Netflix’s success can be given to its founders Marc Randolf and Reed Hastings for their idea to revolutionize media consumption and their game of chess, navigating the already powerhouse Block Buster. As Netflix popularity was on the rise at it’s beginning, Block Buster was doing everything in its power to stop the growth of the company, even if it meant going down with them. To combat Netflix’s online delivery service for movies, Block Buster created a website to stream movies online as well as deliver movies to consumers houses. Netflix was succeeding because Block Buster was losing money on every rental being checked out as well as their less than user friendly online presence. Netflix was able to create a more powerful online presence and delivery service which even allowed them to buy out Block Buster’s online subscription base. Block Buster also had a strained relationship with its CEO, shareholders, and Board of Advisors that made stock prices plummet.
Netflix has had a variety of rivals that continue to challenge Netflix’s ad-free programming. These rivals have created anytime, anywhere streaming that is a no-charge addition to their already purchased cable subscription. Rivals include: Vudu, Walmart’s DVD delivery service, Amazon Prime, Hulu, HBO, YouTube, and Yahoo Screen. They are also competing with illegally downloaded content and extralegal streaming sites in which users watch and comment on an online forum during commercials, taking away from advertising profits.
Netflix has been able to create an ad-free, subscription in which users can watch their TV shows and movies where and whenever they want. They have had the advantage of holding this image and most viewers now want to view their entertainment without the interruptions and inconvenience of commercials. This sets the bar high for competing companies but doesn’t allow for ad revenue for Netflix. For other competitors, such as Hulu, users only have to watch a short commercial at the beginning or during their program with lower subscription or any subscription fees all together. Netflix also has been purchasing content from other companies to allow their members to view, which has a big impact on their content expenses. Netflix has been able to combat this by creating its own content and has been successful with this venture with 14 Emmy nominations of its original content in 2013. However, if original content was to receive low ratings from viewers, Netflix would be directly impacted by their lack of viewers, not another producer. Competitors have followed Netflix’s idea and have started creating their own exclusive content as well, in an attempt to compete and retain their subscribers.
It is questionable whether or not Netflix’s business model is sustainable, but only time will tell. Lindsey comments that younger kids do not have credit or debit cards in which they can purchase subscriptions, so marketing should still be directed towards parents and young adults. As Netflix moves more onto a global scale, they should take note that there are already sites in which hold excessive amount of East Asian content for cheap subscriptions and very few commercials that will directly compete with Netflix. Lindsey advices that Netflix should pause before they make any big movements into that demographic. Finally, Lindsey even suggests that Netflix needs to find better ways for its subscribers to interact with not only content, but other subscribers as well. This would create a more interconnected user face, combatting extralegal sites and promoting more of an interactive entertainment experience.
I have and still continue to feel that the media that is created is not liberating to consumers as they choose which entertainment is consumed. Producers and companies will continue to buy and create material in which appeals to larger audiences for larger profits. This completely ignores more niche media as there is a smaller market for content. This doesn’t mean it will not be created necessarily, but less producers who will be willing to create such entertainment.