CASE STUDY: NETFLIX

About Netflix

Netflix is the world's largest online movie rental service, providing more than seven million subscribers access to more than 90,000 DVD titles plus a growing library of more than 5,000 choices that can be watched instantly on their PCs. The company offers nine subscription plans, starting at only $4.99 per month. There are no due dates and no late fees – ever. All Netflix plans include both DVDs delivered to subscribers' homes and, for no additional fee, movies and TV series that can be started in as little as 30 seconds on subscribers' PCs. DVDs are delivered free to members by first class mail, with a postage-paid return envelope, from over 100 U.S. shipping points. Nearly 95 percent of Netflix subscribers live in areas that can be reached with generally one business day delivery. Netflix offers personalized movie recommendations and has two billion movie ratings. [Source: Netflix, December 2007]

Things to read:

• About Netflix
• Netflix Fact Sheet
• How Netflix works
• Netflix Annual Report
• Netflix Script Spells Disruption by Sally Aaron
• High-tech Achiever: Netflix by Jena McGregor
• What Is Netflix's Greatest Threat? An Interview with Reed Hastings
• Netflix Financial Releases

Questions to consider:

• What is the Netflix business model? How does the service work?
• What are the advantages and disadvantages to potential customers of Netflix?
• How does Netflix incorporate a recommender system into its service, and to what advantage?
• How does Netflix change the video distribution industry?
• What is the key for Netflix to succeed in the face of direct competition from established distributors such as the nationwide chain, Blockbuster Video?

Selected registered trademarks:

• NETFLIX ®
• NETFLIX.COM
• MR. DVD
• CINEMATCH
• FRIENDS
• Search real-time for U.S. trademarks.

Selected patents:

• 6584450 -- Method and apparatus for renting items.
• Search real-time for new U.S. patents granted to Netflix.