Netflix: The US DVD Rental Company's Competitive Strategies



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Code : COM0054

Year :
2005

Industry : Internet and e-commerce

Region : USA

Teaching Note:Available

Structured Assignment :Available

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Netflix The Innovative Business Model The DVD rental industry in US had grown from $1 billion in 2003 to $5.7 billion in 2004. It was predicted that over 464 million homes would have DVD players by the end of 2009 (compared to 435 million with VCRs). And, with the expected increase in the expenditure on electronic media and entertainment (from $100 billion in 2002 to over $120 billion by 2010) in US, the DVD rental industry appeared to be a promising market...

Increasing Competition The growing popularity of Netflix affected the sales of traditional video rental chains like Blockbuster. Even though the number of Netflix subscribers was only about a fraction of the 25 million people who visited Blockbuster, the company was adding new subscribers at a rapid rate...

Challenges Ahead Analysts predicted that video-on-demand would pose the greatest threat to movie rental business in the future. Cable providers such as Comcast and AOL Time Warner were testing different video-on-demand services in various markets. Forrester Research Inc. estimated that by 2007, more than 30 million people would have access to video-on-demand through their cable or satellite service...

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