Netflix: Push and Pushback in Streaming Video Reed Hastings, along with fellow s

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Netflix: Push and Pushback in Streaming Video Reed Hastings, along with fellow software executive Marc Randolph, co-founded Netflix in 1997. T seven-day online rentals of movies in the then-relatively unknown DVD format. Netflix's DVD rentals business has prospered, Hastings, the Netflix CEO, thinks this core business is doomed." Hastings believes that Internet video streami online DVD rentals; he forecasts that as soon as mid-2013, "the business that generates most o Netflix's revenue today [mid-2009] will begin to decline, as DVDs delivered by mail steadily lose ground to movies sent straight over the Internet."- he business, becoming operational in April 1998 in Scotts Valley, California, offered ing will substantially displace Hastings aims to have Netflix be a key player in this emerging market. So he is "quickly trying to shift Netflix's business-seeking to make more videos available online and cutting deals with electronics makers so consumers can play those movies on television sets iv The Netflix initiatives are not taking place without some pushback from actual and potential competitors and suppliers The company's website provides an interesting perspective on Netflix's ambitions. The website states: "With more than 23 million members in the United States and Canada, Netflix, Inc. is the world's leading Internet subscription service for enjoying movies and TV shows. For $7.99 a month, Netflix members can instantly watch unlimited movies and TV episodes streamed over the Internet to PCs, Macs and TVs. Among the large and expanding base of devices streaming from Netflix are Microsoft's Xbox 360, Nintendo's Wii and Sony's PS3 consoles; an array of Blu-ray disc players, Internet-connected TVs, home theater systems, digital video recorders and Internet video players; Apple's iPhone, iPad and iPod touch, as well as Apple TV and Google TV. In all, more than 200 devices that stream from Netflix are available in the U.S. and a growing number are available in Canada As it seeks to transform its business model from the online rental of DVDs to subscriptions for streaming video, Netflix is encountering and responding to at least four major challenges- technology deployment, growing competition in the streaming video market, getting involved in original programming and the associated reaction of major media companies, and the cost of accessing content. One challenge involves fostering the deployment of technology that enables user-friendly, ease. f-access to the Netflix streaming service. Netflix has been entering into deals with game- console makers, televisio ive products that would provide access to ications that run on iPhones and iPads n manufacturers, and Blu-ray disc player makers to include software in the Netflix streaming service. Netflix has

Explanation / Answer

1. Four challenges that Netflix faces are---------netflix is entering into a deal with manufacturer of various video devices to display technology that enable user-friendly, ease of access to netflix streaming service.

Netflix growing competation from businesses such as Amazon and google , in video streaming market all three companies race to dominate the digital delivery of tv shows and films. thereby encroaching on turf traditionally controlled by cable and satellite television provider.

netflix is becoming involved in developing original programming , this threatens the pay tv industry, which a key source of major media companies. the major media companies not happy with netflix initiative, are pushing back to various degree of restricting netflex access to their programming.

studios are increasing the fees the charge netflix to access the studio. the fees increases is occuring because studio executive belive that netflix pricing system is devaluing the studio.

paying the increased fees is a challege that should not be extraordinarly difficult to address. the higher fees could necessitates an increase in netflix own price structure , which in turn, could have an effect on demand for its distribution service. deploying technology that enables user friendly , ease to access to the netflix streaming service is another challenge that should be relatively easy to address. netflix has allready negotiated some deals with manufacturer to deploy technology. netflix should be able to readily continue in their direction. the other two challenges would be difficult to address .netflix would need to develop considerable resources to maintain a dominant posiion in the video streaming market. but video streaming is allready an area of expertise of netflix. netflix development of major programming requires a major investment and is a major effort in a quite different direction from distributing video either through dvd rental or online streaming.

2. These three challenges relate to the four challenges faced by netflix because the way they are handeled shapes employee behaviour just like the way the four challenges are handled shape netfix future. developing global mindset among employees expand their worldview and puts compitation on a large scale. knowing that diversity is valued and differences are assets causes employee to think twice about engaing in discriminatory behaviour . sending a message that unethical behaviour is not tolerated lets employees know that doing the right things pay off.

3. By fostering the deployment of technology that enables user-friendly. easy access to the netflix streaming service has opened up opportunities for netflix and allowed them to get deals with game console companies. Also the initiative of netflix to get into original programming has allowed them to get first run rights to a new show.

4. Netflix need to focus more on core competency. that is their digital media distribution, and when pursuing other businesses do not get distracted. In order for netflix to continue to be sucessful they need to fix damaged relationship with suppiers.

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