Netflix Case:
David becomes Goliath
By John Gallaugher
Case Study available at:
http://gallaugher.com/chapters
&
http://flatworldknowledge.com/pub/gallaugher
Topics Covered
• NetFlix
– Startups vs. Established Firms
– Virtual vs. Physical Storefronts
– Long Tail Industries
– Resources for Competitive Advantage
– Value of Moving Early
– Short & Long Term Vulnerabilities
Key Resources for Comp. Adv.
• Brand
•
•
Scale
–
Distribution Centers
–
Customers
–
Selection
Data / Switching Costs
Distribution Centers
Economies of Scale
Subscribers:
14 million
Cost to run the effort:
$300 million
Subscribers:
2.2 million
Vs.
Cost to run the effort:
$300 million
Long Tail:
businesses that can profitably offer a great volume of less popular products
Source: Wired
9
Crowdsourcing:
Outsourcing a task to a large, and undefined population in the form of an open call.
“underwhelming”
•
Not Enough
Content
•
No Way to Get
Content to the
Television
Windowing:
content is available to a given distribution channel for a specified period of time
(window).
Many Models