ISYS1021 Lecture Notes - Lecture 4: Vertical Integration, Disintermediation, Crystal Ball
5 Apr 2016
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Why are streaming costs so high: know that it is hard to get rid of dvd by mail. Imperfectly imitable: art highly differentiated good, companies can act together to raise prices for netflix, many other firms bidding on content more competition. More fighting back : no commercials, can vary the episode time, all in when it comes to shows not just pilot episode. House of cards double down and invest in two seasons. Attractive that they are willing to commit. Clarifying asset ownership: not owned by netflix, sony has distribution rights for house of cards (amazon picture, call it a netflix series but they only have the selective streaming rights. Could"ve bought entire rights but it would"ve been 2x more expensive: if own it they can take it to international markets. If not then the company that does can take it. Many tv"s/devices have netflix built into them: scale gives them distribution, scale influence customer experience.
