Article Analysis Essay on Streaming Away From DVDs

The article Streaming away from DVDs is about the decisions that were undertaken by Netflix CEO and the effect it had on the company. His decision to split his company DVD rental business was not well received, and he suffered a severe backlash. The company lost 805,000 of its subscribers within the first quarter of the announcement and the shares dropped by half. The company was also facing competition from other video streaming service providers such as Hulu (Luis and David 2016). Additionally, the new services offered by Netflix was not doing well because it was not providing its subscribers with the latest movies. The article also explains how blockbuster Inc. rose and fell. The late entry into the DVD business and its refusal to eliminate late fees made it possible for Netflix to dominate the market. The article also covers how Enron Broadband partnered with Blockbuster to provide an online streaming. Although the companies did not succeed and blamed each other, the truth is that the public was not ready for the service.

Streaming Across Borders

The article Streaming across Borders analyzes the decision by Netflix CEO in expanding the company abroad despite its US membership declining. People kept wondering whether the vast amounts of money spent on growing the business is sustainable. When billionaire Carl Icahn sold his Netflix share claiming Netflix had picked, people started discussing that assertion. However, Sarandos shrugged off this claims arguing that what is happening is a potential global upside.

The decision to expand to international markets was informed by the shrinking advertisements on other media companies (Luis and David 2016). According to Netflix CEO, a ccompany does not grow by charging its customers more money. He believes that the $8 or $9 paid by Netflix subscribers is value for money. Since many people do not spend a lot of time watching movies, Sarandos believes their charges will interest clients from other countries. From 2013, Netflix decides it is not a good business model in relying on third parties and decided to offer original content.

Evaluation of the changes by Netflix

I do not agree with Reed Hastings decision to split his company DVD rental and online streaming. Business. The decision complicates its subscribers by forcing them to have two accounts. Customers like changes that will make their lives easier and not decisions that will complicate their lives. The increase in fees was also not a good move since the services that it was offering was the same. New pricing should be increased if there is a new product or service. However, the additional charges were not worth the backlash since Netflix was not offering the latest movies.

The company should strive to offer updated movies if it wants to stay competitive. However, I do agree with Netflix strategy of using the United States Postal services for its delivery of DVDs. The policy not to charge late fees is also advisable and should be maintained. I do agree with Netflix CEO in spreading the company to other countries. The decision is bound to drive the revenues due to the high demand for Hollywood movies. By 2015, Netflix had a subscription of 5 million outside the US. There are other places such as Asia and Latin American where the demand for Netflix is growing. I, therefore, agree with Netflix decision to offer original content and spreading their arms outside the United States.

Refrences

Luis and David Netflix Inc.: Streaming Away from DVDs 2016 Case Study Boson.

Harvard Business Publishing, 2016. Print October 2016

Luis and David Netflix Inc.: Streaming across borders and into original content, 2016

Case Study Boson. Harvard Business Publishing, 2016. Print October 2016