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➢ Founded in 1997,( went public in 2002)
➢ Found by hasting an entrepreneur who already had found and sold a software company in 1997.
➢ The idea came from a late fee for rental of Apollo 13.
➢ Flat rate rental to customers in U.S only
➢ Largest online DVD rentals
➢ 100, 000 titles/ 800 million subscribers
Pestel: (macro environmental trends)
- Increasing number of internet users
- high cost of content/ delivery
- People appreciate the no-late fee idea
- More convenient
-Recommendation System offered by Netflix
- Less/ eventually none DVDs( less waste)
- No traveling to Rental stores( less pollution, less energy consumption)
- License agreements ( is that the same as their profit sharing agreement)
- Lawsuit ( False advertising in 2005, patent infrigment with Blockbuster)
Porter’s 5 Forces:
1. Threat of Entry: High( examples: Vongo( Discontinued on Sep 30th 2008), Moviebeam( failed because the networks assumed the watchers will watch what the networks thought they’d like, so no system like Netflix)
- Block buster, DVD.com,movie gallery…
- Pretty easy to enter,
- Barrier of entry is limited
2. Suppliers: Moderate ( based on Independent Movie Studio)
-Delivery systems( UPS)
-Movie studios( Independent)
3. Buyers : high bargaining power for the buyers due to various home video providers and various means of delivery( online or by mail), many choices
4. Substitutes : Relatively...
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