Netflix case study Essay

Netflix offers online painting streaming and videodisc rental services for a flat fee to all subscribers. after Reed battle of battle of Hastings, the CEO of Netflix had announced the companys new system of separating its online service and DVD rental services into two accounts for its subscribers, the companys stock fell to $63 per sh are from $300 per share and broken 805,000 subscribers in three month. Although face up so many challenges, Reed Hastings contract to continue his new strategies, but with a sincerely let off for the change and a detailed explanation of why they made this last and whats in it for current subscribers. Stock price of Netflix close on yesterday was 312.40.Problems and challenges Although it seems that Netflix has recovered from the separation strategy, but there still are some riddles and challenges are checking for the company. First of all, Netflix online streaming branch is facing fierce competition from companies like amazon instant video, YouTube, iTunes store, and Hulu. Second, On-demand TV offer are now hot area, many big- fee TV operator such as Verizon and Comcast Corp are trying to withdraw on-demand TV to line of credit users which will offer fresher content than online streaming companies like Netflix. deuce-ace of all, The DVD rental branch called Qwikster are now competing with companies like virago and Redbox DVD rental. From what we can see in the future, DVD service whitethorn finally run out of caper and how to minimize the damage to Netflix is a big problem waiting for a solution.SWOTStrengthNetflix is religious offering a flat fee policy, which is cheaper than Amazon and iTunes users and is easier to retain current users. A very distinctive strength Netflix have is that Netflix is also a producer. In this years Emmy Awards, Netflix Incs groundbreaking political thriller House of card gametook home an award for directing. As its name shows in Emmy, Netflix may captivate not only an award, but ma ny potential users. Many sight may position Netflix as a company provides high note shows than other video distributors.WeaknessAlthough the stock price has gone up this year and everyone now hypothesises Reed Hastings is the one sees the future, the remaining problem is how to survive with a $7.99 monthly flat fee for subscribers and at the same time dismissing more than $5 billion for the next fiver years to purchase TV shows and Movie License. Customers always wants more and pay less. Huge amount of spending force Netflix to attract new users in a rapid speed, but attract new users itself will be another big spending. Although the original drama house of cards generated a big buzz for Netflix, but the cost is considerable.OpportunitiesNew technologies bring opportunities to online streaming video companies. Netflix has energetic app for both Android and ios system and it works well. pack want to access to on-demand videos more convenient by using mobile phone and tablets. The trend of globalization gives Netflix the opportunity to grow itself. The fourth drag of 2012, Netflix gained 3 million new global subscribers.ThreatCompetition from Amazon, iTunes, Hulu, Google TV, and agate line networks may pose threat to the company. secure BEALE, Director of digital video content acquisition of Amazon is known for its ability of picking up successful shows and get the license earlier than other companies. Hulu also spend a lot on bringing new contents in. Although Netflix is cheaper, Amazon offers free instant vedio to prime membership and two-day free shipping for its customers. Also, Amazon, orchard apple tree and Google now all offer their own devices for video streaming, such as Apple TV, Kindle Fire. QuestionsQ.1. A strong consumer backlash emerged in reply to major changes in Netflixs business model. What are some of the arguments in favor of Hasting decision to split the company? What decisions and options are available to Hastings? Were they ef fective decisions? 2- 3 paragraphs Many believe DVD rental business is fading because of new technologies. People no longer want to wait for the DVD to arrive. Instead they want on-demand video services. Slip the company bring price lower for stream only customers and it is fair for them to pay for cheaper price. assign in account information is easier and benefit is longer. Hastings can choose to change the company back to the old model by listen to customers and close the DVD service a couple years after when the DVD rental industry lost all the business. I think its good decisions because the financial information shows that Reed Hastings made the good decision and wins the game. The r neverthelessue grow almost half and subscribers grow even more this year. Works CitedLaporte, N. (2013, July 1). A TALE OF TWO NETFLIX. Fast Comapny , 177, pp. 31-32. Mint. (2013, family line 23). Breaking Bad, Modern Family win top Emmy Awards. (H. M. Ltd., Producer) Retrieved Septemner 29, 2013 , from Mint http//search.proquest.com.rlib.pace.edu/docview/1434860801?accountid=13044 Peterson, T. (2013, September 23). 2013 MEDIA MAVENS BRAD BEALE. Advertising Age , 84 (33), p. 1. Ramachadran, S. (2013, September 20). Cable Fights to Feed glut TV Viewers Comcast, Verizon FiOS Vie With Netflix, Amazon for Rights to Show Complete Series. (Dow Jones & fellowship Inc) Retrieved September 30, 2013, from Wall Street Journal http//search.proquest.com.rlib.pace.edu/docview/1434160601?accountid=13044View as multi-pages