
Significant factor list:
1. Decrease of DVD sales were seen alongside the increase in online DVD rentals, computer downloads, and video sharing. High-definition (HD) television programs also increased in popularity and usage.
2. Prices for wide-screen TVs and HD TVs and DVDs also decreased with most of these TVs being able to maintain picture quality at low prices.
3. All TV stations were required by law (starting in 2009) to broadcast digitally, leading to an increase in HD programming.
4. Old and new TV series have been packaged into DVD formats, further cutting into DVD movie sales.
5. VOD formats were offered by cable companies like COMCAST. COMCAST customers were found to purchase less of movies because of the preferred format available to them.
6. More movie titles became available in most cable companies.
7. DVRs have reduced the necessity of movie rentals and purchases.
8. Online rentals have reduced movie and DVD sales.
Moreover, it has caused the rental and video sales industry to be more competitive with each other and with the cable companies. For those who were unable to compete, they lost significant sales and customers. Recommended Course of Actions: Recommendation 1 Netflix needs to maintain its position as the top rental company by coming up with more innovative techniques in drawing in customers. It cannot allow too much time to pass before new strategies can be conceptualized. Recommendation 2: Netflix needs to continually update its digital and its consumer-friendly options through online applications and options, and convenience-based options for consumers. Recommendation 3: Netflix needs to stay active in fighting and guarding “piracy” practices and illegal downloading. Recommendation 4: Netflix has to come up with new products or marketing strategies in order to maintain its edge on Blockbuster. Recommendation 5: Movie companies need to increase their product base: movie titles, TV series rentals, and video game rentals. Justification for recommendation 1: Netflix needs to maintain its competitive edge against other rental companies. It can maintain this edge by continually coming up with ways in which to market its products and making its options more consumer-friendly. This would help prevent consumers from leaving the company and would help draw in new customers. Justification for recommendation 2: Netflix still needs to come up with better ways to use digital and online technology to the advantage of consumers. Online technology can be used in order to make the rental process easier for the customers; the social networks can also be tapped in order to assist in the process of advertising and marketing the products available. ...Download file to see next pagesRead More
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Questions: Netflix and Blockbuster
Technology advances regularly, thus, by engaging customers in the latest technology, it allows them to keep in pace with the advancing technology. In addition, despite the company being in the industry where profitability is the priority, it promotes ethics by ensuring that customers are well informed of the movies so that they may make their own choices.
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Netflix, an online company that rents DVD movies to its customers has various strategies that ensure that its other customers do not take their customers. Some of the strategies include, avoiding overhead costs like utilities and rent to run physical stores instead they use the capital to ensure they have all the DVDS their clients and subscribers need.
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In this similar context, the movie rental industry is also seen to be perfectly competitive. In order to gather a precise understanding regarding the nature of competitiveness in the movie rental marketplace, the five-forces analysis has been conducted in the following (Thompson, n.d.).
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The company’s market divides into groups like DVD vending kiosk, mail delivery services, online rental and sales, as well as video demand services that are accessible through vast devices. Advancement in technology has boosted the video entertainment industry, with companies like Netflix gaining the most because customers can now access videos straight from home through computers, TVs, Smart phones, and even tablet devices (Nelson and Quick, 2012).
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Netflix’s Earnings per share have been recorded at 46.6% which is about almost twice the industry average. The company has managed to establish a consumer base of an estimated over 40 million users in addition to its creating huge brand recognition. The company’s consumer base which is spread out across over 41 different countries is seen to enjoy over one billion hours of movies and TV shows every months including access to a large number of original series (Carr, 2011).
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Can Blockbuster Stand up to Netflix

The author is sure that the business model for the company is simply to act as the middleman between movie studio and viewers by making sure that the latest released films are available for viewing in their rental locations spread throughout North America, South America, Europe and other parts of the world.

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Netflix has successfully launched its services in France, Germany, Austria, Switzerland, Belgium and Luxembourg earlier this year. The company boasts of more than 50 million members globally who reportedly view TV shows and movies for two billion
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To effectively define the target market, it has to be divided into segments or into groups based on particular characteristics.
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Afterwards, the company launched Netflix.com which was used in renting DVDs online. Pay per DVD rental services were offered by the website by delivering DVDs to clients via mail. Moreover,
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