Blockbuster Inc – NetflixStrategyNetflixBlockbuster Inc, became the leader in the movie rentals industry. Per the article, “Netflix in 2011,” “statistics showed that the new release represented over 70% of total rentals. It’s growth strategy revolved around opening new locations, both to expand geographic coverage and to increase penetration and share in existing markets. By 2006, Blockbuster had 5,194 US locations of which 4,255 were company owned the balance franchised.” Blockbuster locations were picked on customer concentration and closeness to competition, paying close attention to high-visibility stores in impacted trafficked retail areas. Another competitive advantage is it would hire mostly part-time employees, with minimal staffing. Blockbuster used the “purchase model,” to acquire half of their revenue, where it would pay the studios a fee, rent it 9-10 times for a lesser amount, then resell the DVD for an average amount per unit. The other half of revenue used the “revenue share model,” where Blockbuster would pay the studio a certain amount for it copy, rented it 9 times, and resold for an average amount, sharing 30% of the revenue with the studios. But, in 2002 Blockbuster had record high profits and sales, riding a wave of consumer DVD-player adoption.
Per the article, “Netflix targeted early technology adopters who had recently purchased DVD players, offering cross-promotional programs with the manufacturers and sellers of DVD players, thus providing a source of content for customers. At the time our goals were just to get our coupon in the box. We didn’t have too much competition. The market was underserved, and stores didn’t carry a wide selection of DVD’s at the time.” Initially, Netflix’s website used a search engine that allowed customers to view different movies by various methods, then they created a list, based on the list a movie was delivered as a previous one was returned. It had a strategy, it targets even nonsubscribers, creating a Web portal rather than simply a subscription service.
In February of 2014, Netflix moved to stop using a similar name. In August, it took the opportunity to step back and rethink its history in order to reflect the evolving business, which was already in flux and in demand. The company launched the company’s first Web video-torrent service, The Pirate Bay, which made streaming videos from popular content sites such as YouTube. On October 8th, 2012 Netflix started distributing ads to the users of its various social media sites: Vimeo, YouTube, Tumblr. The ad campaign targeted customers that visited the sites, which were popular with older users and with new ones looking for a way to get into the game of video-game games. To get their attention, the customers began paying, via the site’s website, for information on movies and TV shows. These paid ad slots were also used on other services such as TIGER and Vimeo. When the ad campaign ended, users were redirected to the page with a new ad spot. The service, which Netflix calls “The Play Store,” added more of its original content to the site in the span of a month, allowing customers to watch multiple movies over more than a certain number of visits. It also added a new feature, called QuickPlay, which allowed users to browse a few of their favourite websites directly on their iPad with an iTunes store. The service was launched in February of 2015 and is listed on Netflix.com as being the first paid streaming video service ever by Netflix. The service also was purchased by Time Warner, who gave it to Netflix shortly after its launch. In April of 2015, Netflix partnered with Digg as the biggest U.S. social experiment as they began to test out a new media platform. The new service was named Facebook Instant Video in June 2016, then the original social video service was named WhatsApp. This time, at least 16 of the 19 social services on Facebook Instant Video were in the U.S. market, which was a record and was set in late January, 2017.
This new strategy has been effective. Within a matter of months, nearly 7 million people use Facebook Instant Video on a daily basis. The average user spends a week watching Facebook.com on every single day. The number of users accessing Facebook Instant Video grew by 1% in the beginning of 2014. Now users are spending up to 300 hours and are spending up to 12 hours watching Facebook. The number of daily viewing users has gone up over 1,000%. For the first time since 2009, the number of daily users has gone up three tiers. These people tend to purchase new services without being able to pay for them. The number of people viewing Facebook on a daily basis has gone down by almost 1.1% since last year.
In the latest case, Netflix had successfully positioned the company in the United States. The movie site, Netflix Instant Video, was purchased by the studio-owned company earlier this month. The original streaming video service