During the 80s and 90s, Blockbuster dominated the US home video rental market. However,
the emergence of Netflix in 1997 with its ‘rental by mail’ model challenged Blockbuster’s
business model (and market dominance). Blockbuster’s market position was further
weakened when Netflix began to stream video content directly to consumers’ computers. In
this case study, you are required to prepare a 3,000 word report which examines how “Netflix
beat Blockbuster Video”. In preparing your report, please consider the role of technological
diffusion, first movers and followers, and innovation. In addition, please consider whether
Netflix will continue to remain as the dominant online streaming provider in the US?
Your report must be structured as follows:
1. Introduction (5 marks)
2. Institutional Background (5 marks)
o 2.1 A brief history of Blockbuster
o 2.2. A brief history of Netflix
3. How Netflix beat Blockbuster (20 marks)
o 3.1 Changing technology
o 3.2 Retail outlets versus operating online
o 3.3 Pricing strategies
o 3.4 Netflix’s innovations
4. Will Netflix remain the dominate provider of online video streaming? (15 marks)
o 4.1 Netflix stumbles: The demise of Qwikster
o 4.2 Netflix rebuilds: The rise of original content
o 4.3 The future of Netflix
5. Conclusion (5 marks)
Tips for preparing your report:
? Define your terms;
? Clearly explain the concepts;
? Make use of multiple industry and academic references (minimum of five); and
? Keep to the word limit.

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