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?

By entering into the video on demand (VOD) market, Netflix is trying stay on the cutting edge of video technology. Over the years, they have grown into a very successful video rental business by giving their customers what they want at a flat monthly fee. However, their success is being threatened with the emergence of VOD, just as DVD’s have eliminated the need for VHS. The management of Netflix has realized this and has created a company that is very flexible and can easily adapt to the changing business environment. A good example of this ability is their proprietary recommendation system, which allows the customer to personalize and rate movies; enhancing their movie experience. Furthermore, by catering to the needs of the customer, Netflix has been able to develop a strong brand presence. Moving forward, Netflix is entering into a highly competitive market where understanding the needs of the customer and having a strong brand will play a key role in the industry. By investing in research and development and seeing the trends in the market, the management has positioned Netflix well and provided themselves with several opportunities. The bottom line is the management is very flexible and accepting of changes in the industry, which will help them to stay on top.