Pros to vertical integration of operations in regards to sources of supply in regards to the acquisition of movies and movie studios would be that they would control the source of supply. Netflix would have exclusive rights to their products and there would be no middle man. By removing the middle man movie studios dramatically increase their profit margins (Ferrell & Hartline, 2014). Netflix would own both the studio and the content. Currently, Netflix is partnering with movie studios but, if they integrated their operations and acquired their own movie studios they would be more profitable and viable in the future. Cons to vertical integration would be the additional expenses and questionable outcome.
There are pros to other avenues of distribution. Kiosks, TV or cable networks, and wireless providers are great means of distribution. I feel that Netflix could profit from kiosks but it would be minimal and temporary. With the decline of movie rental stores, kiosks are very popular sources of entertainment for families. But, with the decline of sales in the DVD industry and competitors such as Redbox and Blockbuster a possible success rate with kiosks may not last long enough. Redbox is also developing a streaming service (Rao, 2016). …show more content…
Subscription channels such as Starz and HBO are successful in premiering new releases and also air movies and series that are exclusives for their networks. One con is that it would take tens of millions of dollars to start the network when you factor in both production and marketing (Unknown, 2011). A con would be the competition in already established networks. If Netflix were to start a network, they would have to come in with great exclusive programming. Producing television shows has a low success rate just as any other business does (Unknown,
There are pros to other avenues of distribution. Kiosks, TV or cable networks, and wireless providers are great means of distribution. I feel that Netflix could profit from kiosks but it would be minimal and temporary. With the decline of movie rental stores, kiosks are very popular sources of entertainment for families. But, with the decline of sales in the DVD industry and competitors such as Redbox and Blockbuster a possible success rate with kiosks may not last long enough. Redbox is also developing a streaming service (Rao, 2016). …show more content…
Subscription channels such as Starz and HBO are successful in premiering new releases and also air movies and series that are exclusives for their networks. One con is that it would take tens of millions of dollars to start the network when you factor in both production and marketing (Unknown, 2011). A con would be the competition in already established networks. If Netflix were to start a network, they would have to come in with great exclusive programming. Producing television shows has a low success rate just as any other business does (Unknown,