1. Three challenges that Netflix faces are streaming content providers with deep pockets, risks associated with producing original content, and the ever-increasing cost of acquiring video content. Streaming technology is well established and other tech giants with lots of capital like Google could launch a direct assault on Netflix through imitation of their business model. Making original video media content is very risky. Bad content is churned out routinely by media giants because they can afford to; smaller production houses must be more selective and careful in what they produce so they can please an audience and critics, and not hemorrhage money. Popular media content from the past is realizing astounding new values in today’s domestic market like never before; even some very old shows that are still popular command a cost for viewership through media outlets.
2. Netflix’s key strategy is to be a viable alternative to cable (and satellite) television providers. To do this they must provide massive amounts of content to a gigantic audience. Another element to this is the shaping of their customer information. As content is accessed by customers, the firm makes recommendations for additional content consumption, which is then acted on by viewers. This builds revenue growth over normal usage. Another avenue the company is taking is to own original content it distributes; in that way the relative profit margin is higher than it would be for redistributed content otherwise, but as noted, comes with risk. A risk that probably has to be taken, considering probable saturation of their streaming market share.
3. The implications of Netflix’s strategy for cable media giants is that those competitors can’t slack off at all on the quality of the content that they provide. Also, mismanagement of user data would be highly detrimental. This is true in any firm, but especially true in the video media racket because success is so dependent on predicting users’ tastes.
4. Netflix is in competition with Apple and Amazon because they are very similar content providers; their core competencies of streaming media delivery are nearly the same. Google is a little different. Google is not really a competitor but more of a direct threat. It’s a threat because they have the technical ability to provide the same service, but much deeper pockets, should they decide to seriously enter the market against Netflix, they have the potential to overwhelm. Netflix still brings strengths to the market that are hard to compete with. One is strategic and sufficient infrastructure server placement to ensure quality streaming to nearly the entire market worldwide. Another strength is great care in managing user information to force-multiply growth through successful content recommendations.
4. While not technically a magazine, it might as well be: The Wall Street Journal. Instead of a daily newspaper it is really a daily magazine. It is one of the few newspaper periodicals to thrive in media convergence. One of the reasons is exactly because it is more like a magazine than a traditional newspaper. The online version has the advantages of interactivity, rich multi-media content, and the ability to report breaking news in real time (including updated financial data better than nearly anyone) faster than the print edition’s 24-hour cycle. One disadvantage is that some content distribution control is lost in the online version, because people can copy text digitally from accessible information, but this is mostly related to older, valuable content used as reference material for research. The obvious strength both versions share uniformly is the high journalistic integrity and solid reputation of depth and reach enjoyed by this organization.
Convergence has occurred in the online magazine industry in the forms of technology platform, content design, and organizational structure. Successful organizations that are media (news) outlets have primarily become omni-channel for the most part. They are structured organizationally for command and control to deliver uniform text and multi-media content across a spectrum of delivery methods including print, radio, television, internet, and mobile (including interactive over these last two, especially social media). Content design, and especially content, are what set them apart from each other, and where they primarily differ; this of course depends on organizational missions and goals, which of course very wildly, but with one similarity in that they seek to maximize distribution of their content.
5. Amazon’s purchase of Twitch was a good move. Twitch has 100 million users. This means that at about $1B, their cost per lead was about $10. Comparatively speaking, this is a bargain when, according to surveyanyplace.com in 2017 a social media lead cost $27 and a search engine advertising lead cost $60. As a giant multi-media content provider, online gaming, or things to do with online gaming can’t be ignored. In the old days when difficult video games were popular users had to buy aftermarket magazines that showed them how to crack the game’s challenging sequences to win. No more. Now users only have to watch someone else perform the moves in real-time or from saved video online. Enter Twitch, which provides this type of access and content. Amazon not only got a customer lead bonanza, but also expanded its ever-growing multi-media market which it needs to keep doing to continue to grow and stay dominant in the multi-media delivery market.