Value Chain Analysis

Topics: Television, Internet television, History of the Internet Pages: 4 (1376 words) Published: May 5, 2011
Camy Villegas
Assignment 1
Research Report
April 25, 2011

Information technology has become such an essential part of a company’s success in today’s world. As recent as 10 years ago it was unheard of to run a company solely though the internet. Today we have, which is one of the biggest internet companies and which led the way for the rest of them to follow. Another company that was born during the .com boom is Netflix. It got its start in 1997 as an idea to rent DVD’s over the internet. Founders Reed Hasting and Marc Randolph believed in the potential of the disc replacing the bulkier VHS tape and saw the bonus of its light weight which would help with the shipping costs.

Netflix did not have much competition until Hulu entered the market in 2007. However, Hulu had a different approach; they wanted to start a website where you can watch TV clips, full length shows, and movies. Hulu has provided people with a sense of choice. Until Hulu people were kind of forced into one direction as far as internet options. Unlike Netflix, Hulu is owned by NBC Universal and News Corp. they announced their new online venture in March 2007. Hulu does not rent DVD’s, everything is viewed online and you don’t have to download anything as long as you have a flash 10.0.32 enabled computer or device like an smart phone, tablet, smart TV, or gaming console.

Both Netflix and Hulu are taking advantage of the fact that today it is relatively cheap to stream on the internet for the average person. Things have changed since the internet became a household name; before a person had to have a land line to connect to the internet and it was very slow. On top of that you had to pay for service and physically connect a cable to your desk top. Today, we have lap tops with a wireless device and you are able to log on to the internet for free wherever you can find a signal typically a Starbucks coffee shop. Netflix and Hulu are essentially competing with the television set...

Cited: Thormahlen, Casey (Feb 2011); The big bang: Revenue will surge ahead, aided by strong advertising and demand; IBIS World Industry Report 51913b; Internet publishing and broadcasting in the U.S. (pg. 13, 26)
Thormahlen, Casey (Oct 2010); End of the reel: Demand will fall as consumers opt for video-on- demand and downloads; IBIS World Industry Report 53223; DVD, Game and Video Rental in the U.S. (pg. 26).
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