The Sassy Netflix Model


Netflix is an online service that allows you to “get DVDs by mail plus instantly watch movies… & TV episodes… online on your PC or Mac or streamed instantly from Netflix over the Internet right to your TV via a Netflix ready device.” It wasn’t long ago that heading to the movie rental store was part of a Friday night ritual. Technology has now made entertainment selection so simple; you don’t even have to leave your chair.

So we ask the question “Why is Netflix so successful?” It is the cool red branding color, the algorithm the chooses movies for you, or it is because, for a time it was the neatest thing out there? Last class we talked about this and how convenience seemed to be the key, but what are some other factors? Offering trials and guaranteeing customer satisfaction by allowing customers to choose when they receive their movies (streaming online) puts the entertainment in the customers hands.

Expansion also adds to the convenience factor. Last November Netflix starting offering their service on the Xbox360, and according to a recent press release“1 million Xbox Gold members have downloaded and activated the groundbreaking Xbox LIVE application for Netflix.” This was an explosive partnership that made the Xbox not only a gaming device, but a media center. Originally you had to log-on to your Netflix account and manage the mailing of your selections there, but now you don’t event have to get off your couch. With one easy click you can download a movie through your Xbox without the hard copy DVD.

This “on-demand” service, besides it being a ‘duh’ partnership, is also addressing Netflix’s main competition…on-demand cable viewing. Services like Comcast cable allow you to view many different types of content as well, without going to the video store or creating an account online. The upside to this service is you pay per use, unlike the monthly fee paid to Netflix.

There will always be a battle for getting entertainment into the consumer’s hands…the question is, are consumers driving changes, or technology?

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