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Contrast Netflix’s two businesses: DVD-by-mail and streaming. How do costs differ? How are these costs likely to change over time? How is subscriber interest in these services likely to change over time? What factors influence the reliability of each service? What threats are each of these businesses likely
Who are the rivals to the Netflix streaming effort? Do any of these firms have advantages that Netflix lacks? What are these advantages?
- Why would a manufacturer of DVD players be motivated to offer the Netflix “Watch Now” feature in its products?
- Make a chart of the various firms offering video-streaming services. List the pros and cons of each, along with its revenue model. Which efforts do you think will survive a shakeout? Why?
- Is Netflix a friend or foe to the studios? Make a list of reasons why they would “like” Netflix, and why studios might be fearful of the firm. What is disintermediation, and what incentives do studios have to try to disintermediate Netflix?
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