I recently read that Netflix is foraying towards the field of film production (http://www.bnn.ca/News/2014/9/30/Netflix-to-make-big-screen-debut-with-Crouching-Tiger-sequel.aspx).

Starting from renting DVDs, Netflix is acquiring an increasing amount of attention in the field of online TV streaming.

In many journals or articles, it is stated or implied that it is almost impossible to replace a No.1 brand name. However, I am very confident that Netflix will become the leading company if it keeps going in the same pace, as we can see from the chart above.

So why the brand name effect (that customers tend to remember the first big brand that appear on the market even if it later loses quality) does little work in this case (unlike other leading brand in other field such as clothes and beverage)? Personally, I think it is because that the qualities of different movies made by different companies are highly differentiable, unlike , for example, the same beverage with different brand. Every movie is different, and it is easy to tell which one is one person’s type.

 

Another important point is that, when choosing to watch a movie, one does not tend to look at which company produced it. Instead, before buying clothes, one would most likely look at the brand first. Therefore, I could say that in most fields, brand brings about customers while in the TV field, qualities make a brand popular.