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There will be significant progress made towards a new business model beyond the traditionalad-supported and subscription service ones.Normally American household spends, on average, nearly five hours per day watching videocontent and it is a very effective medium for generating product interest. Online streaming has the opportunity to revolutionize the way products accompany content,and are ultimately introduced to viewers. According to analyst Ken Gao, “The opportunities areboundless when one thinks of how awesome an experience it would be if we can realize the fullpotential of combining streaming video and e-commerce – a next generation Home ShoppingNetworkNetflix must provide easy access to all of their movie selections through the use of searchengines or categories to help the user search for any movie. As for this strategy made the company become number one, driving popularity of streamingservices. Accessibility and convenience has reached a new level. Significant progress madetowards a new business model beyond. Discussion QuestionsPage 13of 19
1.Did Netflix implement too quickly – due to the high growth and fast expansionIs there such thing as that a company grown too fast and toot? How a company can become avictim of its own success?The world’s largest subscription-streaming service had50.1 million subscribers. However, usergrowth cannot continue indefinitely as the company saturates the market.In Sep14, Netflix’s oversized ambitions and hasty moves could derail the streaming giant evenfurther.The company made its biggest international expansion. Netflix’s rollout intosixEuropean countries. The company will faced major challenges: different viewer tastes acrossmarkets, competition from both domestic and American streaming services, conflicts over rightsto popular, and pay-tv providers, such asCanal Plus, AG, Amazon and HBO. The company alsofaces laws that could require it to finance and promote locally produced programming,especially in France. In Australia, Netflix may also be forced by local rights holders toblockillegal accessThis expansion issue bounded with the startup costs of entering new markets, includingcompliance with local laws and requirements, which could depress Netflix’s growth forseveralyears to comeand disappoint investors who have come to expect stratospheric growth from thecompany. The international segment of Netflix suffered a loss in 2013 even before it decided toexpand to European market, which the company will have more burden to supportitssignificantmarketing, legal, technical, and administrative expenditures to create marketshare.Moreover the company announced that it will enter film production. This action willdouble it spending. Unlike television, movie costs heavily dependent for marketing success on expensive Page 14of 19
star appeal and costly visuals. This make movies a very risky proposition that takes Netflix away from its core competency