Thursday, February 16, 2012

How Netflix and On-Demand Channels are Changing the Game

Recently, the incredible rise of video on demand within the media industry has caught my eye.  The heightened popularity of Netflix and movie-order channels made available through various cable providers are enjoying a very high level of success.  As a result, video rental companies like Blockbuster are being run off the map.  Growing up, I would head to Blockbuster on a Friday night with my parents to pick out the latest movie.  That Blockbuster has long been closed, and I can’t remember the last time I saw one in my neighborhood.  These days, my family simply goes to “Channel 1” on our TV set, and decides on a movie from the WOW on-demand movie channel. 
That being said, I would like to focus my project on the rise on Netflix and on-demand movie channels.  What’s more, I would like to see how this has influenced companies like Hollywood Video or Blockbuster, and the DVD market in general.  For example, has Netflix significantly lessened DVD sales in stores like Best Buy or Target?  Are people still heading to the stores in the same numbers to buy their favorite movies or TV shows?  Quite clearly, Netflix has impacted video rentals, but how was this accomplished?  Through my final project, I will explore this rise in Netflix and other on-demand channels to see how they were so successful.  In addition, I will explore how Blockbuster changed their business model to adapt to this shift in consumption.  Blockbuster had to alter their business to cater to people’s needs, where consumers were now getting video rentals without having to leave the comfort of home. 
Through research, I expect to find that Netflix had a significant impact on DVD sales.  Personally, I would much rather rent a movie for two dollars on my television then pay upwards of 20 dollars for a movie I’ll likely watch once and store away.  Therefore, I believe that Netflix and on-demand channels have completely altered the business model of Blockbuster and have significantly lessened the sales of movies and TV shows in stores.


  1. I agree that the number of movies being purchased in stores has plummeted, but I don’t think that can all be credited to Netlix. I know countless people that still torrent movies or find other ways online to watch them, and I personally believe that with the competition that Netflix is facing now will prevent them from having the power they once did. For example, the Blockbuster @Home service offers more features for less money than Netflix. I get unlimited streaming, unlimited rentals in the mail, and video games and BluRays at no extra charge. Right now the Blockbuster @Home service is only available to DISH subscribers, but I remember Joe Clayton saying at the release that it will be available to the general public. As a DISH employee, this is very exciting!

  2. With an outlet like this it would be interesting to look at their profit model. As we have discussed so far this semester it is very interesting to look at an outlet that relies on no advertising. Clearly it is on a subscription basis but with such low prices and a large amount of media available to consume it is interesting to look at their business model. I think that you are on to something very interesting here and I look forward to learning more about Netflix and how they function.

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  4. Very interesting Braden! Also an interesting point by HanSolo2469 about the competition that Netflix facing taking away the power they once had. It may be interesting to include in your paper Braden how Netflix is responding to this increased competition to keep a competitive edge in the industry. After doing some research, it seems that has launched a service similar to Netflix's rental model and from the above post it sounds as though Blockbuster is a competitor as well. Here is an article on the competition in the market:

    One thing I found that Netflix is doing to stay competitive in the market is having original programs made exclusively for them by CBS, including "Arrested Development." This is set to be accomplished by 2013. Here is an article on the new shows they hope to add: