- The most obvious channel is of course the Netflix website. The most well-known website is the one the content streaming customers use. Another less well-known (and more old-fashioned) website they have is the website where people can order DVDs that are then delivered by mail. This website can only be accessed in the USA.
IOS Apps :
- Besides using the original website, both DVD customers and content streaming users can use an APP that offers them the same features as the website.
Content Hubs & Video game consoles :
- Today, it is also possible for content streaming users to stream content using their videogame consoles or content hubs (For example; Apple TV).
Mail & E-mail :
- Another channel is than of course mail. Once the DVD customers have ordered a DVD, it has to be brought to their houses via mail.
The newsletter :
- There is also the weekly newsletter that highlights the newest and greatest content titles added to Netflix USA, as well as other countries around the world.
DVD Customers in USA :
This is he customer Netflix has had from its start back in 1997. One of the founders came up with the idea of creating this business when he had to pay a $ 40 fee because he returned late his rented movie Apollo 13. People can order DVDs and receive them by post, in a red envelop. After watching the movie, they send it back. Customers just have to pay a certain fee and can order as many DVDs as they want (the number of DVDs you can have at a certain moment in time depends on the type a subscription you have). Today, this DVD-ordering system only works in the USA.
Streaming content Customers ( mass & niche ) :
Netflix understood the digitalization trend and allowed its customers in 2007 to stream content. Within this segment, we can identify 2 broad segments: a mass market and a niche market. The niche segment looks for very specific content that is hard to find elsewhere. The mass market watches the more mainstream content. Both segments pay a fee which allows them to watch as much content as they want. According to the amount they pay, they can watch on 2, 3, 4 or more screens at the same time (TV, laptop, tablet…).
Brands: product placement :
companies that use product placement. In 2013, Netflix moved into the film and television industry, with its first series being House of Cards, which debuted in the same year. They made also other series such as the well-known Orange Is The New Black series. In these productions, companies can make appear their products in a subtle way, a phenomenon called ‘product placement’.
I can order as many DVDs as I want when I pay a certain fee.
I choose the DVDs I want to see online and they are delivered at my house.
I also don’t have to pay fees when I return my DVD late, which is not the case when I rent a DVD in the ‘traditional way’.
I can stream as much content as I want when I pay a certain fee.
The higher the fee I pay, the more devices I can watch streaming content on at the same time.
On top of that, everything I watch is without advertisements, and I can even watch exclusive content (For example; House of Cards, Orange is the new black).
If I want, I can look for very special content that is difficult to find elsewhere.
I can raise awareness of my brand in a subtle way. Customers of Netflix are exposed to my brands in a subtle way thanks to product placements in Netflix’s productions (such as House of Cards).
- DVD mailing Fees ;
- DVD order processing costs ;
- Content licence contracts ;
- Costs of producing original Content ;
- Data equipment, facilities and staff ;
- Communication ;
=> The costs structure should remain the same because there is no other company that provides both physical DVD’s and digital download.
- DVD Plan subscriptions : Netflix offers opportunities for annual subscriptions to DVD, with very attractive prices, for customer loyalty
- Streaming Plan Subscriptions : The subscription rates are also available for streaming
- Brand Product Placement Fees
=> With main competition coming from RedBox, which has movies for only 1 dollar, customers are not willing to pay as much. however, NetFlix’s price’s are already competitive.
Netflix represents a classical service business model in the video-on-demand industry where users of the service and payers are the same entity. Netflix was the pioneer who used this business model to offer entertainment content using video streaming technology in exchange for subscription fee.