Blockbuster vs Netflix

Trends

Current Market Conditions

The media-rental industry has changed rapidly over the last decade, and will continue to change rapidly for at least the next decade to come. Over the last decade the most dramatic shift was from physical rentals (e.g., VHS tapes and DVDs) to online streaming. New trends now include:

• Using “big data” to understand customer actions
• Serial viewing
• “Cutting the cord”

Strategic Plan I

History of Blockbuster

Current Market Position – Netflix

• December 4, 2012, Netflix and Walt Disney Company declared a multi-year U.S. subscription television service agreement.

MISSION: To become the worlds largest movie rental and online movie and entertainment subscription service.

• January 14, 2013, signed an agreement with Time Warner subsidiaries, Turner Broadcasting System and Warner Bros to disseminate content.

Grow and Expand Blockbuster’s Core Entertainment Business

• First store opened in 1985 in Dallas, TX
• 2004 was Blockbuster’s peak – had 60,000 employees and more than 9,000 stores
• January 1, 2005, the Company eliminated late fees
• As of January 3, 2010, there were over 6,500 Blockbuster stores in the U.S. and 17 countries worldwide
• On September 23rd 2010 – filed for Chapter 11 bankruptcy and bought by satellite television provider Dish Network

Close all non-profitable retail brick & mortars, primarily in urban areas.

• Assuming bandwidth remains affordable, Netflix services will grow. The video streaming service’s position as the premier use for bandwidth advertised by cable providers provides the company with a considerable edge over the competition.

Introduction and Objectives

Table of Contents

SWOT Analysis

• Blockbuster is an American-based provider of home movie and video game rental services.
• Originally owning physical video rental shops then later added DVD by mail, streaming

QUESTIONS?

Vs

• Introduction and Objectives
• History of Blockbuster
• History of Netflix
• Current Marketing Position - Blockbuster and Netflix
• Looking Ahead: Expectations
• SWOT Analysis
• Strategic Plan
• Marketing Plan
• Q&A

Thank you and goodnight.

• Netflix is an internet subscription service streaming TV, shows, and movies. Consists of three segments:
• Domestic streaming
• International streaming
• Domestic DVD distribution

Arin Chadwick, Amanda Sahl, Andrea Synborski, David Azer, David Saulter

Strategic Plan II

History of Netflix

Current Market Position – Blockbuster

• Founded in August of 1997
• Website launched In April of 1998
• May 2002, created Initial Public Offering (IPO)
• In February 2007, the company delivered its billionth DVD and transitioned from its original core business model of mailing DVDs by introducing video-on-demand via the Internet.
• 2012-Netflix surpassed 30 million members globally.

• Aggressively expand the kiosk rentals in retail stores.

Blockbuster partnership with premium cable channels

(HBO, Showtime).

• Partner with an online presence (Google / Facebook) to provide the technical platform and expertise, engage in cross promotional marketing.

• Help customers “cut the cord"

• Merge with a cellular provider* to provide customers with bundled services

• Offer unlimited streaming content* to mobile devices

• December 31, 2012 - the company offered subscribers the ability to receive streaming content.
• This year Blockbuster will be closing approximately 300 stores, 500 stores will remain open.
• Blockbuster Express, their kiosk business, lost competition to Redbox.
• Dish Networks $320M purchase in 2011 seemed attractive at the time. However, the company has failed to transform Blockbuster’s antiquated business model into a Netflix rival.

*Dish network issued a $25B bid for Sprint on April 15, 2013

Marketing Plan

• Distribution. Dish Network and Blockbuster can work together to expand its distribution options, particularly in the mobile market.

• Placement. Many customers are not aware that Dish Network is the owner of Blockbuster. This partnership has the potential to attract new customers through increased customer service products.

• Advertising and Promotion. The movie industry should use the Blockbuster name, which still holds strong brand recognition, while Blockbuster could use cross-promotional advertising to point out the rapid and exclusive availability of some content shortly after it has been released.