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Netflix vs Blockbuster

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Netflix vs Blockbuster
Competition in the Movie Rental Industry in 2008: Netflix and Blockbuster Battle for Market Leadership

June 15, 2012

Contents
Introduction 2

Netflix 3

Inside Netflix 3

Current issues at Netflix 5

Netflix strategies 5

SWOT Analysis 6

Netflix Strengths 6

Netflix Weaknesses 6

Opportunities for Netflix 7

Threats facing Netflix 7

Application of Techniques of Strategic Analysis 8

The Five-Force Model of Competition 8

Market Position: Strategic Group Map 9

BLOCKBUSTER 10

Inside Blockbuster 10

Blockbuster SWOT Analysis 11

Strengths 11

Weaknesses 11

Opportunities 12

Threats 12

Blockbuster Business Model and Strategy 13

Industry Key Success Factors 15

Conclusion and Recommendations 15

References 19

Introduction

Movie rental companies are integrated in the entertainment industry. The 2008 market size for rentals through mail was $2,128,000,000. Streaming content and downloading movies are areas that companies dealing in movie rentals are exploring to increase revenues. Each year since 2000, there has been an increase in subscribers overall in the industry. DVD rentals through online have progressively grown from 2,000,000 customers in 2000 to approximately 12,000,000 at the end of 2008. This trend gives Internet movie rentals companies a positive outlook on future growth. The aggressive DVD rental business is swiftly changing and being influenced by the continuous advancement of video technology. The biggest change in the video rental business is the transition from store-based video rental to online video rental (Tarzijan, 2011).

In-home filmed entertainment is offered through various distribution channels such as the retail home video production, the online video industry, movie download, the cable industry, and the satellite industry. Of these distribution channels, the retail home


References: Blockbuster. (2007). Netflix vs. Blockbuster. Retrieved from https://www.socialtext.net/ism4300/netflix_vs_blockbuster. Carrigg, R. (2007). Q3 Earnings Reports and Digital Delivery Strategies Compete. Retrieved from http://blog.compete.com/2007/12/03/netflix-blockbuster-watch-instantly- online- subscription/. Tarzijan, J. (2011). Strategic Management. Retrieved from Netflix: ://freedownload.is/pdf/strategic-management-17938757.html
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