Nf Lost

Topics: Video on demand, Renting, Streaming media Pages: 6 (1882 words) Published: April 21, 2013 for strength n weakmess
IMP technology

Executive Summary
VODISNOWHERE. What do you see from the block of letters? Is it “VOD IS NOWHERE” or “VOD IS NOW HERE”? You are right if you guess the former and latter. That depicts the fast pace of technological development. VOD, which refers to Video-on-Demand, is the recent video streaming technology where pay-per-view programming merges with Internet downloading. Netflix, an online subscription-based DVD rental company, entered the video industry with disruptive technology of offering online video rental while the incumbent competitors like Blockbuster were offering retail rentals. The incumbent competitors eventually followed Netflix’s direction when their core competencies were sabotaged by Netflix’s strategy. Moreover, Netflix was a technological leader that invested in new technologies like VOD.

In this case study, we would be using SWOT method to analyze on Netflix Case. Discussing on its strengths and weaknesses, in particular to its survival in the hyper competition of video industry where there are dynamic and complex uncertainties and competitive advantages are not sustainable and also Netflix’s surrounding opportunities and threats with regard to VOD. We would be analyzing on possible alternatives on how Netflix can take up VOD market and end the report with a recommendation for Netflix.

Problem Statement
Video-on-demand (VOD), a service that allows users to select and watch video and clip content over a network as part of an interactive television system, is going to be the next biggest thing in the internet. It is going to become a norm in the industry or public and also a threat to Netflix existing business model, an online subscription-based DVD rental service, which depends on the internet to send out physical DVDs to their customers. How should Netflix enter the online video market? Any decision made on this issue would impact not just the Netflix existing business model but its ability to sustain its position as a giant in the media industry.

But before we go into an in depth discussion, we first present Netflix’s current strengths, weaknesses, opportunities and threats and reveal some of their strategies used so far. After this we can be in a better position to determine how Netflix should respond to the Video On Demand trend.

Strengths of Netflix
Netflix offers prepaid subscription service whereby customers only need to sign up and pay a fixed subscription fee a month for unlimited rentals. Customers will now have no more worry of returning their movies late, as Netflix has cancelled the late-fee system. This model enables Netflix to justify its slower delivery time in comparison to Blockbuster brick-and-mortar model. Instead of making it difficult for customers to unsubscribe its service, Netflix made the unsubscription process relatively easy and adopting the strategy of reclaiming churned customers rather than forcing dissatisfied customers to stay.

Netflix also offers a web portal with powerful features such as a proprietary recommendation system that was very accurate in recommendations, due to exploiting the knowledge of the choices made by the masses...
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