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Old 15th January 2012, 01:23 PM   #1
AngelBiz
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Default What Can Small Business Owners Learn From Netflix's Mistakes?

If you have been following business news in the last few months you know that Netflix is going through rough times. Their loyal customers are cancelling accounts in droves and the stock price that was around $300 just 6 months ago is now hovering around $70, wiping out almost $10 Billion in market value. Ouch!!

So what happened? Well, everything that could go wrong did. On one hand, the business of movie rental is going through massive shift Ė from DVD to streaming video and the competition is increasing with large companies including Apple, Amazon and Google entering the market. On the other hand, Netflix picked wrong time to make changes to their business model and made big gaffes in communicating to their customers.

Make no mistake. Netflix was and still remains one of the most innovative companies. After all, they disrupted the movie rental business and drove Blockbuster, along with smaller rivals, into bankruptcy. What happened to them could happen to any company if they are not careful. But there are important lessons to be learned from their mistakes to ensure you donít end up in similar situation. Letís look at them one at a time.

Read more - http://www.angelbusinessadvisors.com...flix-mistakes/

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Old 19th January 2012, 10:28 AM   #2
daveb1
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One of the biggest mistakes Netflix made was increasing there prices without justification. That alone cost them millions of dollars and alienated thousands of customers. Classic case of big company greed. They really botched there name change and business divisional shifts as well. Its amazing that a company with so many resources could make such bad decisions but its happened 100's of times in business and will happen again.

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Old 19th January 2012, 12:11 PM   #3
trade-show-diva
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I'm an old Netflix customer, and still use them.
Although they made some knee-jerk gaffes, I think they are also just facing a change in technology. They are the master of MAILING DVDs, but that technology is dying. The question is what they can do with STREAMING DVDs. They got off to a good start, but part of that was that they got a sweetheart deal on the cost for the streaming content (when others didn't recognize the potential). Now that contract is over, and they have to pay a lot more for the content. It's a tougher business when your costs go up!

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Old 19th January 2012, 12:46 PM   #4
HenryIgnition
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Quote:
Originally Posted by AngelBiz View Post
If you have been following business news in the last few months you know that Netflix is going through rough times. Their loyal customers are cancelling accounts in droves and the stock price that was around $300 just 6 months ago is now hovering around $70, wiping out almost $10 Billion in market value. Ouch!!

So what happened? Well, everything that could go wrong did. On one hand, the business of movie rental is going through massive shift Ė from DVD to streaming video and the competition is increasing with large companies including Apple, Amazon and Google entering the market. On the other hand, Netflix picked wrong time to make changes to their business model and made big gaffes in communicating to their customers.

Make no mistake. Netflix was and still remains one of the most innovative companies. After all, they disrupted the movie rental business and drove Blockbuster, along with smaller rivals, into bankruptcy. What happened to them could happen to any company if they are not careful. But there are important lessons to be learned from their mistakes to ensure you donít end up in similar situation. Letís look at them one at a time.

Read more - http://www.angelbusinessadvisors.com...flix-mistakes/
This definitely has been an interesting story to see develop in the past few months. Netflix does remain the leader in this industry, but they face competition coming from Blockbuster's version of Netflix.

I agree that their main downfall was changing price without known justification and splitting the business into streaming and rentals with Qwikster. They have a significant challenge in the coming months. A certain degree of rebranding may be of help to sway straying customers back through their "doors".

- HenryIgnition

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Old 30th January 2012, 04:12 PM   #5
DeniseTaylor
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Hi

I think Netflix problem is that customers aren't perceiving the value of Netflix' service. Of course, this fact is being pounded on hard by Blockbuster, who doesn't seem to want to give Netflix a break. But Blockbuster's service isn't that much better. So much of this is perception.

Netflix would do well to add value and take measures to overdeliver.

Right now, people are very focused on what they can get for their money.

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Old 7th February 2012, 07:37 PM   #6
iAmNameLess
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Are you copying these posts from entrepreneur magazine?

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