Blockbuster vs. Netflix: Which Will Win Out?

Topics: Renting, Rental shop, Blockbuster Inc. Pages: 6 (2151 words) Published: December 7, 2010
Q2: Block buster was the business leader for movie rentals for a long time until Netflix came up with a new business model and introduced an online Video/DVD rentals for lower cost and no late fees. Netflix was a forerunner (First in business) and rapidly gained ground on movie rental business. Netflix could efficiently reach customers and conveniently deliver movies to their doors with less overhead cost and bigger variety of choices. Putting Blockbuster stores in a tough position to complete. Blockbuster and Wall Mart both tried to complete by following suit but have not been successful. And now with coming of downloadable movies through other “Network providers” and “Apple” competition has become more complex and vital for Blockbuster.

Q4: Netflix has been so far quite successful in its business strategy, compare to ‘mom an pops stores’ and Blockbuster for that matter. However, with rapid improvement of digital technology and movie on demand they may face some challenges and may loose some of their business to newer technology such as offering of downloadable and writable DVDs. So far Netflix has the brand name recognition, clientele and subscribers that can follow the company with any new method of movie delivery that Netflix can offer. Company just needs to be quick and efficient in offering downloadable movie option, and not to loose much of the market share.

Q5: Chances of succeeding for Blockbuster or Netflix on this business depends on how fast they can capture larger market share with the help of the latest technology, who can offer more options and availability of new releases as well as hard to find movies... They need to be on top of their ‘technology game’ and invest on new means of delivery as well as movie rental per see. IT plays a great role in their business and their viability depends on how adaptive they are and how creative they are in using information technology to their advantage. 1. Blockbuster's business model is the rental and sale of movies primarily at retail locations. Its main source of distributing its service and products is through its many bricks-and-mortar locations throughout 25 countries. However, since the emergence of Netflix, it also began an online subscription service in attempt to keep its large share in the movie rental market. The new business model has had mixed reviews. Netflix has more subscribers than Blockbuster's Movie Pass subscribers and is more user friendly. Blockbuster has also lost revenue from implementing its "No More Late Fees" campaign.

4. Netflix has become quite successful over the past 10 years. It has become the number one online movie rental service. It's online ordering and delivery through the mail has drastically changed the movie rental industry. Its business model eliminated the need for physical locations, which eliminates a large fixed cost. Currently, Netflix has over six million subscribers and continues to grow.

5. I think that both businesses will lose revenue from the new movie distributors emerging; VOD technology, Movielink, Apple and Amazon. Blockbuster will suffer the most because it has a large fixed cost from its thousands of physical locations around the world. Blockbuster has already closed several locations and continues to see increased losses. The entrance of these new competitors might be the end to Blockbuster. Its subscription service is inferior to Netflix and there is little growth potential for this bricks-and-mortar business today. Question 1.

Blockbuster has emerged as a video rental business in 1985, and until 2004 its business model has been to open up as many "brick-and-mortar" stores across the country as possible.Until online movie rental companies started coming into play in the late 1990s, Blockbuster's business model proved to be very successful: according to the case study, Blockbuster possessed a 40% market share of the video rental industry in 2004. Question 2.

Several industry and technology forces...
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