"Competition in the Movie Rental Industry, Part 1" discussion of M.Azim Ulfati

 

"Assess how technology and the changing demands of customers have impacted the movie rental business."

Technology is continuously changing, and so does the customers demands in renting movies and nowhere is this more evident than consumer electronics; we can access it with a growing list of devices at lightning speed. These technologies and others are now beginning to open the door to a new, flexible and fast way we will access a wide range of video entertainment content.

For many years, we have been able to watch movies on our computers - laptops on airplanes, etc. However, the big change is that nearly every new consumer electronics device in our living room is now Internet capable. With a growing set of households with broadband (high speed) internet connections and many with home networks set up, and a new set of internet - connected TVs, video game consoles, Blu-ray players, and other set- top-boxes, the infrastructure is being put in place to consume video over the internet, sitting on your couch in the living room.

The advent of digital entertainment has changed the face of the movie rental Market. The outlook of traditional video stores has changed by adopting new technologies, which help in efficient inventory management and store operations. The online DVD rental industry is driving movie rental services. The movie rental market is a part of the home entertainment industry, which is again sub-categorized into the physical movie rental market and the digital movie rental market.

"Suggest a strategy for Netflix’s to prevent a new entrant into the marketplace and demonstrate its effectiveness. "

Netflix is the world’s largest online movie rental service with millions of members around the world. How ever the new technology has enabled Netflix to provide high quality streaming videos directly to their subscribers’ Pcs but still Netflix needs for a strategy to enter the video on demand Market and then that way, it can also differentiate itself from its competitors and reduce the likelihood of price competition and also it needs a streaming of live movie strategy, it needs strategy to increase its capacity and increase the resolution of the movies to better High Definition (HD) and 3D graphics.

"Evaluate any new products in this marketplace and the potential impact to Netflix’s market share."

A new product in this marketplace will soon be VOD.(Degree of Product Differentiation). It is going to have a great impact to Netflix’s market share. Rivals within the industry are causing price competition. The degree of product differentiation has not occurred with the physical product, but it is the service that is causing price competition and will greatly affect the demand for Netflix shares in the market.