1. What do you believe are the most significant long-term threats to Netflix? Ho

Question

1. What do you believe are the most significant long-term threats to Netflix? How is Netflix trying to address these threats? What obstacles does the firm face in dealing with these threats?

2. Who are the rivals to Netflix’s “Watch Now” effort? Do any of these firms have advantages that Netflix lacks? What are these advantages?

3. Why would a manufacturer of DVD players be motivated to offer the Netflix “Watch Now” feature in its products?

4. Describe various revenue models available as video content shifts from atoms to bits. What are the advantages and disadvantages to each—for consumers, for studios, for middlemen like television networks and Netflix?

5. Wal-Mart backed out of the DVD-by-mail industry. Why does the firm continue to have so much influence with the major film studios? What strategic asset is Wal-Mart leveraging?

6. Investigate the firm Red Box. Do you think they are a legitimate threat to Netflix? Why or why not?

Explanation / Answer

In the long-term, Netflix will need to continue to watch the ongoing switch from atoms to bits. Netflix is a company that rents DVD’s (atoms) out to their customers and if customers no longer want their tangible product and want more intangible (bits) movies the company could face a major downfall. In an attempt to address this threat, Netflix created a software platform that allows other companies to include a Netflix application into their product. This not only promotes Netflix but the other company receives additional recognition as well. The major obstacle Netflix will continue to face will be in acquiring digital distribution rights to their movies. Since studios are so reluctant in giving rights away this will only slow Netflix down in trying to stay above the competition during the atoms to bits switch. Please post the rest in next post

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