Louis Gouge

ITS 380

Chapter 10

Case Study Questions

1. a.) Netflix challenges the cable television industry by offering an option for people to watch a television shoe whenever they want to. The customer does not have to wait until the cable company makes the show available. If the show is an older series the customer just makes a couple clicks and wait for the content to download.

b.) Netflix offers programming for the customer at the click of a button and the program is available to watch. This must be done by storing all that data in massive storage facilities and that is very expensive. Keeping all that data up and running takes a lot of work and that means spending an equal amount of money.

c.) If Netflix had the monopoly on this type of business it would be making tons of profit. Unfortunately, Netflix must compete with Apple, Google, Yahoo, Hulu, and Amazon. These other companies have had the advantage of learning what to do and not to do, and have tailored their options to perform better for the customers.

2. Netflix started to produce their own programs to try to reduce their costs to pay the owners of the original material for licensing. Netflix had a gross revenue of 5.5 billion dollars but it had to pay out over 5 billion in expenses that is why they wanted to produce their own programming.

3. Netflix does not require the subscriber to purchase an entire bundle or package to be able to view content. At this time, there is only a monthly fee to access all the programming you would ever want to see. The cable companies make you buy these bundles and the programming comes with channels the customer does not want. My opinion would be to offer only the channels I want at a lower price kind of like an ala carte version because I only watch a handful of programming my cable provider offers.

4. Netflix is in competition with these other providers because it offers similar available programming. These companies are competing for the advertising dollar and whatever company can say they reach out to more people the more they can charge for advertising. Netflix's strengths are the name. Everyone has heard of it so they already have brand recognition. Netflix also boasts the they have the biggest collection of movie databases than their competitors. Netflix is also producing their own content so they can generate more revenue from that without having to pay all the royalties to the other companies to let users watch it.


1. The three forms of convergence are: technological, content, and industry structure. It means being able to access content from media whenever the user wants it and being able to access it on any type of device like an Android device or an Apple device. It can be a mobile device or a desktop.

5. Music Subscription services use a combination of software and hardware encryption protection to protect digital content. Some companies allow free access to music but the user has limited options about skipping ads and or skipping songs. Pandora offers a commercial free service and a free service. It plays advertisements every couple of songs, and it only allows you to skip over so many songs until your daily or hourly limit is reached.

10. Book publishing is different from the magazines and newspaper industry. E-Books are very successful and it would seem the printed books would fall significantly but they haven't. Printed books are staying the same and have not dropped as one would believe.

15. The provider must have premium content that entices the user to want to pay for the content. It must be easy to use and have value that the users consider worth paying for it, and it should exceed or meet the expectations of the purchaser.

20. The 4 types of internet gamers are:

1) Casual gamer they play games on a laptop or on a personal computer.

2) Social gamer the play games on an app, or they use a web browser on a social network.

3) Mobile gamer use their mobile device like a smartphone or tablet

4) Console gamer play games using a console designed specifically to be used for gaming. They can play offline or online and can be connected to other gamers all over the world.

Over half of all online gaming revenue is purchased by console gamers because most of the mobile and desktop games are offered for free. Even though it costs more to play on a console harder core gamers use consoles or computers built specifically for gaming.


5. Twitch is a live stream that broadcasts in real time and hard core gamers can show others what they are capable of. I believe Amazon found an untapped resource where gamers are too busy playing games than watching regular media like television or movies. By purchasing this service Amazon can open the eyes of these gamers and show them new gaming products such as: laptops, keyboards, gaming mouse, and new consoles, or controllers. Since this type of service is only observed by gamers for gamers Amazon can focus all its advertising on what gamers want and not attempt to see them things they would not be interested in. I watch Twitch, and I purchased a new game controller from Amazon.