3 Rogerscasey Alternative Investments Innovative Response To The view website Challenge That Will Change Your Life At the risk of sounding too radical, why is Netflix (NFLX) seeking to create a new challenge to the distribution model that is typically seen as failing. What are the other options that might work out well for the company? A lot of the answer has to do with Netflix’s relationship with Aereo, the telecom giant, which has been involved in many entertainment, sports, and government-funded efforts to roll the Netflix network over to compete in the digital streaming arena. In general, Aereo is the clear leader in the field of distribution. Its customers love streaming content, and it understands the power of technology and its expertise. Just this year, Aereo reached 2,000 subscribers in the United States alone.
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Aereo’s success has helped Aereo grow its business in key creative hands across the country, in key content divisions along with selling subscriptions to most major film distribution media businesses including ABC, Disney, Universal, and “The CW.” Now, Aereo is talking directly to its customers. It gets, say, “1,300 VCRs to stream at 3 p.m.,” but it can change their lives.
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Its CEO, Danny Meyer, said Netflix is looking to offer 1,300 VCRs, or “controllers,” for all of its customers. (A Netflix spokesman declined to comment directly to me.) Sure, Aereo is looking at potential “hackers” and “videographers,” experts say. But perhaps most importantly, since Netflix has focused its efforts on innovative and effective solutions (primarily as an advertising and streaming service), its first target, “the distribution market,” and the value proposition of its subscribers, it’s being able to get with Aereo the opportunities that really matter most. The most direct outcome could be for Netflix to become a major game changer in its business model.
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By adding the concept of “pay TV,” or the service that includes personalized TV rights, Netflix could increase the value chains of their content for consumers. A giant competitor shopping service, Hulu, could also reach its markets. And what if Netflix introduced partnerships with others already adding subscribers? Not just in the US, but around the world. While Aereo’s successes over the past year have highlighted its ability to respond to consumer demand, the company’s “pay TV” strategy has also seen the pay TV segment increase in popularity. Aereo customers include broadcasters like MTV, Turner Broadcasting, The CW, PBS, and Time Warner Cable, as well as movies rental studios like Lucasfilm and Warner Brothers.
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And this is where Netflix is likely not just going to have to change its pricing model to be successful. Aereo also is building a strategy to build on their base of low-cost cable. In the years ahead, that line could merge with other distributors to allow people to pay monthly or even yearly, for a total of $39,880 or $143 they will pay for the entire season (through their credit card). For Aereo, this new $39,880 package represents approximately $90 per month (including fees and other charges) for 2K video. Netflix is also running into competition that offers more appealing and targeted packages than its traditional competitors.
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But if Aereo continues to grow revenues, the company may have paid its share to protect its business model. At the same time, with all the description coming in, Netflix is also running into new competition. It can offer services by video in the US, Canada, El Salvador, Colombia, and Mexico. It also can build its own popular program networks within the country. And so on.
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Whether over the next few years, Netflix will be more able to pay the above-average-by-all-the-prices incumbents that it once owned or “pay TV” distributors like Google’s Chromecast, can’t be known for certain. Regardless of Netflix’s future, it will always become important to expand the share of its customers. Let us know what you think. No. 1: Focused on Giving A Better View Of The World In any other startup, Netflix and its business model are already among the most attractive in the world.
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Think about that. Netflix is where you go to see a blockbuster like Fight Club, no matter if you prefer the viewing than the actual documentary. It is where you go to
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