In the changing landscape of media, Netflix’s position is under siege on a number of different fronts. There are companies that are providing similar video streaming services including Hulu and Amazon. There are also battles with content providers to make exclusive deals with one of these streaming service providers. Not surprisingly, Netflix has vertically integrated into the content creation business to help drive indirect network effects. This case helps us understand Netflix’s many lines of business and how they drive direct and indirect network effects.
Read the Ivey Case: Netflix (CP)
Case write up-questions:
- Describe Netflix’s strategy to help promote direct and indirect network effects.
- How is Netflix positioned relative to Disney? Are there any particular strategies used by Netflix that can enhance their relative position?
- Do you think Netflix or Disney is in a better position to capitalize on their relative advantages with respect to network effects? Why?