Essay Sample on Netflix: The Rise of a Movie Rental Giant

Introduction

Netflix was established by Marc Randolph and Reed Hastings in Scotts Valley, California the year 1997. The founding of the company happened instantly after they had abandoned the Pure Software (Hoffman, 2013). By the year 2011, Netflix was the globe's prime provider for the online movie rental service. Netflix's customers paid to have digital versatile disks conveyed to their households through the United States mail. The customers were also granted access to view unrestricted television shows, and movies gushed over the Internet to their televisions, mobile phones, or personal computers. NetFlix had subjugated the rental market of DVD vending over a couple of years in comparison to the vital contenders of the organizations such as Apple iTunes and Amazon.

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Consequently, by the year 2011, NetFlix had made distributions of over 100,000 titles. This was done through the aid of their numerous shipment centers that the company had formed. The company also hired almost 4100 workers, 2200 of those workers acted as part-time employees (Hoffman, 2013). This made the company successful globally. Due to the founders' ambitions to grow the company further, they decided to make structural changes to the company. These structural changes would later turn to be vital for the business to enhance.

One of Netflix's founder, namely Hastings, had stanch credence that streaming video characterized the imminent of household entertainment. Hastings claimed that in times of high-tech expansion, organizations that had prospered at one industry repeatedly gripped firmly to tradition and to the things that had ensured success to them. Later on, the organizations would fail terribly. Hastings did not want such an experience to occur in his company Netflix. In 2011, Netflix's chief executive officer and co-founder Reed Hastings publicized on the Netflix weblog that the firm was breaking up its digital versatile disks conveyance service from its online flowing service. Hence, it had decided to rebrand its digital versatile disks delivery service Qwikster. This was to provide a means for differentiation from its online flowing provision, and establishing a new website for it.

The sole reason for the split was to allow NetFlix to emphasize its fundamental provisions, which were the online streaming provisions. Moreover, the division would prompt the business to decrease the distribution costs that had amplified ominously for the digital versatile disks by mail service. Nevertheless, these amendments caused displeasure amongst numerous customers. As a consequence of this crucial decision, there was a dramatic loss to the subscribers of the company that happened with immediate effect.

After three weeks, in retort to the customer barbarity and misperception experienced, Hastings withdrew rebranding the digital versatile disks delivery service Qwikster and rejoining it into Netflix. Five weeks after the primary break up, the company admitted that it had experienced a loss of 800,000 U.S. customers. It also stated that it was expecting to lose more subscribers yet. This was brought about by the Qwikster catastrophe and the skyrocketing of prices, which the company had unambiguously found out to be essential in covering the cumulative content costs (Levine, 2011).

In the Netflix context, the company did not appropriately discover the needs of its customers. The company misapprehended its subscribers, and it failed to appreciate that numerous subscribers were ready to part away with the $10 a month despite them not using the service. Concerning this, any particular business needs to identify its customers and discover their needs appropriately.

Conclusion

In conclusion, it is vital to act accordingly. This is illustrated by how Netflix rapidly recognized it had ruined the price upsurge causing the company to lose 1 million more subscribers than projected. The company quickly restructured to ensure that it curbed the menace appropriately as desired, ensuring that no further losses were to be experienced.

References

Hoffman, A. N. (2013). Netflix, Inc.: The 2011 Rebranding/Price increase debacle. Bentley University.

Levine, D. M. (2011, October 10). Netflix Reverses Its Qwikster Rebranding. Retrieved from https://www.adweek.com/digital/netflix-reverses-its-qwikster-rebranding-135673/.