Case1 - Chapter 1 READY FOR PRIMETIME Shocked at the $40...

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Chapter 1 READY FOR PRIMETIME Shocked at the $40 fee he incurred for a late return of Apollo 13 , Netflix founder Reed Hastings decided that in the age of the Internet, there had to be a better way to rent videos for home viewing. Thus, in 1997, he started an Internet-based, DVD rental service that offered direct-to-home deliveries with no late fees. A mere decade and 4 million subscribers later, Netflix has taken on established video rental companies such as Blockbuster, Hollywood Video, and Wal-Mart and emerged as the leader in innovation and customer service. In addition to betting that the Internet would be the future of the video rental market, Hastings made a few other key predictions that helped him develop a company with almost $700 million in revenue in under ten years. He watched as moviegoers fled public theaters for the comfort of home theater systems, and he observed those same consumers embracing the features, capacity, and high-quality format of the DVD. Realizing that the Internet could allow those same convenience seekers 24-hour browsing and selection access to an unprecedented volume of movie titles in a single digital catalog, Hastings shrewdly designed a service that outperforms traditional, store-based video rentals. Netflix allows consumers to choose from a variety of subscription plans. The most popular plan offers three DVDs for $17.99 per month. Once a subscriber builds a list of favorite movies and TV shows from a selection of over 60,000 titles, Netflix mails out the three titles at the top of the list, along with return-addressed prestamped envelopes. After viewing the DVDs, the customer simply mails them back to Netflix in the supplied packaging. When the titles are scanned in at one of the distribution warehouses, the customer is simultaneously sent the next selections on the favorites list. With 34 strategically placed distribution centers, Netflix can deliver 92 percent of its movies within one day of being ordered.
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This note was uploaded on 04/25/2010 for the course C qq taught by Professor Qq during the Spring '10 term at American College of Gastroenterology.

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Case1 - Chapter 1 READY FOR PRIMETIME Shocked at the $40...

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