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

• Brand

• Scale

– Distribution Centers

– Customers

– Selection

• Data / Switching Costs

Key Resources for Comp. Adv.

Distribution Centers

Economies of Scale

Subscribers:14 million

Subscribers:2.2 million

Cost to run the effort:$300 million

Cost to run the effort:$300 million

Vs.

Source: Wired

Long Tail: businesses that can profitably offer a great volume of less popular products

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