The Driving forces in a movie rental industry are the major underlying causes of changing industry and competitive conditions. Driving-forces analysis have three steps: (1) Identifying what the driving forces are
(2) Assessing driving forces which impact Netflix and Blockbuster (3) Companies making strategy judgments
Since 2000, the introduction of new technologies and electronics products had rapidly multiplied consumer opportunities to view movies 1. Increasingly numbers of households had combination DVD player/recorders, so they could easily record TV programs and movies and then replay them at their convenience. 2. Moreover, consumers were increasingly interested in watching movies on their big-screen high-definition TVs and were upgrading to BLu-ray DVD player or player/recorders; both Blu-ray and high definition technologies enabled more spectacular pictures and a significantly higher caliber in- home movie-viewing experience e.g. Netflix was predicated that the DVD formats, along with high-definition successor formats such as Blu-ray, would be the vehicle for watching content in the home for the foreseeable future. 3. Prices for wide-screen, high-definition TVs had been dropping rapidly, and picture quality was exceptionally good, if not stunning, on increasing numbers of models. e.g.
4. Recent advances in video-streaming technology were rapidly improving the prospects that VOD would emerge as the dominant movie rental channel within the next 5-10 years e.g. In January 2007, Netflix introduced an instant-watching feather for PCs that allowed subscribers to view selections from Netflix’s library of 12,000 full-enough movies and television episodes streamed over the internet directly to their PC monitors 5. LG electronics introduced a set-top box device that enabled Netflix’s instant-watching selections of movies and TV episodes to be viewed directly on subscribers’ television screens.
Regulatory influences and government...
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