So I signed up for Netflix and bought the fancy new LG BD300 Blu-ray player that allows for Netflix streaming content to be played... similar to the feelings of the author of this article, I was a little underwhelmed by the quality of the picture and sound delived by my fancy little network DVD player...
Regardless, an interesting point is raised by the author, he feels that streaming content was meant to see the demise and eventual end of the DVD. In our case, we focus our comparisons between Netflix and Blockbuster, with Blockbuster a clear second in the agility stakes. In the instant market, though, there are some more players, Vudu, Playstation 3 and Apple TV all have a hand in the market.
What are Netflix's advantages in the instant market? Their disadvantages?
Netflix should have a massive database of what is being watched and where it is being watched. This was more valuable when the actual DVD had to be delivered, however, the data itself has value (mostly in managing delivery costs of the electronic format). The data should be used to ensure their IT hardware is used to greatest advantage. It is questionable whether or not this aspect is being addressed by their management or if they are even aware of this issue.
ReplyDeleteI believe one of Netflix greatest asset is the understanding of customer service. In my mind, this represents a potential advantage if they can translate this experience/skill into meeting customers expectations.
The greatest disadvantage for the entire industry is that they cannot control delivery of their service. The Wasatch Front may have potential to be a hot market, but the fiber optic lines (that I believe have been decided against) are a must. The industry is likely to be extremely experimental until technology becomes generally available to all potential customers.
One of Netflix's advantages in instant market is they already have a customer base. Those who enjoy renting movies in DVD format will probably continue to enjoy renting movies in an instantly download-able format. Another of Netflix's greatest advantages comes from its subscription cost. Its cost for subscriptions is much less than that of its competitors. Their ability to benefit from instant delivery will depend upon whether they can continue to keep subscription fees lower than their competitors can.
ReplyDeleteNetflix does face one large disadvantage in the world of instant delivery. There is no restriction on the DVDs Netflix can offer. There is, however, a restriction on the movies it can offer via internet. Of its 100,000 DVD titles, only 12,000 are available for instant delivery. Also, HBO has exclusive rights to some films for certain time periods, for example. We can only imagine that as online viewing becomes more popular other competitors, such as Apple and Amazon, will try to obtain similar exclusivity rights.
Netflix may need to increase subscription costs to compete, which may drive their customers elsewhere.
There is an interesting article in the Wall Street Journal called "Netflix Could Get Snagged in Move" that describes some of the other obstacles Netflix faces.
Here is a link to the article mentioned by Nate "Netflix could get snagged in move to net": http://online.wsj.com/article/SB123154894557470021.html
ReplyDeleteMaybe it is just my wishful thinking...I am not convinced that Netflex's DVD mailing business is sustainable much longer in the future. Clearly, it is a smart move for Netflex to engage in the instant movie download business, unfortunately, (my sympathy goes out for you, Asher), the technology has not caught up with their ideas.
ReplyDeleteCouple years ago, I tried Blockbuster's mail in DVD offer. Well, I found that when I am in the mood for a movie, I want it NOW. I don't want to wait for USPS's 3 day delivery. The opportunity cost is too severe for me to bear. The alternative for getting a rental from a physical store will definitely be instant movie download.
Since I found the "RED BOX", it has been taking care of my needs for new releases. When I am in the mood for new releases, I simple go online to do a search around stores within 5 miles of my home to reserve any new releases I would like to see. 1 buck per night, if it goes over 25 nights, it is yours to keep.
Whenever I feel like watching a old movies, I go to a local movie rental shop to find a old movie for 2 bucks for 2 nights, instead of Block buster's 3.99 for a old movie. Accounting mentality we learn from the U has started to kick in---find the best deal in town!
Granted, nothing beats Netflex's 10000 DVD selections. Maybe after grad school, I may have the pleasure to enjoy 10000 movies. I will watch until I drop.
-Carol Hsieh
Maybe it is just my wishful thinking...I am not convinced that Netflex's DVD mailing business is sustainable much longer in the future. Clearly, it is a smart move for Netflex to engage in the instant movie download business, unfortunately, (my sympathy goes out for you, Asher), the technology has not caught up with their ideas.
ReplyDeleteCouple years ago, I tried Blockbuster's mail in DVD offer. Well, I found that when I am in the mood for a movie, I want it NOW. I don't want to wait for USPS's 3 day delivery. The opportunity cost is too severe for me to bear. The alternative for getting a rental from a physical store will definitely be instant movie download.
Since I found the "RED BOX", it has been taking care of my needs for new releases. When I am in the mood for new releases, I simple go online to do a search around stores within 5 miles of my home to reserve any new releases I would like to see. 1 buck per night, if it goes over 25 nights, it is yours to keep.
Whenever I feel like watching a old movies, I go to a local movie rental shop to find a old movie for 2 bucks for 2 nights, instead of Block buster's 3.99 for a old movie. Accounting mentality we learn from the U has started to kick in---find the best deal in town!
Granted, nothing beats Netflex's 10000 DVD selections. Maybe after grad school, I may have the pleasure to enjoy 10000 movies. I will watch until I drop.
-Carol Hsieh