Case Study Chapter 2
September 18, 2014
Reed Hastings started Netflix in 1997 after receiving a $40 late fee from a video rental store.
He quickly began thinking of ways to provide customers with movies by using a mailbased movie rental business. Hastings finally launched a subscription service with a free trial in 1999. According to research, when that first month was over, only 20 percent of the users who began the trial didn’t convert to the paid service. In 2003, Netflix became a profitable company and reached 1 million subscribers.
Netflix is now the world's leading Internet television network with over 50 million members in more than
40 countries enjoying more than one billion hours of TV shows and movies per month, including original series. For a low monthly price of $7.95. Members can play, pause and resume watching, all without commercials or commitments. In 2008, Netflix began offering instant online streaming of TV shows and movies to their subscribers who are on unlimited plans. Since then they have brought online streaming capabilities to bluray players, PS3, and HD T.V’s. Netflix has renovated how consumers watch entertainment. It provides ondemand entertainment services. Which allows viewers to be completely in control of what they watch, where they watch, and how much they watch.
More and more entertainments seekers are opting to use Netflix as their main source of entertainment instead of television. Netflix understands that consumers are now accustomed to customized products and services. Why can’t the way they watch their favorite T.V shows and movies be the same way? Netflix has allowed for viewers to have access to their favorite T.V shows on demand. Viewers also have access to viewing full seasons of their favorite shows. This in itself makes allows Netflix to be extremely competitive compared to cable. Before Netflix viewers would have to wait each week for the new episode of their favorite show. Netflix provided viewers to be able to
“binge view” on their favorite episodes. We now have access to view what we want to watch with back to back episodes, and back to back seasons.
While Netflix was originally a computeronly online accessible it has grown a great deal of added apps for every smart device available. The streaming service is accessed using smart T.Vs,
Bluray players, gaming consoles, tablets and smartphones. Basically, anything with an internet connection can access streaming T.V through Netflix.
Netflix also provides personalized entertainment. The old instant queue has now become "My
List." Every time you see a movie or TV series that you'd eventually like to watch, you can add it to your list. The more shows you watch and rate, the better and more tastespecific shows you will be recommended. This helps viewers find “hidden gems” that they would have never found and watched on their own. It almost like having a personal shopper for your entertainment.
Netflix broke all the rules of traditional T.V when it started releasing their own original series.
Netflix has produced several award nominated and award winning series such as “House of Cards” and
“Orange is the New Black”. Netflix innovatively releases each series by the season. Once again allowing viewers to “binge view” instead of having to wait week by week to find out what happens next.
May 9th 2014 Netflix made it clear to users that they were planning on increasing their prices.
All current users will be able to continue to pay the fee of $7.99 a month for the next two years. All new users will pay $8.99 monthly. Netflix say that the