Netflix

Since the publishing of this case, Netflix has entered the video on demand (VOD) market. What is your analysis of how Netflix has attempted to update their business model with VOD?

Netflix obviously had to enter the video on demand market. As with any industry, new technology can cause drastic change in an industry and unless companies are willing to embrace change, they will often times be "left behind." Netfilx realized early that the video on demand market would emerge and have been contemplating and saving $ since 2001. From what I have gathered, Netflix is now offering unlimited on-line viewing for all of it's paid subscribers. I'm not sure what the usage of this service is for Netflix viewers, but it will presumably increase and at somepoint take over the mail-order business.

One of Netflix core assets is its recommendation system. This asset can be highly utilized in the VOD market as it has been in the mail order video market. As long as the pricing they have established is profitable, they are aligning themselves for success.

The key componenet that is going to drive consumers to use VOD will be the capability and ease in which they can connect thier internet to their TV. I know I would not attempt this, but my husband seemed to do it with ease. Thus, as this connection becomes more mainstream (I obviously don't know how), the VOD market will boom. Netflix needs to align themselves with the leader of this technology. Netfilx partnered with the makers of DVD's when it was a new phenomenon. They need to do the same thing with the next best technology of linking computers to TV's. I'm assuming you will not always need to connect your laptop to the back of the television. I might be missing an already existing technology?, but from what I know this would be a good move for Netflix.