Netflix (1).pptx

Netflix (1).pptx - MIS 301 INTRODUCTION TO INFORMATION...

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Leadership MIS 301 INTRODUCTION TO INFORMATION TECHNOLOGY MANAGEMENT
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The Streaming business “We named the company Netflix for a reason; we didn’t name it DVDs-by-Mail” - Reed Hastings (Netflix founder and CEO)
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Netfix members in 2011
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Since 2011 DVD by Mail Streaming L e s t h a n 1 0 % o f r v u c m D V
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Moving From Atoms to Bits: Opportunity or Threat? Many media products created as bits (digital fles with 1s and 0s) When we buy a CD, DVD, book, or newspaper, we’re buying physical atoms that are a container For the bits Advantages oF moving From atoms to bits Net±ix will eliminate a huge chunk oF shipping and handling costs Bandwidth costs are minimal
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Let’s compare Netfix to YouTube Netflix 60 high tech Distribution Centers Larger inventory of DVD’s Cinematch technology Low cost of membership Free shipping No cost of Distribution Centers No cost of physical inventory YouTube has similar feature No cost of membership No cost of shipping
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Background Since its IPO in 2002, Netfix survived big incumbent competitors, low cost newcomers, and price wars Blockbuster used to have: 40 million U.S. customers 7,800 stores Net revenue (revenue – cost) is $4.36 billion in 2004 Blockbuster filed bankruptcy in Sep. 2010 Was acquired in April, 2011 The acquisition value is <$400 million
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Prior to July 2011 what did Netfix consider one oF it’s biggest regrets? Rivals such as Blockbuster and Wal- Mart showed up. Wal-mart within a year decides to get out Blockbuster copied Netfix exactly and… Competitors underestimated Netfix because: Internet pure play without a storeFront Give me an example please
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This document was uploaded on 12/05/2016 for the course MIS 301 at University of Texas.

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Netflix (1).pptx - MIS 301 INTRODUCTION TO INFORMATION...

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