Netflix Company Background
Netflix, Inc.
Company Background
Netflix, Inc. is the world’s leading Internet television network with over 50 million members in nearly 50 countries. The American based company provides on demand internet streaming media.
Netflix was founded by co-workers Reed Hastings and Marc Randolph in 1997. The aim of Netflix was to provide a DVD postal service for rental through a traditional pay-per-rental model.
In 1999, Netflix launched a subscription service which offered members unlimited rentals for one low monthly subscription. In 2000, Netflix planned for an acquisition of Blockbuster for $50 million. Blockbuster however, declined this offer.
In 2002, Netflix issued its initial public offering. This involved selling nearly 6.75 million shares
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Comcast and Blockbuster offer these services, so I expect these two companies along with Netflix to continue to out date the rental businesses. Blockbuster has stated that the rental market is worth up to $10 billion.
Movie studios are the main suppliers for the home entertainment industry. There are six main studios that dominate most of theatrical release sales. These include Warner Bros, Buena Vista, Sony Picture, Paramount Pictures, Universal and 20th Century Fox. Other smaller suppliers do exist but only make up less than half of the market. These smaller suppliers have fewer releases and less movie titles making it difficult to compete. Netflix claims to make between 60% and 70% of independent suppliers post theatrical release
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Netflix satisfy their 50 million subscribers with over 100,000 DVD titles through an internet based subscription model and mail service. This gives Netflix a competitive advantage. There are no DVD rental stores that can stock over 100,000 DVD’s which makes Netflix so attractive to customers. DVD outlet stores generally only stock new released movies, while Netflix can offer new and old movies simultaneously. Technology allows customers to select their movie of choice very easily.
As Netflix has continued to grow, it has been made available on a multitude of media devices, at the touch of a few buttons. Such devices include Sony PS3, Microsoft XBOX 360, internet connected TV’s, Android devices, Apple devices and Google TV. The Netflix business model allows customers to conveniently obtain DVD’s to their address which gives Netflix a competitive
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