Outbound logistics is used by making sure servers and their website functions properly.
Marketing and Sales are done though the online and Television advertisements. Netflix also offers a one
month free trial.
Service includes maintaining customer relationships by providing top rate titles and website functionality
(speed, usability, customer service).
While Netflix got a good start in entering the streaming market they were still faced with how
they were going to get their content to the Television set and other devices that consumers used. “Apple
has its own hardware solutions in Apple TV, the cable companies delivered OnDemand though their set-
top boxes, and now Amazon has Tivo. The Netflix solution was to think beyond one hardware partner and
recruit many” (Gallaugher, 2009, p. 13). By 2008 Netflix has partnered with consumer electronic
companies to incorporate Netflix on their devices “while the first generation Roku device has received
positive reviews, Netflix hopes access to its service will eventually be built into all sorts of devices,
including DVD players, televisions, and game consoles” ” (Gallaugher, 2009, p. 14). By 2009 Netflix had
reached over 10 million subscribers and now offered over 100,000 titles on DVD (Breakingnews.com,
2015).
“In Mid-June 2011, Netflix announced a new price plan that effectively raised the monthly
subscription price by 60 percent for customers who were paying $9.99 per month for the ability to (1)
receive an unlimited number of DVDs each month (delivered and returned by mail with one title out at a
time), and (2) watch an unlimited number of movies and TV episodes streamed over the Internet”
(Thompson, 2012, p. C-127).
Not only would the subscription plan price go up but there would be a
separation of the streaming service and the DVD-by-mail service. Customers responded to this price
change and separation of subscriptions in a negative way. Netflix CEO Hastings decided to continue the
streaming process though the name Netflix, Inc. and to move the DVD-by-mail services to the website
Qwikster.com (Thompson, 2012, p. C-128).
This caused even bigger upset with customers and Netflix’s
stock prices took several hits. Hastings quickly abandoned the idea of changing the DVD-by-mail service
to Qwikster.com stating that “it is clear that for many of our members two websites would make things
more difficult. So we are going to keep Netflix as one place to go to for streaming and DVDs”
(Thompson, 2012, p. C-129).
Slowly Netflix was trying to rebound from their mistake and make things
right with their customers.
By 2012 Netflix has been able to successfully expand internationally starting in Canada in 2010,
then moving into Latin America and the Caribbean. Also in 2012, “more than 700 different devices were
capable of streaming content from Netflix” (Thompson, 2012, p. C-132).
While Netflix had become the
leader in Internet streaming rivals soon appears after seeing the opportunities that streaming content
provided. “Netflix’s two most important subscription-based instant streaming rivals included: Hulu Plus
and Amazon Prime Instant Video” (Thompson, 2012, p. C-135).
