The Rise of Netflix

           Once upon a time, Blockbuster Video was the premier video rental service in the United States.  For decades the dominant video store sprawled all across the country forcing mom and pop video rental stores out of business.  Independent video stores were no match for the multimillion dollar corporation and for many years they operated their business with virtually no competition.  But with the recent rise of online video streaming, Blockbuster is now a thing of the past. 

Netflix, which originally started as a monthly service providing movies by mail order, began incorporating this idea of instant streaming into their monthly package as they foresaw a rise in demand for the service.  Today, they are the leading provider of subscription live stream movies and television on the internet.  In 2011, Netflix surpassed the mark of 20 million subscribers in Canada and the US making it the second leading video subscription service behind only Comcast.  A recent study has shown that during peak the hours of internet use, 8 to 10 pm, Netflix streaming represents over 20% of the downstream internet traffic.  Needless to say, Netflix has become an extremely popular and profitable organization.

            But how did Netflix accomplish so much, so quick?  In my opinion, they got to where they are now by a brilliant marketing scheme that directs their streaming service right to their target market; young adults.  Now when you buy a Sony Playstation 3, Microsoft Xbox 360 or Nintendo Wii, all platforms come with a built in program that allows easy access of Netflix streaming as long as you have an active subscription.  So what does this mean to the consumer?  No longer do you have to sit in front of a tiny computer screen to watch live stream of your favorite shows; now you can watch them right on your television.  I personally have a PS3 and love the service offered by Netflix; it is just too cheap to pass up at only $10 per month.  It has even caused us to cancel our cable television as we no longer see the need anymore for Netflix has satisfied that need. That being said, I must admit their marketing strategy worked on me.

            What are your opinions of this service?  How often do you stream video on your computer or game system?  Do you personally have a Netflix subscription or do you still rent movies from the video store?  Also, what do you think of the recent emergence of Redbox?  Do you think it will threaten Netflix?

Here is the article I found that inspired this blog.

http://dealbook.nytimes.com/2011/02/24/blockbusters-fall-and-netflixs-rise-in-pictures/?ref=netflixinc