Netflix Term Paper

As the global economy has changed the traditional business in past decade, Since the technology has evolved the value of customer the supply side driven by the traditional industrial logic are no longer existed. By this significant utilization of the modern communication and technology, therefore it is necessary for the business sector to reform the old-fashioned business model in order to catch the customer needs.

Netflix was raised up with a new definition for video demand service company, with the unique of the business model (subscription), which allow Netflix gain revenue source by providing the unlimited entertaining programs. In return, that the customer has to pay for the subscription. Although subscription is the only way for Netflix in order to gain the revenue, however Netflix took the advantage from their fully combine new technology on its operation interface, as well as developing their own production

Firstly, Netflix introduce a new incorporate digital innovations allowed Netflix successfully capitalized on the weaknesses of the traditional video rental business model as well as the other on demand providers. (Ramachandran, S. and Armental, M.., 2015) Secondly most of the VOD provider still not covered in many platforms, therefore many of customers were prefer Netflix than other provider. Thirdly, in compare with other VOD provider Netflix does not marketing on any advertisement, therefore the customers could enjoy on their favorite program without any interruption. (Mikhalkina, T.M. 2014) According to a 2014 report, Netflix has controled the US video streaming for approximately 90 percent of market share, which roughly 36 percent of US households have subscribed, whereas Amazon prime and Hulu have gained only 13% and 2.6percent respectively. (Moskowitz, D,2015) This report is the good reference which indicates that Netflix became succeed as a VOD provider which dominated all business