In order to keep up with their three strengths, convenience, value, and selection, Netflix should continue to focus on catering to their long tail customers. They can do this by increasing their selection of "long tail" videos. This way they can reap more profit, offer more options, minimize waiting time for movies, and gain more customers. It is also important that Netflix keep an eye on the VOD market as well as internet streaming options. It may be beneficial for them to choose a compatible area or customer segment in which to test either of these options. This may help them forecast their strength if implemented nationally.
For Netflix to stay competitive, I beleive they need to offer online streaming. People find themselves watching movies more and more on their computers in hotels, on buses, planes, or even on their iphones or ipods. Technology like this that already exists will make Netflix's online streaming option a popular hit. They should also look into ways people can stream Netflix to their computer and then from the computer to their TVs without jeopardizing quality. This will really increase the convenience and value that Netflix gives to their customers. I have Netflix right now, and sometimes forget to return my movies for a few days and then regret that later when I don't have a new movie to watch. Online streaming would minimize or demolish this problem. Another plus is that online streaming will help reduce the cost Netflix has for using the US postal service shipping methods. I'm sure they have some sort of deal worked out, but postage is only getting more expensive and when shipping as many movies as Netflix does, small price increases in postage could significantly increase their expenses.
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