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Leading with Data: The Emergence of Data-Driven Video

Explore the rise of Netflix and its success in the video rental industry through data-driven strategies. Learn how Netflix differentiated itself, the advantages over competition, and the lessons learned for a competitive advantage in the market.

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Leading with Data: The Emergence of Data-Driven Video

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  1. Leading with Data:The Emergence of Data-Driven Video Austin Chavallo, Ronnie Espedal, James Evans, Paige Powers, Ashley Sundin, Alex Wilson (Group 2)

  2. The Founding of Netflix • VCR technology helped create the video rental industry. • By the early 1990's, Blockbuster controlled the market. • In 1998, Netflix emerged as an alternative to brick and mortar stores. • Netflix's original revenue model was transactional, but quickly shifted to subscription based.

  3. Advantages of Netflix Over Competition • Larger selection of movies • Convenience of ordering movies from home • Competitive price • Proprietary software Cinematch

  4. Business Strategy • Generate Revenue with subscription based business model. • Maximize content available to customers. • IS/IT Strategy • CineMatch program • Data mining consumer information • Website for VOD streaming. • Organizational Strategy • Limited Staff required • User guides their own experience. • Partnerships with subscription based business model. • No brick and mortar stores

  5. Where did Blockbuser go wrong? • Failed to Adapt • Business Model outdated • Revenue Model not as profitable • Unwilling/Unable to adapt to changes in technology • Did not use available data • Netflix differentiated through use of data - Blue Ocean

  6. What are Netflix's Core Competencies • Creates value by providing customized experience • Cinematch • Website is easy to use and removes burden of going to a physical store • Algorithms and analysts able to optimize inventory • **Netflix added value while cutting costs**

  7. Threats about new VOD companies entering the market • Find new ways to differentiate themselves from the competition • Less bargaining power • More customer movie rental payment options, similar and different  • Subscription based payment • Pay once to watch instantly, online or on the tv

  8. A problem is just an opportunity in disguise  • More viewing options • New shows every month • Netflix Originals  • Reach out to non subscribers  • Social media • Pop culture references "Netflix and Chill" • Keep up with technology  • High speed streaming • Mobile apps  • Download to watch later, offline

  9. Advantages/Disadvantages Advantages Disadvantages Versatility Amazon • Customized Experience • Cinematch • User-friendly platform • Cost-differentiation • Millennial Culture

  10. Partnerships to Pursue • Content providers • Quality of product • Platform/hardware providers • Currently doing well in this category

  11. The Redbox Competition • Founded in 2002 • Rent new releases for $1/day • Kiosks located near entrance of retailers • Expanded to offer video game rentals

  12. Comparison: Redbox, Netflix, Blockbuster Redbox Netflix Blockbuster $1 rental Automate System Convenient location Film and Game Rental Low-cost subscription Convenience Personalized Recommendations Higher price Less convenience

  13. Where are they now? Redbox Netflix Blockbuster Drop in revenue in 2016 Remains leader in physical rentals 2016 revenue: $8.83 billion Leader in streaming market Bankruptcy 2010

  14. Recommendation to Management for Competitive Advantage  • Focus on technology:  • Increase R&D budget for technology  • Hire unique programming talent  • Solicit customers for feedback 

  15. Lessons Learned • Companies must continue to innovate to "keep up with the times" • Companies must use technology strategically 

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