Netflix: Revolutionizing the Movie Rental Industry - Essay Sample

Paper Type:  Essay
Pages:  4
Wordcount:  870 Words
Date:  2023-05-06


The classic management theories would have predicted that Netflix's business model would have failed from high competition and how it would maintain its content beyond DVD distribution. Netflix started in 1997 as a mail-order DVD distributor with a monthly subscription to elude customers from late submissions. A fee of $40 was charged for lateness, which Reed Hastings capitalized to establish an impressive supply chain in over 50 regional warehouses to ensure DVDs reach its customers (Chopra & Veeraiyan, 2016). Online video streaming services began in 2007 that demonstrated the district services offered by Netflix that include intangibility, inseparability, perishability, and variability (Chopra & Veeraiyan, 2016). Through the innovation of its business model, its customers were able to switch from the prehistoric process of renting movies and getting fines for late submissions to a subscription model. The approach was much appealing to customers since no late fees were incurred, which enabled Netflix to improve its services and offer instant streaming services among its customers.

Trust banner

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Key Issues Identification

Technology is the primary factor affecting the ability of many companies to excel in the marketplace, especially digital technology with the invention of the internet have profoundly shaped video on demand. Netflix executives primarily focused on the continued growth through adoption of a profitable business model strategies and ensure a sustained competition. Netflix diversified its strategy including content development, distinctive marketing plan, diversification of services and its expansion targeting international users that have significantly played a key role in transforming Netflix into an industry leader. Hence, Netflix has significantly acquired new international subscribers through gradual factoring of the varying political factors of different environments and the regulations that impact the Netflix business model.

Subsequently, Netflix highly depends on factors such as prices, promotions, content, and promotion since users are offered an initial one-month free trial subscription to give them experience before they pay for the subscription as a way of enticing their customers. The primary aim of Netflix to implement the decision to entice customers with their free trial is to attract more loyal customers to the company. This is targeted to gain customer's confidence through an early understanding of the products they are purchasing. Similarly, Netflix has an uphill task of maintaining new subscribers with its aggressive charge in the international market. The growth of subscribers is a complex prediction metric because of its numerous new markets and the heavy reliance, partly on the viral success of several or one of its shows. In some of the markets, the product was in the market for less than a year and its success primarily depends on its aggressiveness in the market.

Specification and Evaluation of an Alternative Course of Action

The advancement in technology and the growth of smartphones, game consoles and innovation in internet accessibility have significantly affected decisions is made by Netflix. Technological factors increase competitive intensity and results to lower profit margins, causing an organization to opt for mass customer distribution and get profits from mass volume subscriptions. The increasing competition from Disneyflix, apple YouTube poses a great threat to its existence. Their formidable content might be appealing to many streamers; therefore, Netflix should diversify their techniques through which their content can be viewed by subscribers. An alternative to developing applications on new products that have internet access is vital towards their growth in new markets and maintaining new subscribers. Hence, a critical understanding of its competitors and the importance of technology in the industry can opt to implement technological advancement to improve the various aspects of its business model. Netflix can opt to utilize 4K streaming in the majority of the devices that support it.

Recommendation of the Best Course of Action

With over 90 million subscribers globally, Netflix has to devise a method you keep their customers watch their favorite content. It has become a tradition in people's daily life, integrating everything from mobile devices in different languages are cultures. With the continued effort in advancement to retain its dominance in the market, Netflix seeks to develop innovative marketing ideas to attain its goals. Netflix has gained significant brand awareness that will assist it to expand its global market. Therefore, Netflix should focus on competitive pricing. Netflix provides a one-month subscription depending upon the type of plan the client opted that include Basic plan, Standard plan, and Premium plans that range from $8.99 to $15.99 (The street, 2020). They should implement more on psychological pricing with additional benefits through pocket-friendly packages, which is based on their mission. They should customize what gets to be shown on each user, using ads as well to assist you to expand the content one is watching and increase subscriber base. Moreover, Netflix should integrate content variety from original content, stand-up comedy and movies to create a competitive edge in the industry. It should increase its focus on stand-up comedy and movies by hiring key influencers in their portfolio to attract and retain more viewers to optimize the costs of licensing (Wingfield, 2009).


Chopra, S., & Veeraiyan, M. (2016). Movie rental business: Blockbuster, Netflix, and Redbox. New York: Sage Publication.

The street. (2020). Before You Binged: A history of Netflix. Retrieved from

Wingfield, N. (2009). Netflix Boss Plots Life After the DVD. Retrieved from

Cite this page

Netflix: Revolutionizing the Movie Rental Industry - Essay Sample. (2023, May 06). Retrieved from

Free essays can be submitted by anyone,

so we do not vouch for their quality

Want a quality guarantee?
Order from one of our vetted writers instead

If you are the original author of this essay and no longer wish to have it published on the ProEssays website, please click below to request its removal:

didn't find image

Liked this essay sample but need an original one?

Hire a professional with VAST experience and 25% off!

24/7 online support

NO plagiarism