Changing technology and shifting customer preferences with respect to movie distribution led to the demise of Blockbuster Video. Meanwhile, Netflix grew to become the top rent-by-mail and video streaming company, while other strong competitors emerged to dominate movie distribution via kiosks (Redbox) and online (Apple, Amazon, Hulu, and others). Looking to the future, Netflix's survival depends on its ability to adapt to and adopt new technology and marketing practices-issues Blockbuster failed to navigate due to its reactive, rather than proactive, stance toward a rapidly changing market.?
1. As the use of DVDs declines and streaming continues to grow, Netflix faces a somewhat uncertain future. What strategic changes will Netflix have to make to remain competitive in the future?
2. From a supply chain perspective, Netflix will always be somewhat vulnerable because it does not own/control the source of supply (movies). How can Netflix insulate itself from this threat to its existence?
3. Many have argued that Netflix must more vertically integrate its operations in order to be viable in the future. This means acquiring sources of supply (movies, movie studios) or other avenues for distribution (kiosks, TV or cable networks, wireless providers). Prepare a list of pros and cons related to various integration options that Netflix could pursue.