1. What are three challenges that Netflix faces?
The video streaming market is becoming oversaturated with the ever-growing list of competitors. Netflix has never been profitable and in recent years they have increased their spending in order to create original content, but that doesn’t always translate into new subscribers.
2. What are the key elements of Netflix’s strategy today?
Creating original content that forces people to subscribe and stay on their platform in order to watch it.
3. Why is Netflix in competition with Apple, Amazon, HBO, and Google, and what strengths does Netflix bring to the market?
Netflix offers a wider selection of movies and TV shows to “stream” over their competitors and their original content will never able available for purchase in stores or rent at Redbox. Whereas Apple, Amazon, and Google’s content is available almost everything.
Identify three online sources of content that exemplify one of the three digital content revenue models (subscription, a la carte, and advertising-supported) discussed in the chapter. Describe how each site works, and how it generates revenue. Describe how each site provides value to consumers. Which type of revenue model do you prefer, and why?
Netflix is a media streaming service with a subscription base business model. The streaming service offers a wide range of movies and TV shows, both new and old, alongside their own original content.
Stock Photo is a website that is “a la carte” they sell digital license for individual photos, which is useful for finding the B-roll version of photos when creating digital media.
YouTube uses advertisers to generate their revenue, where ads are placed in various times throughout videos.
I prefer Netflix because it allows them to earn more revenue and that has translated into them creating new original content.
In 2014, Amazon purchased Twitch, which lets users stream their video games sessions, for almost $1 billion. Why would Amazon spend so much money on Twitch? Defend the purchase or explain why you think it was a bad idea.
The honest reason, because Amazon made a lot of money and in order to prevent them from paying taxes, they acquired Twitch, which will look like an expense. Thus, making it look as if Amazon is not profitable. That’s the main reason. Other reasons, Twitch was the largest let’s play streaming service on the market and has millions of daily users. So, it can be a good source of income.