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NETFLIX:Leading With Data
The Emergence of Data-Driven Video
Analysis by:Stephanie Curry| MS5101
Business Intelligence
Describe the Netflix business model.
• Who are their three main customer groups? How do the differences in these groups affect the type of movies they want?
• What are the key strengths and weaknesses in their business model?
• How did their model differ from Blockbuster? If you were Blockbuster, how could you have responded?
1
Pick a subscriptionRanging from $4.99-$16.99
3
Get it when you want itfree delivery in around 1 business day.
5
Exchange movies from your queAll you have to do is return 1 to get one.
2
Create a movie queSelect from over 100,000
television and movie titles.
4
Keep as long as you likewith no late fees
Bonus Streaming**
Watch certain movies on your TV with internet at
anytime
NETFLIX BUSINESS MODEL
For the moviegoer who likes the convenience of free delivery
CONVENIENCE
➔ Getting movies they could keep as
long as they wanted
➔ Quick delivery service
For the movie enthusiast who likes a vast selection
SELECTION
➔ Flat rate subscription with no late
fees
➔ Able to rent up to 5 DVD’s at a time
➔ No limit to how many DVD’s could be
rented in a month
For the movie fan who gets a bargain and can watch 10 or movies for a flat monthly
fee
PRICE
➔ Wide selection of movie content
MAIN CUSTOMER GROUPS
NETFLIX WEAKNESSES
★ No actual retail locations★ Slow and cumbersome ★ Can’t just pick up a get a movie from the store★ Stiff competition for digital distribution★ Trying to build distribution with limited
bandwidth of home internet connections
NETFLIX STRENGTHS
★ Strong brand recognition ★ Flexibility ★ Exposure to broad range of movies★ Pricing★ Cinematch recommendation system★ No late fees
OVERALL SCOPE NETFLIX
❏ Pay-per-rent video model❏ Late fees incurred ❏ Sold video games and snacks❏ Brick and Mortar stores
*Where Blockbuster Failed*Reactionary response
Failure to innovate
First Blockbuster Opens
Blockbuster opens in Dallas
1985
Netflix is Founded
Founded by Reed Hastings
1998
Blockbuster makes a series of bad
decisions
Blockbuster continues reactionary decisions ultimately causing the company to go bankrupt (2010)
2002 and
Beyond
Blockbuster declines to buy Netflix
Opt instead to partner with Enron Broadcast Services
2002
Blockbuster VS. Netflix
❏ Home delivery video model❏ No late fees❏ No due dates
What would have Stephanie Curry CEO, Blockbuster done?
★ Stay with Blockbuster Total Access ★ Strengthen relations with content creators to garner exclusivity and premium content from Blockbuster only ★ Research the competition using data and analytics ★ Ask the consumers and get them to engage in the company but using social platforms.
Blockbuster VS. Netflix
2003
Netflix post first profit, earns $6.5 million on revenues of $272 million
2000
Blockbuster declines offer to acquire Netflix for $50 million
1998
Reed Hastings and Marc Rudolph found Netflix
1997
Reed Hastings returns Apollo 13 to Blockbuster six weeks overdue. Late
fees incurred $40
2007
Netflix delivers its one billionth DVD
WORK CITED
Satell, G. (2014, September 21). A Look Back At Why Blockbuster Really Failed And Why It Didn't Have To. Retrieved February 11, 2018, from https://www.forbes.com/sites/gregsatell/2014/09/05/a-look-back-at-why-blockbuster-really-failed-and-why-it-didnt-have-to/#2f2a6ac31d64
Walker, R., Jeffery, M., So, L., Sriram, S., Nathanson, J., Ferreira, J., & Feldmeier, J. (2010). Netflix Leading with Data: The Emergence of Data-Driven Video. doi:10.4135/9781473959972
Carr, A. (2012, July 30). Blockbuster Bankruptcy: A Decade of Decline. Retrieved February 11, 2018, from https://www.fastcompany.com/1690654/blockbuster-bankruptcy-decade-decline
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