The use of PEST on Netflix
Traditional Video Rental Stores involves brick and mortar stores are normally located in strategic locations and are usually staffed by around 12 employees depending on the size of the video store. These stores usually carry about 1000 titles of VHS and DVD format and most of the time requires owning all of it VHS and DVD outright. The rentals are limited to physical inventory and some titles excess inventory may be sold at a loss depending on popularity of the titles (Video Rental Developments and the Supply Chain: Netflix, Inc 2005).
The Online DVD Rental Industry is new and growing rapidly. Online DVD rentals are very popular. Netflix is the founder of online DVD rentals. The lack of late fees or due dates has, without a doubt, quickly made these services highly desirable.
Netflix offers over 13,500 DVD movie titles for its subscribers to choose from. Selections include classics to new releases, including many independent, foreign and documentary films (Basile, Cutter, Kendall & Powell 2003).
WTO has declared the Internet to be a tax-free environment for delivering goods and services and declaring that no new tax policies be imposed on Internet commerce in order to develop a "uniform commercial code" for electronic commerce. This tax-free environment encourages the growth of e-commerce and was advocated by The Clinton Administration (McLoughlin 2002).
Cinematch program contains 29,000 unique lines of code with a database of 180 million film critics and ratings. It adds fun to the Netflix site and adds the film community to a DVD rental site. Paramount movies is a sister company to Blockbuster Video. Cinematch never recommend movies from Paramount because it does not have an agreement with Netflix due to the conflict of interest with Blockbuster. Paramount movies are still lent out but will never appear on rental recommendation lists. This is interesting on how politics enters into what...
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E-Business Strategies Incorporated 2002, Case Insight Netflix: Transforming the DVD Rental Business, E-Business Strategies Incorporated, Georgia, USA.
Glenn J McLoughlin 2002, CRS Report for Congress Electronic Commerce: An Introduction 2002, Congressional Research Service, The Library of Congress, USA
Shauna Basile, Lisa Cutter, Karen Kendall & Tammy Powell 2003, A Case Study of Online Business Strategy for Netflix.com and Booksfree.com; Implications for the Online Entertainment Rental Industry [Online], Available: http://www.booksfree.com/IndustryReport.html, [Accessed 18th October2005]
Video Rental Developments and the Supply Chain: Netflix, Inc (n.d.) [Online], Available: http://www.olin.wustl.edu/workingpapers/pdf/2004-03-225.pdf, [Accessed 15th September 2005]
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