Netflix competitive analysis Essay

This essay has a total of 529 words and 3 pages.

Netflix competitive analysis

Competitive Analysis
Blockbuster Inc. and Movie Gallery are currently the two strongest competitors in the
market, and therefore pose the biggest threats to Netflix. Amazon, Intelliflicks, and
Cleanfilms are all present in the market, but don't possess enough force at this time to
be considered a threat to Netflix.

Blockbuster
As of right now, Blockbuster is the biggest competitive threat to Netflix. Blockbuster was
incorporated in 1989 in Delaware and is a major renter of home videocassettes, DVDs and
video games throughout the Americas, as well as Europe, Asia and Australia. Blockbuster
operated about 9,100 stores in the U.S. and 24 other countries, as of Dec. 2004. In the
summer of 2004, Blockbuster launched an online rental program that provides a challenging
competitive match for Netflix. Blockbuster's online debut was in development for years. In
2002 Blockbuster purchased FilmCaddy, an online movie rental company that became
Blockbusters internet channel. Blockbuster completed consumer research, both qualitative
and quantitative, and found that online customers preferred a program that would give them
both Internet convenience and in-store benefits. Blockbuster decided to incorporate its
extensive network of stores to provide a powerful competitive edge. In addition, the chain
has said it will invest $170 million this year alone in its online-rental operation.
Financially, Blockbuster has revenues of 6.10 billion, with a gross profit of 3.61
billion, and a negative net income of 1.42 billion. Blockbuster currently offers a lower
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