We have previously discussed in our COMM 101 class about the prosper of Netflix.  Its share price increased dramatically from 66.56 one year ago to 327.26 two days ago (Yahoo, 2013).  Now, Netflix is pushing the boundary by offering the streaming service directly available through cables in our homes!  It believes that by allying with cable operators, it will boost its subscriber base.  As Netflix started to offer the service in UK and Sweden recently, it is now considering allying with a U.S. cable operator.

However, I would not suggest Netflix making this move as the barriers to entry in the U.S. market is quite high (Ries and Trout).  Comcast has launched a similar service called Streampix last year.  Other cable companies are also trying to compete directly with the service instead of partnering with Netflix.

“While Netflix has almost 29 million paying subscribers in the U.S.,” but only “about 7 million total across 40 international markets,” Netflix’s first priority could be expanding and strengthening its market internationally (Luckerson).  It could pick a region with no similar service in the past, focus on building a subscriber base and reputation, and offer the service in that region.  As brand positioning is the key to success in business, this move will help it establish its leading position (Porter).

(Photo credit: via Netflix)

References:

Yahoo! CA Finance (2013). Closing Price. Retrieved Oct. 6, 2013. <http://ca.finance.yahoo.com/echarts?s=NFLX#symbol=nflx;range=1y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;>

Ries, Al, and Trout, Jack. “Product Positioning.” Positioning: The Battle for Your Mind. QuickMBA. 2010. <http://www.quickmba.com/marketing/ries-trout/positioning/>

Luckerson, Victor. “Netflix Is Coming After Your Cable Box.” Time. 1 Oct. 2013. <http://business.time.com/2013/10/01/netflix-is-coming-after-your-cable-box/?iid=biz-main-belt>

Porter, Michael E.. “Porter’s Five Forces.” Competitive Strategy: Techniques for Analyzing Industries and Competitors. QuickMBA. 2010. <http://www.quickmba.com/strategy/porter.shtml>