I think one concept that has intrigued me is how some businesses compete in an oligopoly market. Netflix for example, entered the video on demand market in 2007 allowing the subscribers to streamline content through a device like a video game consul (Rayburn, 2009). Because the market for streaming content for VOD is emerging due to the continued changing of technology it places Netflix in the oligopoly market among HBO, Amazon, and Hulu. That is Netflix, HBO, Amazon, and Hulu are all vying for an increase of subscribers by adding content, creating original series, setting low package prices and adding new technology. Thus, making it difficult for any one of the companies to emerge and dominate the market particularly if it is a new corporation.
…show more content…
One type of programming for Netflix is its multi-year contract with Hasbro that cost a total of 9.5 billion by December 2014 not including the expenses for 2015 onward and the family plan packaging which includes the series Goose Bumps, Scholastic T.V., The Magic School Bus and Super Why! (Netflix Inc. Annual Report Period Ending 2014, 2015). Given the 9.5 billion for one year of multi-programming contract Netflix should wait until such contracts have ended before signing new multi-programming commitments. The reason that it is crucial for Netflix to wait to add additional content is that the rates change and offerings to subscribers for service is always paying for the Netflix's commitments for the previous years. Like in 2011 when Netflix expanded to the global markets and soon after rates jumped 60% making the standard subscriber that paid $8.99 would then pay a little over $14 (Allen, Feils & Disbrow, 2014). Therefore, it is better for Netflix to retain the current subscribers while gaining only a set amount then to chance to add more programming that consumers may not value enough to pay the increase and end up signing up for HBO, Amazon or Hulu. Although, upholding the current commitments and obligations does not include Netflix accessibility and technology which is vital to connectivity and workability of streaming the …show more content…
The smart technology is how Netflix changed its technology while pairing with Xfinity and X1 service to offer an application for subscribers to sign-up through Xfinity for Netflix (Netflix on X1 To Millions of Customers Nationwide, 2016). In this way, consumers that subscribed to Xfinity and streamlined content like that of the Dream Works productions through the OnDemand became no longer available unless it was purchased to streamline through Netflix (Netflix On X1 To Millions of Customers Nationwide, 2016). In doing so, Netflix added to the consumer base as well as sustained an ISP network through Xfinity that reliably streams data through the internet. Despite such changes that Netflix has committed to with products and services, it did not change that their presence in an oligopoly limits them in gaining additional subscribers while also offering more programming. Thereby, the reason Netflix should gradually increase prices over time while also avoiding more market expansion unless those markets can guarantee direct
One type of programming for Netflix is its multi-year contract with Hasbro that cost a total of 9.5 billion by December 2014 not including the expenses for 2015 onward and the family plan packaging which includes the series Goose Bumps, Scholastic T.V., The Magic School Bus and Super Why! (Netflix Inc. Annual Report Period Ending 2014, 2015). Given the 9.5 billion for one year of multi-programming contract Netflix should wait until such contracts have ended before signing new multi-programming commitments. The reason that it is crucial for Netflix to wait to add additional content is that the rates change and offerings to subscribers for service is always paying for the Netflix's commitments for the previous years. Like in 2011 when Netflix expanded to the global markets and soon after rates jumped 60% making the standard subscriber that paid $8.99 would then pay a little over $14 (Allen, Feils & Disbrow, 2014). Therefore, it is better for Netflix to retain the current subscribers while gaining only a set amount then to chance to add more programming that consumers may not value enough to pay the increase and end up signing up for HBO, Amazon or Hulu. Although, upholding the current commitments and obligations does not include Netflix accessibility and technology which is vital to connectivity and workability of streaming the …show more content…
The smart technology is how Netflix changed its technology while pairing with Xfinity and X1 service to offer an application for subscribers to sign-up through Xfinity for Netflix (Netflix on X1 To Millions of Customers Nationwide, 2016). In this way, consumers that subscribed to Xfinity and streamlined content like that of the Dream Works productions through the OnDemand became no longer available unless it was purchased to streamline through Netflix (Netflix On X1 To Millions of Customers Nationwide, 2016). In doing so, Netflix added to the consumer base as well as sustained an ISP network through Xfinity that reliably streams data through the internet. Despite such changes that Netflix has committed to with products and services, it did not change that their presence in an oligopoly limits them in gaining additional subscribers while also offering more programming. Thereby, the reason Netflix should gradually increase prices over time while also avoiding more market expansion unless those markets can guarantee direct