Netflix Essay

1909 Words Apr 20th, 2008 8 Pages
Netflix is the largest online DVD rental service in the country. The company provides a monthly flat rate service for the rental of DVD movies, and most recently, video games. They founded the company in 1998, and have grown and maintained the largest portion of market share ever since. By the end of the third quarter of 2007, the company boasted a collection of over 90,000 titles, and had almost 7 million subscribers. On average, Netflix ships over 1.6 million discs a day, and has over 55 million in circulation. Netflix has continued to grow, and has watched as other companies enter the market, then quickly leave after not being able to penetrate the market.
 In 2006, Netflix continued its rapid growth, with the number of subscribers
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Their success over the years has caused a handful of other companies to attempt to enter the market, but none of them have had the success, or the market share that Netflix continues to enjoy. One of the major competitors was Walmart, which attempted an online movie service back in 2002. They were pushed out of the market in less than three years because they just couldn't turn a profit. Now they have an arrangement with Netflix for their movie rentals. Another company that has their eye on the U.S market is Amazon.com. They operate a large movie rental business in Great Britain and Germany. Although they would like to make their way into the U.S market, they have been hesitant because of previous companies failed attempts at the same concept. However if they choose to do so, Amazon would be a much more competitive threat than any of the other companies. Unlike Blockbuster and Walmart, Amazon has an extremely strong brand name associated with e-commerce. In addition to that, they already have eight existing distribution centers and experience in shipping that could leverage to a large consumer base if done properly. The main competitor at the moment is Blockbuster Video, who happens to be the world's largest store rental chain. Recently they have lowered prices and began a large marketing campaign that has sparked a price war

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