Question Description
I'm working on a business case study and need an explanation and answer to help me learn.
Please answer the following five questions about Reed Hastings and the media company he or she
created (Netflix):
• How did the media entrepreneur come up with the concept for his or her company?
• What is the value proposition of his or her media company?
• How does the business model of his or her media company work?
• How did his or her media company disrupt its media competitors?
• In your readings, what surprised you most about your media entrepreneur choice?
Explanation & Answer
View attached explanation and answer. Let me know if you have any questions.Hi, I finished. Please check my work and contact me if you have any doubts.
Reed Hastings and Netflix
Question 1: How did the media entrepreneur come up with the concept for his or her
company?
Netflix has evolved from a small competitor of Blockbuster to one of the most important
entertainment companies in the world. It all started in 1997 when its founders, Reed Hastings
and Marc Randolph, decided to rent DVD’s by mail (Netflix, 2022a). The company was founded
in Scotts Valley, California, which is a small city in the Santa Cruz County. Back then, their
inspiration was Amazon which mostly sold books online but the company was unable to grow as
expected. Probably the greatest innovation of the initial years was to create a DVD monthly
subscription service that included unlimited DVD rentals without due dates or late fees (Netflix,
2022a). This was a major difference with he industry’s leader, Blockbuster, that charged fees for
every DVD rented, late fees, and established short due dates. An initial version of the Netflix
algorithm for recommending movies was launched in 2000. The company went public in 2002
and reached 1 million active subscribers by 2003.
All these events were part of a dying industry that Netflix would replace. It is also worth noting
that Hastings offered Netflix to Blockbuster in 2000 for $50 million (Miller, 2018).
Blockbuster’s CEO was unable to understand that the industry’s future would be online. By
2005, YouTube was launched and it was an immediate hit (Leskin, 2020). Even though Netflix
does...
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