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Lecture 3

RSM251H1 Lecture Notes - Lecture 3: Video On Demand, Cinemanow, Snail Mail

1 pages112 viewsSpring 2018

Department
Rotman Commerce
Course Code
RSM251H1
Professor
Claire I.Tsai
Lecture
3

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Netflix Case Analysis
History:!
-founded in 1997!
-oered DVD home delivery using snail mail!
-little to no competition for DVD rentals, closest competitor: VHS!
-‘no late fees policy’ launched due to high fees/slow delivery !
-unlimited rentals!
-keep 4 DVDs at a time!
-2001: announced intention to create a VOD business !
-2007: $1b business, $64M in cashflow !
-Video on Demand (VOD), pay per view and streaming gaining popularity !
-substantial investments: $10M (2006), $40M (2007)!
-limitation: computer to TV connectivity, access to online content —> evolving quickly tho!
SWOT Analysis!
-Strengths!
-Existing Subscription Model!
-unique recommendation system !
-large DVD selection for online rental !
-fast delivery !
-Weaknesses!
-diculties meeting demand for new hardcopy releases !
-subscription plan only attractive to frequent renters (does not appeal to less frequent
users)!
-DVDs damaged/lost in transit!
-only operating in the DVD segment with so much potential in VOD!
-Opportunities!
-international expansion !
-VOD expansion !
-original Netflix content !
-new product lines: video games, educational material, etc.!
-alternative subscription models to appeal to less frequent movie renters!
-Threats!
-Blockbuster!
-other VOD competitors !
-Vongo!
-CinemaNow!
-MovieBeam!
-MovieLink!
-Traditional Cable/Satellite Providers!
-VOD content prices/availability !
-limited VOD content: studios concerned about pirating and cannibalizing DVD sales
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