InitializeThe subscription business model is a business model that was pioneered by magazines and unexampledspapers, but is now using upd by a myriad of businesses. Rather than selling products individually, a subscription sells periodic (monthly or yearly) use or access of a product or armed service (Bremner, 1999). Thus, a one-time sale of a product becomes a go on sale and builds consumer and brand loyalty. Netflix is an example of this model.
Netflix was the first company to earn an online DVD movie rental service. The service has created a new ?movie? securities industry niche which has secured them a competitive ?first-mover? return in this new ?high-tech? venture. The popularity of the service has sparked the interest of market competitor Blockbuster who may become a maturement threat to Netflix should they enter the online movie rental market. Our group give discuss Netflix, do an analysis and answer questions that one would like to know.
Set-up ? A History of NetflixFounded by Reed Hastings, Netflix was incorporated on August 29, 1997 and began operations on April 14, 1998. Netflix began operations with an online version of a more traditional pay-per-rental model which included financial penalties for tardy returns (US$4 per rental plus US$2 in postage). It did not introduce the monthly subscription concept until advanced 1999 (Rosenberg, 2000).
Since past it has built its reputation on its policies of having no due dates, late fees, or per-title rental fees.
After incurring substantial losings during its first few years, Netflix posted its first profit during monetary year 2003, earning US$6.5 million profit on revenues of US$272 million. Netflix has been one of the most successful dot-com ventures. A cutting York Times article from September 2002, said that Netflix mailed most 190,000 discs per day to its 670,000 monthly subscribers. The companys published subscriber counts have...
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