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NETFLIX Free Resources
* Delivery Mechanism: Go...
* Delivery Mechanism: Going out of the way to a video store on a Friday evening to pick up two or more movies for the weekend wasn't a pleasant activity. Renting films earlier only added to late charges. Consumers were looking for a more convenient selection and delivery mechanism.
* Return Mechanism: Drop off boxes were a significant improvement over returning movies at the counter, but usually required driving further on an already rushed Monday morning. Why not let customers mail movies back?
* Netflix could absorb the cost of pre-paid return envelopes since many films were purchased. Long term contracts with USPS allowed for economies of scale.
* Volume users: In most businesses, volume users pay less and less the more they buy, but not so with movie rentals. The more movies that were rented, the more consumers paid.
* Netflix addressed the issue of volume users with a flat monthly fee.
* Movie studios wanted you to watch more movies without being at a significant disadvantage in loss of revenue.
* Netflix increased purchases of film content through the preferred DVD medium, adding more profits to successful films.
* Real estate costs are a significant cost in video rental.
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