The internet has revolutionized many business practices. Many entertainment companies are currently using the internet to fulfill the needs of their consumers. Netflix uses an internet-based model to market and sell its movies. Many companies such as Redbox are also using different online strategies to market their movies. Amazon is also a leading marketer of movies in many parts of the world (Wittekind, 2012). This research paper identifies how Amazon and Netflix compete with each other to deliver movies to their customers.
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Various movie companies such as Home Box Office (HBO) own Amazon’s hardware. This cable television network is a subsidiary of Time Warner. Amazon also shows movies from Epix TV channel. The practice has made Amazon a leading competitor in this sector. Netflix avails its on-demand movies to its customers in American, Europe, and the Caribbean. Starz Entertainment owns most of this hardware content. In 2011, “Netflix announced its partnership with Lions Gate Entertainment and Paramount Pictures” (Lusted, 2012, p. 47). The company also distributes various TV programs from Sony Pictures, Warner Bros, Disney, and Sony Pictures.
Every company marketing its products via the internet should pay for bandwidth. Netflix uses AmazonWebServices to avail its movies to every user. Netflix pays for bandwidth in order to achieve its goals. Netflix’s prices for its movies are reducing because of the falling bandwidth. Netflix pays “around $200 million annually as bandwidth fee” (Lusted, 2012, p. 68). Amazon also uses similar approaches to pay for bandwidth.
Customers can either purchase or rent a movie from these two companies. Netflix provides a flat-fee for DVDs and Blu-Ray discs. Customers can also order or download movies from the company’s website. Customers can either stream movies online or get their DVDs by mail. Customers can also purchase packaged movies from Netflix’s website. Customers can collect their movies from different collection centers. Amazon lets its customers download High Quality (HQ) copies of various movies. Customers can also purchase their favorite films online. Most of “Amazon’s movies are obtainable through streaming” (Wittekind, 2012, p. 48). The customers return these rented movies to these companies before ordering new ones. Such practices have promoted the performance of these competing companies.
YouTube might become a disruptor for these providers because it uses an ad-based model. YouTube avails its movies free of charge to its viewers across the globe. Most of these movies have many viewers in many parts of the world. The ad-based model focuses on promoting various services and products. The practice reduces the number of customers who purchase or rent movies from Amazon and Netflix (Lusted, 2012). YouTube uses a simple video hosting service whereby users can upload and share video content. YouTube provides a hosting service or application to make video hosting possible. Two PayPal workers created YouTube in 2005. Google Incorporation currently owns YouTube.
The movie services availed by YouTube, Amazon, and Netflix have changed the way consumers watch and purchase different video contents. These online-based services are different from those of iTunes. Apple Incorporation introduced iTunes to “help customers organize, share, and enjoy different contents such as movies, TV shows, music, applications, and books” (Lusted, 2012, p. 79). Users can shop for new books, applications, and movies from iTunes. Apple’s iTunes is a powerful approach because it attracts more customers.
These media providers will be profitable in the future because more customers are purchasing their products online. These providers will continue attracting more customers. I would consider some of the major concerns affecting these cloud-based models. The first concern would be the problem of hacking and fraud. Many companies will lose their profits because of this insecurity (Wittekind, 2012). The other concern is the level of competition in this sector. I will address such concerns in order to make my media provider successful.
Lusted, M. (2012). Netflix: The Company and Its Founders. New York: Essential Library.
Wittekind, E. (2012). Amazon.com: The Company and Its Founders. New York: Abdo Publishing Company.