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Netflix Case

Essay by   •  August 20, 2012  •  Case Study  •  1,374 Words (6 Pages)  •  1,575 Views

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Reed Hastings and Marc Randolph started Netflix in 1997 to offer online movie rentals. It was a very successful company up until its price increase. "Hastings definitely tried to talk a good game, explaining that the company is "not losing too much sleep" over recent events, and considers itself back on track." (Mcmillan) Netflix has many competitors. Its competitors range from online moving streaming companies to DVD rental companies and sellers of piracy copies of DVD movies. "Of all the companies that are trying to provide Netflix alternatives, there's only one company that he feels they're really in competition with: HBO Go." (Mcmillan) Its competitors are trying to offer Netflix alternatives to stay in the race. Although Netflix has not had a successful year, it is still ahead of its competitors. The graph below shows the growth that Netflix had up until September when they increased the price of Netflix.

HBO Go is a subsidiary of Time Warner Inc. It was launched in February 18, 2010. HBO Go provides subscribers Web access to the same movies HBO screens on cable TV--at no extra charge. (Sandoval) If you have the HBO conventional cable subscription than it's free. Its Internet streaming service gives subscribers access to its shows on PCs, smartphones and tablets. On October 2011, HBO Go was available through the Roku streaming player. The Roku boxes start at $50, they connect to a broadband line and display movies and TV shows from sources such as Netflix and Hulu on a TV set. Since HBO Go is a subsidiary of Time Warner Inc. We could not get detailed stock information of how the company is doing, but we included Time Warner Inc.

Blockbuster initially started in October 1985 in Dallas Texas. They started off as a DVD rental store. It had great success up until competition from other video rental companies such as Netflix. Dish Network won Blockbuster LLC (formerly Blockbuster Inc.) at auction for $223 million. With Blockbuster you can rent by mail, and it offers new releases a month before Netflix. It cost $11.99 a month. "Its monthly fee includes Blu-ray rentals and more than 3,000 video games." (Blockbuster) You can also exchange any movie in a Blockbuster store. "Netflix is an "all you can eat" plan that offers thousands of movies and TV shows for a flat monthly rate, whereas Blockbuster is a pay-per-view video-on-demand service (you rent or buy each title individually)." (Falcone) Blockbuster stock had an increase in the ending of September 2011, which is probably because of Netflix's price increase. Some Netflix customers were very upset with the price increase that they decided to cancel their membership. Blockbuster probably got some of ex Netflix members. Blockbuster even offered a promotion to current Netflix customers. If you are a current Netflix customer, switch to Blockbuster and pay just $9.99 a month, with the first month free.

Hulu Plus Company was started up in March 2007. "Hulu is operated independently by a dedicated management team with offices in Los Angeles, New York, Chicago, Seattle, Tokyo and Beijing. NBCUniversal, News Corporation, The Walt Disney Company, Providence Equity Partners and the Hulu team share in the ownership stake of the company." (Hulu) It is a company that is similar to Netflix. It gives you the convenience in being able to stream on multiple devices. It costs the same as Netflix without commitment and you can stream for $7.99 a month on devices like the Xbox 360, PS3, Roku, iPad, some Android phones and certain Blu-ray players and televisions. Hulu Plus' strengths are with television series lovers. It doesn't have a great selection of movies. Hulu is not a stand-alone company. General Electric and News Corporation back up Hulu.

Amazon Instant Video became available on September 7, 2006. It is the cheapest online streaming service per month. Its drawback it that it has the fewest devices available for playing shows on a television. Amazon Instant Video is included with Amazon Prime membership, which costs $79 a year. Prime members get the perks of free two-day shipping on website orders, and the ability to stream from about 2,543 movie and television series titles. "Our store offers instant streaming of movies and TV shows, through hundreds of devices like internet-connected TVs, Blu-ray players, set-top boxes, and Kindle Fire." (Amazon) In order to see it on a television, you'll need Google TV, a Roku player, or a compatible modern HDTV or Blu-ray player. Amazon also had an increase in September, which probably



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