Trevor Jones
Netflix Case
Netflix had just recently changed up their business model by splitting the company into 2 different parts: Qwikster for its DVD-by-mail business and Netflix for its streaming business. Rachel Adams was asked to reevaluate the stock she had purchased for her company many years ago because of the huge drop in stock value. Netflix has been enjoying huge success in the last 5 years. They have increased their revenues and net income significantly. This was done mostly from shifting majority of their focus to streaming movies. They also focused on improving customer service, expand content offered via streaming, expand streaming services to more types of devices, and continuing to meet goals. They encouraged their customers to switch to the online streaming by changing their pricing structure. They took their flat rate of $9.99 a month to 2 rates each $7.99 with one charging for DVD-by-mail and one fee for online streaming. By switching customers to online streaming they could begin to save on DVD warehouse expenses, and postal fees. There was a downside to the online streaming library of movies. The library wasn’t allowed to have new films because of probationary period and lacked in the independent films. Netflix new if they increased their investment in upgrading their streaming content, it would convince more customers to subscribe. The public had a bigger out lash than anticipated by Netflix executives. More customers were dropping their