Suppliers adopt strategies such as patents in order to acquire supremacy within the industry. Companies provide attractive movie prices and services in order to control the buying power of their customers. Buyers have several companies to choose from, and these companies must strive to keep their customers. Competition is high in the movie rental industry due to easy entry by new companies. There are several companies with similar products at reduced prices, which increase competition. Some of the new entrants provide substitute products such as cable services. Customers subscribe to cable providers, and they gain access to several movies at a reduced monthly price. Competitive rivalry between companies creates the need for new strategies and businesses enjoy a competitive advantage only for a short time. One of the five forces of competition is supplier power. Companies in the rental business acquire their content from studios and movie distributors. The movie industry has several studios such as Walt Disney, Pixar, and Warner Bros and other distributors from which rental companies can choose from. The number of suppliers and the uniqueness of their products determine the supply prices. Blockbuster purchased Movielink which is a leading movie downlink service and reduced the need for DVD’s and plastic cases (Blockbuster Corporate, 2009). Suppliers and distributors who deal with DVD movies will experience reduced purchase power. Blockbuster customers can purchase and download movies from Movielink which reduces the need for DVDs. Netflix acquires its content by buying DVDs from studios and distributors, paying on a fee-per-DVD basis (Thompson, Strickland, & Gamble, 2009). Some suppliers offer unique products, which reduces the chances of substitution. Movie studios and distributors generate revenue by selling movies to rental companies and a large number of viewers. This creates a symbiotic relationship between suppliers and rental companies, which controls supply prices. Buyer power in the movie rental business is usually high due to the wide range of movies present in the market. There is no legal substitute for movies in the market, which makes rental companies dictate the market prices. The industry has few operators who have similar product prices and deal in almost similar products. This enables the companies maintain high prices affordable by several buyers since they do not buy large volumes of movies. Netflix has over 8.4 million subscribers who prefer online browsing and mailbox delivery of movies. There is no cost of cancelling subscriptions and switching to other companies; therefore, there is little migration of customers. Blockbuster utilizes total access sealed envelopes that can be traded for movies at no extra cost. Buyers can utilize these envelopes to purchase movies of their choice from the local stores without incurring any shipping charges. Movie rental companies offer downloadable movies to increase the buying power of their customers. Competitors may offer different prices to attract more buyers. Redbox offers its customers reduced prices in order to have a competitive advantage over Netflix and Blockbuster. The high demand for entertainment across the world provides rental companies with large numbers of customers. The presence of substitute products in the market creates competition between different businesses in the industry. Customers have a wide range of entertainment products to choose
Competition in the Movie Rental Industry Name Institution Tutor Date Competition in the Movie Rental Industry The movie rental industry has attracted many business organizations in the last few years. These organizations continuously adopt new techniques and ideas to maintain a competitive advantage…
A look at his film career and the masterpieces thus evolved, is enough to mark his uniqueness, both as a director and a special effects artist. The director who resurrected the thrill of science fiction, giving Hollywood a new high, is a visionary who dared to think beyond the main stream.
It is, certainly, a benefit since the movie audience has expanded. On the other hand, film has to face an increasing competition from other leisure activities as Americans became disenchanted with the type of passive entertainment. So far, Hollywood has been successful in gaining competitive advantage.
It was founded in 1998 and is based Los Gatos, California. The company offers on-demand internet streaming media in the U.S., Canada, and Latin America and has announced that it will expand it operations into the European market starting with Spain by 2012 (Whitehouse, 2011).
According to the report Blockbuster was taken over by Wayne Huizenga, one of the founders and chief investors in Waste Management. Huizenga enacted an aggressive expansion policy, purchasing a number of independent video rental chain stores and franchises, and converting these stores into Blockbuster video rental shops under the national brand.
Technology advances regularly, thus, by engaging customers in the latest technology, it allows them to keep in pace with the advancing technology. In addition, despite the company being in the industry where profitability is the priority, it promotes ethics by ensuring that customers are well informed of the movies so that they may make their own choices.
(i) The customer’s willingness to pay for a movie rental is equal to the value that the customer perceives to realize or benefit for the cost paid for renting a movie. The customer’s willingness to pay is the benefit that would be derived from watching the movie.
The delays in the maintenance had been a cause of regulatory concern, as well as a probable cause of various problems in the airplanes, including incidences where seats detached in mid flight causing concerns over the well-being and security of passengers.
It is well known that new generation of cars that work without fuel is going to replace the way people see vehicles. Moreover, switching to electric vehicles will allow to get rid of oil dependency for many countries. There will be no prices