Netflix's Social Media Influence on HMV and Blockbuster: A Report

This report critically analyzes the influence of Netflix's social media strategies on the activities and market positions of Blockbuster and HMV. The study begins with an executive summary, table of contents, and a detailed introduction that outlines the companies' backgrounds and the report's objectives. It delves into the external business environment, exploring factors like eco-consumerism and technological advancements that shaped the industry. The report employs a range of research methods including literature reviews, and the application of models such as SWOT, Porter's Five Forces, and PESTEL analyses. The findings highlight Netflix's success in leveraging social media for global expansion and competitive advantage, contrasting it with the struggles of HMV and Blockbuster. The report also includes an employability review and offers recommendations for HMV and Blockbuster to enhance their online promotional activities and regain market share. Finally, the report provides a detailed analysis of the social media strategies employed by Netflix in comparison to those of HMV and Blockbuster, analyzing the factors behind Netflix's success and the failures of its competitors.

SOCIAL MEDIA USE BY NETFLIX INFLUENCED BY HMV AND BLOCKBUSTER
To What Extent Has the Use of Social Media by Netflix Influenced the Activities of
Blockbuster and HMV?
Name of the University:
Name of the Student:
Authors Note:

1SOCIAL MEDIA USE BY NETFLIX INFLUENCED BY HMV AND BLOCKBUSTER
Executive Summary
 Nature of the Project: The report evaluated the social media existence of Netflix
and its impact on HMV and Blockbuster based on which suitable
recommendations will be offered to enhance online promotional activities of
Blockbuster and HMV.
 Method of Inquiry: Empirical and literature review based research have been
selected for analysing the analysing the extent of social media use by Netflix has
influenced the activities of Blockbuster and HMV.
 Findings: HMV and Blockbuster requires dealing with the issues of content
restrictions so that similar films and TV shows are available within each nation
along with entering market of online video streaming. This can facilitate the
entertainment organization to increase its social media presence in comparison
to Netflix.
 Conclusion: In attaining competitive advantages over Netflix, HMV and
Blockbuster might face the chances of legal actions against the organizations in
social media streaming industry due to broad range of licences and contents use
concerns along with consumer privacy issues faced from the side of the content
provider. For attaining further competitive advantages, HMV and Blockbuster
must require to address the issues related with geoblocks and copyright
infringements.
 Recommendations: To maintain competitive edge over the social media
promotions, HMV and Blockbuster is recommended to made real conversations

2SOCIAL MEDIA USE BY NETFLIX INFLUENCED BY HMV AND BLOCKBUSTER
in real time through running a series of videos regularly on its social media
channels regarding its new and original contents.

3SOCIAL MEDIA USE BY NETFLIX INFLUENCED BY HMV AND BLOCKBUSTER
Table of Contents
Part 1: Management Report........................................................................................................4
1.1. Introduction......................................................................................................................4
1.2. Research Methods and Sources..................................................................................8
1.3. Discussion of Findings.................................................................................................12
1.3.1. Porters Five Forces Analysis..............................................................................13
1.3.2. Pestle Analysis......................................................................................................18
1.3.3. Resource and Capability Analysis of Netflix, HMV and Blockbuster............21
1.4. Conclusion.....................................................................................................................24
1.5. Recommendations.......................................................................................................25
Part 2: Employability Review.....................................................................................................26
2.1. Introduction.......................................................................................................................26
2.2. Discussion........................................................................................................................27
2.3. Conclusion........................................................................................................................30
References...................................................................................................................................31
Appendices..................................................................................................................................37

4SOCIAL MEDIA USE BY NETFLIX INFLUENCED BY HMV AND BLOCKBUSTER
Part 1: Management Report
1.1. Introduction
Company Introduction of Netflix
Entertainment companies like Blockbuster and HMV lost market shares to Netflix
as the consumers of Blockbuster and HMV shifted to Netflix because of its innovative
and value added entertainment services. Netflix is developing exceptional social media
content along with introducing original online streaming content that has captured high
market share over the recent years and has imposed threat to the traditional
entertainment approaches of Blockbuster and HMV. HMV faced the issue of social
media failure in the Twitter platform as it failed to safeguard its social media accounts as
it let the employees to attain increased access to the companies’ social media accounts.
On the other hand, Blockbuster is also observed to face issues related with social media
marketing as the company failed to adapt with changing consumer needs and Netflix
attained competitive advantages over these companies. It has been observed that there
has been a theoretical situation of drastic rise in e-training at the expense of the high
street that has resulted in traditional entertainment companies like HMV and
Blockbuster to develop inline streaming services for market survival.
Netflix established in the year 1998 that was headquartered in California that
positioned its online streaming business as the major internet television network.
Initially, the company started its DVD renting services and then shifted to online
steaming services in the year 2007. With constantly developing its social media use,
Netflix has attained around 74 million subscribers in over 90 nations where the

5SOCIAL MEDIA USE BY NETFLIX INFLUENCED BY HMV AND BLOCKBUSTER
individuals can take pleasure of enjoying around 2 hours of TV serials and movies
(Alexander and Gentry 2014). The TV serials streamed by Netflix each month that
includes original series, featured movies and documentaries. The subscribed members
of Netflix can attain access to watch their most preferred serials with no time and place
limits within any internet enabled devices.
Members of this online streaming company is able to attain full control over the
series as they are able to play, stop, forward, pause, rewind and resume without facing
any advertisement or commercials disruptions (Allen, Feils and Disbrow 2014). The
major social media promotion strategy of Netflix in order to attain competitive
advantages over traditional entertainment service providers such as HMV and
Blockbuster is through widening the streamlining business globally within the operating
segment targets. Netflix is placed on the top position within the online streaming
services because of its low pricing strategy, highly captivating social media content
based promotions and the convenient services in contrast to traditional entertainment
service providers (Andrews and Shimp 2017). The purpose of the report is to analyse
the ways in which the social media activities implemented by Netflix is influenced by
HMV and Blockbuster. Additionally, the report also intends to analyse the business
environment within which these companies operate in developing suitable strategic
recommendations for HMV and Blockbuster to attain competitive edge.
The External Business Environment
The external business environment is analysed in order to evaluate the external
business environment factors has facilitated the entertainment organizations in

6SOCIAL MEDIA USE BY NETFLIX INFLUENCED BY HMV AND BLOCKBUSTER
positioning itself as one of the largest internet companies within the online streaming
entertainment sector. Baugher and Ramos (2014) revealed that there is trend of
increased eco-consumerism culture that has pushed online and digital services in
opposition to acquiring services from traditional sources. The economic business
environment indicated that the subscription fees tend to make the online streaming
services unaffordable for certain potential consumers with low income. In responding to
such scenario, several online entertainment organizations have made several attempts
to solve such concern by developing certain effective subscription models. In analysing
the technological business environment where online entertainment organizations offers
their online streaming services and develops engaging social media content, elucidated
that there is increased availability of quality internet services (Berry 2016).
This is observed to impact the potential consumers experience along with
satisfaction with service provided by online entertainment organizations. The online
entertainment organizations are observed to operate within an oligopolistic industry in
which they deal with certain barriers to enter new market that includes licensing of
content and acquiring required services to the host content. Several new online
streaming entrants are imposing indirect competition to online entertainment
organizations through entering into on-demand streaming market to sustain the
challenging social media market (Brown and Dant 2014). The traditional entertainment
service providers are observed to imitate the innovative business models of online
entertainment organizations such introduction of Shomi and Crave TV within Canadian
social media marketplace. This has resulted in online entertainment organizations to
ensure recognition of market trends that favours digital on demand. Considering the

7SOCIAL MEDIA USE BY NETFLIX INFLUENCED BY HMV AND BLOCKBUSTER
same, Brown and Dant (2014) have revealed that despite such fiercely competitive
business environment, the online entertainment organizations has established its
reputation, market domination and brand equity within the digital streaming realm and
the social media platform that contributed to failure of the traditional entertainment
organizations.
Problem to be addressed in this Report
From analysing the case of HMV and Blockbuster failure through business
environment analysis it will be analysed the way in which Netflix is developing
exceptional social media content and has captured high market share over the recent
years that has imposed threat to the traditional entertainment approaches of
Blockbuster and HMV. The social media strategies of Blockbuster failed as it did not
believe in offering online subscription services and did not consider digital social media
strategies and did not change its traditional advertising strategies. The report
completion has the objective to have useful implications in recommending social media
promoting activates those are to be considered by HMV and Blockbuster in attaining
comparative edge and effective social media presence.
Report Objectives
The SMART objectives developed for analysing the extent of social media use by
Netflix has influenced the activities of Blockbuster and HMV are indicated below:
 To establish the Netflix’s use of social media encompassing a timeframe
 To establishing the activities of HMV and Blockbuster along with outlining their
approach to marketing

8SOCIAL MEDIA USE BY NETFLIX INFLUENCED BY HMV AND BLOCKBUSTER
 To analyse the market share of HMV and Blockbuster through employing a
timeline
Considering the objectives set above, the report will evaluate the social media
existence of Netflix and its impact on HMV and Blockbuster based on which suitable
recommendations will be offered to enhance online promotional activities of these
companies.
1.2. Research Methods and Sources
Theory, Models and Concepts to be Used
Certain effective theories and models have been considered to be used in
analysing the factors based on which Netflix social media use attained competitive
advantages over traditional entertainment sites such as HMV and Blockbuster. These
theories include SWOT analysis, Porters Five Forces and PESTEL analysis that serves
as effective analysis tools for attaining a detailed viewpoint on the internal as well as
external business factors those might represent business growth opportunities or
threats to Netflix (Dass and Kumar 2014). SWOT analysis tool facilitates an
organization to recognise its internal weaknesses and strengths along with the external
opportunities and threats. Porters Five Forces Analysis acts as a framework for
analysing business competition along with determining the competitive intensity and
attractiveness of the industry. PESTEL analysis tool acts as a framework of analysing
the macro-environmental factors employed within environmental scanning aspect of
strategic management (Dias and Navarro 2018).
Source Validation for Analysing Contribution to Findings

9SOCIAL MEDIA USE BY NETFLIX INFLUENCED BY HMV AND BLOCKBUSTER
The sources those were employed facilitated in contributing to the findings
gathered in the research focussed on analysing the extent of social media use by Netflix
has influenced the activities of Blockbuster and HMV (Dixon et al. 2014). The source
from which the literature on social media use by several companies was exacted was
highly credible and was derived from the authentic peer reviewed journals. This
facilitated in developing necessary argumentative findings on the business environment
within which Netflix, Blockbuster and HMV operates along with their social media
activities employed to attain competitive edge.
Type of Research Chosen and Justification
Literature review based research have been selected for analysing the analysing the
extent of social media use by Netflix has influenced the activities of Blockbuster and
HMV (Jenner 2016). Such research method is employed in analysing the study subject
selected as it has facilitated in carrying out analysis based on the experience and
observation. Empirical research is also justified to be used as it facilitates in
authentication of traditional research through attaining understanding on dynamic
situations by means of employing necessary analytical and observational skills.
Literature Review
Dass and Kumar (2014) explained “the death of high street” to be the way in
which the internet has causes shops to close. This theory explains that the traditional
retailers of UK are observed to face serious threat of failure because of increasing trend
of e-commerce in the market. As per this theory it has been observed that the growth of
e-commerce is impressive because of which a large number of companies are moving

10SOCIAL MEDIA USE BY NETFLIX INFLUENCED BY HMV AND BLOCKBUSTER
their traditional business online through internet for making shopping experience of
consumers convenient.
Figure 1: Social Media Use and Market Share Analysis of Netflix, HMV and
Blockbuster using a Timeline
(Source: Berman 2016)
From analysing “the death of high street” theory and the timeline indicated above,
certain case studies related to entertainment industry has been analysed where
Blockbuster turned out to be an example of digital distraction that became bankrupt
because of its faulty digital marketing strategy in comparison to Netflix. The business
model of Blockbuster faced the risks of innovation and did not consider dominating the
emerging social media trends through entering the online straitening industry. Kotler,
Kartajaya and Setiawan (2016) stated that HMV is planning to compete with rising
Netflix
established-
1997
Netflix
introduced
monthy
subscription-
1999
Netflix
reachedBloc
kbuster
forstrategic
partnerhip-
2000
Netflix
increase in
subscribers-
2005
Netflix
introduced
video on
demand on
intenet- 2007
HMV and
Blockbuster
used
traditiona
methids and
failed- 2010
Netflix
attained high
market share
than HMV
and
Blockbuster-
2011
Blockbuster
and HMV
social media
strategies
failed and
Netflix
operations
suceeded-
2014

11SOCIAL MEDIA USE BY NETFLIX INFLUENCED BY HMV AND BLOCKBUSTER
demand of Netflix online streaming service and popular of its social media strategy
through planning a raft of digital marketing services. From the existing literature it has
been observed that in the year 2000, Netflix approached Blockbuster for becoming
strategic partners (Kartajaya and Setiawan 2016). However, the company refused such
offer and observed poor progress in social media marketing strategy. Moreover,
Blockbuster failed to adapt as per “the death of high street” theory into the online
streaming market and offered their services in traditional medium, whereas Netflix
attracted “niche” market through offering online steaming services and grabbed all the
consumers of Blockbuster and making it bankrupt. This resulted in failure of
Blockbuster.
Netflix and Blockbuster were two companies within same industry among which
Netflix adapted with new technologies and social media opportunities and Blockbuster
did not change its old business model of traditional entertainment options. This fetched
Netflix high competitive advantages over the company. In contrast, Kotler, Kartajaya
and Setiawan (2016) elucidated that over the years from 2007 to 2014, Netflix attained
20 million online subscribers with attaining growth of 32.3% increase in market shares
over years becoming an industry leader. To deal with such competition, the activities of
HMV and Blockbuster is to improve its losing market share position through introducing
and promoting digital versions of film and music in the social media channels such as
YouTube, Face book, Twitter and Face book. Kotler, Kartajaya and Setiawan (2016)
added that HMV and Blockbuster is making a better attempt to evolve its social media
use strategies in striving to attain better market shares than Netflix. They are focussed
on innovating their streaming sites with offering huge product ranges within a monthly