Netflix Case Study

Topics: Streaming media, Renting, Internet television / Pages: 23 (7776 words) / Published: Apr 28th, 2014
MGT872: Business Policy and Planning
Dr. Wissam Al Hussaini

Group 3
Siham Kibbe Batoul Hijazi Hind Makarem
Bahaa Tabbarah Mohammad Elmogharbel
Table of Contents

Company Overview
The idea behind Netflix, the most popular provider of online and by-mail rental services, came from an unsatisfied, embarrassed customer. Reed Hastings, founder and current CEO of Netflix, was charged 40$ as a late fee because he returned the movie Appolo13 six weeks late (Zarafshar, 2013). This made him think creatively about an idea to transform the movie rental model into a more innovative business.
In 1997, Hastings and Randolph started Netflix which was a DVD rental-by-mail business with no subscriptions. Later in 1999, and as a step further towards developing the business, Hastings launched the subscription-based business model which was based only on renting DVDs by mail with multiple plans dependent on the number of titles at a time. Netflix offered its subscribers to choose from its extensive DVD library with more than 120,000 titles for unlimited monthly DVD rental with free shipping as well as zero late and per title rental fees. It was very attractive for customers to make subscriptions on the spot as they were tempted with the incredible Netflix service. For example, Blockbuster subscribers found Netflix 's offers more appealing and it was easy for them to make the switch. (Wikipedia, 2014)
Netflix has been always open to new opportunities that Hastings believes it will sustain the company 's competitive advantage. A new opportunity was captured when the streaming service was introduced in January 2007 where it enabled Netflix 's subscribers to instantly watch movies, TV-episodes, documentaries, series and much more on internet-connected devices such as smart TVs, PCs, DVRs, Blu-Ray players and special Netflix players. During that time, Netflix was leading the industry as it was the first company to offer paid



References: Thompson (2012) - Netflix in 2012: Can It Recover from Its strategy Missteps? Thompson, A. A. (2012). Welch (Jan, 2014) Netflix’s momentum continues with 2.33 million new US customers in Q4. Retrieved from: http://www.theverge.com/2014/1/22/5334934/netflix-q4-2013-earnings Netflix (2014) In Wikipedia Hartung (Jan, 2013) – Netflix – The turnaround story of 2012! – Retrieved from: http://www.forbes.com/sites/adamhartung/2013/01/29/netflix-the-turnaround-story-of-2012/ Honorof (Mar,2014) Netflix vs

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