Strategy and Case Analysis Assignment - Netflix and Blockbuster

Added on - 28 May 2020

  • 15

    pages

  • 3925

    words

  • 5

    views

  • 0

    downloads

Showing pages 1 to 4 of 15 pages
Running head: NETFLIX AND BLOCKBUSTERNetflix and BlockbusterName of the StudentsName of the UniversityAuthor’s note
1NETFLIX AND BLOCKBUSTERTable of Contents1. Introduction..................................................................................................................................22. Institutional Background.............................................................................................................22.1 A brief history of Blockbuster...................................................................................................22.2 A brief history of Netflix...........................................................................................................33. How Netflix beat Blockbuster.....................................................................................................43.1 Changing technology.................................................................................................................43.2 Retail outlets versus operating online........................................................................................53.3 Pricing strategies........................................................................................................................63.4 Netflix’s innovations.................................................................................................................74. WillNetflixremain the dominate provider of online video streaming?......................................84.1Netflixstumbles: The demise ofQwikster................................................................................84.2Netflixrebuilds: The rise of original content............................................................................84.3 The future ofNetflix..................................................................................................................95. Conclusion.................................................................................................................................10References......................................................................................................................................12
2NETFLIX AND BLOCKBUSTER1. IntroductionOnline streaming has replaced the traditional concept of video rentals. Viewers are ableto access real-time online contents through Internet streaming by adopting a fast data or Internetconnection. Online streaming helps in preventing the act of pirating. Wider range of audiencecan be reached via online streaming. Netflix is the leader of the digital content market since theyear 1997. It is known for providing online entertainment services such as movies, TV series andoriginal contents in more than 190 countries (Netflix Media Center 2018). Members are able towatch at anytime and anywhere without any commercials. Netflix used subscription plan forattracting more members and moved to original programming. It was able to decline the businessof Blockbuster. Blockbuster was the leading company in the video rentals market in the 80s aswell as 90s but lost its position after the arrival of Netflix.This report analyses how Netflix beat Blockbuster Video. It begins with discussing thehistory of Blockbuster and Netflix. This report focuses on various aspects such as changingtechnology and the benefits of online operations that led to the success of Netflix. It also showshow the pricing strategies as well as the innovations of Netflix were responsible for declining thebusiness of Blockbuster. This report analyses whether Netflix will be able to retain its position inthe future. It gives an overview of the withdrawal of Qwikster and the original programming ofNetflix. This report also gives a brief outline of the future of Netflix.
3NETFLIX AND BLOCKBUSTER2. Institutional Background2.1 A brief history of BlockbusterAfter the downfall of the oil and gas industry of Texas where Cook Data Services used todeliver software, David Cook had opened the first store of Blockbuster in Dallas in the year1985. Blockbuster was able to achieve success quickly because of its ability to satisfy customersby renting a variety of videos and films. The founder of Waste Management Inc., WayneHuizenga along with two other investors purchased the Blockbuster Company for $18 million in1987. By the end of 1992, Blockbuster had opened 2800 and more number of retail stores aroundthe world. In 1994, Blockbuster was sold to Viacom for $8.4 billion. Blockbuster earnedapproximately 16 percent of the total revenue from its late fees in the year 2000. By the end of2004, Blockbuster became the largest video rentals in the world with around 9000 stores. Thebusiness of Blockbuster was declining as physical retail stores were getting replaced by onlineoperations and in 2010 it had to file for protection against bankruptcy (Davis and Higgins 2013).After buying the assets and retail stores of Blockbuster in 2011, Dish Network had announced toclose some of the stores in 2012. In 2013, Blockbuster announced to close all the remainingstores in the U.S. Despite the challenges faced due to traditional business models and strategies,Blockbuster managed to operate around ten stores in the U.S.2.2 A brief history of NetflixNetflix was co-founded by Reed Hastings and Marc Randolph in 1997 for offering movierentals over the Internet (Lusted 2012). The website of Netflix was launched in 1998. In 1999,Netflix started offering subscription services to its members and unlimited movie or DVD rentalsfor a less price on a monthly basis. Netflix introduced a recommendation system for givingmovie suggestions to the users based on their ratings. By the end of 2005, Netflix had 4.3 million
desklib-logo
You’re reading a preview
card-image

To View Complete Document

Become a Desklib Library Member.
Subscribe to our plans

Unlock This Document