I attached 3 discussion posts for each of them you should Your 2-paragraph posting should be written in the following format: Edit the posting for spelling, grammar, and technical writing. List the c

ChapterCase 7 

Netflix: Disrupting the TV industry

In 2019, Netflix had 150 million subscribers worldwide, generating $16 billion in revenues and boasting a market cap of over $150 billion. With its stock appreciating by approximately 2,600 percent over the past decade, Netflix has not only disrupted the TV industry but also established a sustainable competitive advantage through continuous innovation. The company's journey began in 1997 as an online DVD rental shop, offering a solution to high late fees experienced by its founder, Reed Hastings, with Blockbuster. By leveraging the emerging commercial internet and focusing on DVD rentals, which were cheaper and easier to mail, Netflix gained an early advantage. Introducing a monthly subscription model with unlimited rentals and no late fees further enhanced its business model. Despite a slow start, Netflix survived the dot-com bust and thrived, eventually surpassing Blockbuster, which rejected a partnership offer. Blockbuster's attempts to enter the online rental market proved futile, leading to its decline and eventual bankruptcy in 2010. By 2019, Netflix was confronted with several challenges that threatened its ability to sustain a competitive advantage. Firstly, competition in the streaming media industry had intensified, with media content companies like Disney, AT&T, and Comcast entering the market with their own proprietary services. These companies were becoming less inclined to license their content to Netflix, reducing the availability of popular content. Additionally, tech giants such as Apple and Amazon had also ventured into content production, further increasing competition. Developing original content is costly, as seen with HBO's Game of Thrones and the significant investment made by Amazon and Apple TV. With limited subscriber willingness to pay for multiple services, Netflix faced pricing pressures, as evidenced by its price increase from $8 to $13 per month. Secondly, Netflix's growth in the domestic market had slowed, necessitating international expansion. To achieve growth overseas, Netflix needed to create original content tailored to different languages and cultures, such as the award-winning Spanish-language film Roma. 

Question 2: Why is competition in internet streaming services heating up? Who is jumping into the fray, and why? How do these companies differ? What do you expect the result of this intensifying competition will be going forward?

    Competition in the internet streaming services industry is heating up due to the significant growth potential and profitability of the market. The rise of streaming as a preferred mode of consuming media content has attracted various companies looking to capitalize on this trend. Notable players jumping into the fray include media content companies like Disney, AT&T (owner of Time Warner, including HBO), and Comcast owner of NBCUniversal(Mohit Oberoi, (2022), who have ventured into streaming to expand their reach and directly connect with consumers. Additionally, tech giants such as Apple and Amazon have entered the streaming space to leverage their existing customer base and offer integrated content solutions. As competition intensifies, consumers are likely to see a proliferation of streaming options and exclusive content offerings. The result may include more fragmented subscription models, where consumers need to subscribe to multiple services to access desired content, and a potential consolidation of smaller players. The overall outcome will depend on factors such as content quality, pricing, user experience, and the ability to retain and attract subscribers.

From this case, it is evident that the streaming media industry is highly competitive and subject to constant changes and disruptions. Companies in this space need to continuously innovate, invest in original content, and expand into new markets to sustain their competitive advantage. The case highlights the importance of adapting to evolving consumer preferences, managing content costs, and balancing pricing strategies to remain successful in the highly dynamic streaming landscape.

References:

Rothaermel, F. T. (2021). Strategic management. Mcgraw-Hill Education.

Mohit Oberoi, M. (2022, August 4). Who owns HBO and is the company laying off employees?. Market Realist. https://marketrealist.com/media-and-entertainment/who-owns-hbo/ 

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