Deck 4: Netflix in Two Acts: the Making of an E-Commerce Giant and the Uncertain Future of Atoms to Bits
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Deck 4: Netflix in Two Acts: the Making of an E-Commerce Giant and the Uncertain Future of Atoms to Bits
1
Netflix gets to retain the entire subscription revenue for every disk sent out to a customer.
False
2
_____ played a starring role in developing assets such as scale, brand, and switching costs that combined to place Netflix atop its industry.
A) Infrastructure
B) Vertical integration
C) Point-of-sale management
D) Personal digital assistants
E) Technology
A) Infrastructure
B) Vertical integration
C) Point-of-sale management
D) Personal digital assistants
E) Technology
E
3
Firms target high churn rates to boost their profitability.
False
4
At Netflix, the majority of the DVD titles shipped are from back-catalog titles, not new releases.
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5
The _____business built Netflix into a sector-dominating powerhouse.
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6
Both Blockbuster and Walmart were synonymous with a DVD-by-mail subscription service.
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7
Even though Netflix is now mainly focused on digital distribution, it continues to offer the DVD-by-mail service in its base-price product.
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8
Netflix got its start offering:
A) internet search services.
B) an online networking service.
C) retail fashion.
D) a DVD-by-mail service.
E) online gaming services.
A) internet search services.
B) an online networking service.
C) retail fashion.
D) a DVD-by-mail service.
E) online gaming services.
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9
Once Netflix became a public company, the firm was required to disclose its financial position and reveal it was on a profit march.
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10
Provide a brief description of the basics of the Netflix business model.
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11
Cinematch develops a map of user ratings and steers users toward titles preferred by people with tastes that are most like theirs.
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12
Brand and advertising are synonyms for the same concept.
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13
Durable brands are built through customer experience.
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14
Although sometimes referred to as "rental," Netflix's model is really a substitute good for conventional use-based media rental.
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15
Netflix's initial revenue model was based on a flat-rate monthly subscription fee rather than a per-disc rental fee.
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16
Describe Netflix's business model in present times.
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17
Netflix never provided a good customer experience to its customers.
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18
Which of the following is true of Netflix?
A) It started as two separate services but is now viewed as a single subscription.
B) It operates via a DVD subscription and video-streaming model.
C) It isn't a substitute good for conventional use-based media rental.
D) It got its start offering a DVD-by-mail service for an annual, per-disc rate subscription fee.
E) It started out as an IPO.
A) It started as two separate services but is now viewed as a single subscription.
B) It operates via a DVD subscription and video-streaming model.
C) It isn't a substitute good for conventional use-based media rental.
D) It got its start offering a DVD-by-mail service for an annual, per-disc rate subscription fee.
E) It started out as an IPO.
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19
The high degree of customer satisfaction that Netflix enjoyed is tightly linked with the firm's sized-based advantages.
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20
Physical retailers are limited by shelf space and geography.
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21
By going public, Netflix encountered stiff competition from firms such as Wal-Mart and Blockbuster. What aspect of Netflix going public lured these firms into the market?
A) By going public, Netflix was required to disclose its financial position.
B) By going public, Netflix was forced to reveal the Cinematch algorithm used to classify user ratings.
C) Netflix's model of flat-rate monthly subscriptions was found to be more profitable than a per-disc rental fee model.
D) Netflix's plan to enter the online movie streaming market alerted rivals to the possibility of losing their market share.
E) The migration of Netflix services to cover the Blu-ray disc market opened up opportunities for rivals.
A) By going public, Netflix was required to disclose its financial position.
B) By going public, Netflix was forced to reveal the Cinematch algorithm used to classify user ratings.
C) Netflix's model of flat-rate monthly subscriptions was found to be more profitable than a per-disc rental fee model.
D) Netflix's plan to enter the online movie streaming market alerted rivals to the possibility of losing their market share.
E) The migration of Netflix services to cover the Blu-ray disc market opened up opportunities for rivals.
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22
How is the collaborative filtering software used by Netflix advantageous to the firm?
A) The superior coding technique used in the software provides Netflix with a competitive advantage over its rivals.
B) The collaborative filtering software used by Netflix is truly platform-independent and can be reliably used by all users.
C) The open source nature of the collaborative filtering software ensures that users can constantly incorporate changes in the code to make it more accurate.
D) The software automates the process of sorting and queuing movie titles requested by users as they move in and out of the warehouses.
E) The software has created an enormous data advantage, that is valuable, results yielding, and difficult for newcomers to match.
A) The superior coding technique used in the software provides Netflix with a competitive advantage over its rivals.
B) The collaborative filtering software used by Netflix is truly platform-independent and can be reliably used by all users.
C) The open source nature of the collaborative filtering software ensures that users can constantly incorporate changes in the code to make it more accurate.
D) The software automates the process of sorting and queuing movie titles requested by users as they move in and out of the warehouses.
E) The software has created an enormous data advantage, that is valuable, results yielding, and difficult for newcomers to match.
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23
Brands are built through _____.
A) customer awareness
B) data assets
C) excessive advertising
D) customer profiling
E) customer experience
A) customer awareness
B) data assets
C) excessive advertising
D) customer profiling
E) customer experience
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24
Within the DVD-by-mail segment, Netflix is now bigger than both Wal-Mart and Blockbuster.
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25
Netflix has used the long tail to its advantage, crafting a business model that creates close ties with film studios. What do film studios stand to gain from these ties with Netflix?
A) Discounted fees for marketing some of the less-popular titles from the studios
B) A cut of the subscription revenue from every disk sent out by Netflix
C) Greater bargaining power with movie rental firms such as Netflix, Blockbuster, and Wal-Mart
D) Lower costs related to screening movies in cinemas by releasing them straight on DVD
E) An equal share of revenue from the digital distribution model through online streaming
A) Discounted fees for marketing some of the less-popular titles from the studios
B) A cut of the subscription revenue from every disk sent out by Netflix
C) Greater bargaining power with movie rental firms such as Netflix, Blockbuster, and Wal-Mart
D) Lower costs related to screening movies in cinemas by releasing them straight on DVD
E) An equal share of revenue from the digital distribution model through online streaming
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26
Even if Netflix gave Cinematch away to its rivals, they would still not be able to make the same kind of accurate recommendations as Netflix. This is because of Netflix's _____.
A) technological superiority
B) customer loyalty
C) movie expertise
D) data advantage
E) large inventory
A) technological superiority
B) customer loyalty
C) movie expertise
D) data advantage
E) large inventory
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27
In exchange for a percentage of the subscription revenue for every disk sent out by Netflix, movie studios offer Netflix:
A) online streaming rights free of cost.
B) higher fees for marketing less-popular movies.
C) their DVD catalog at a wholesale price.
D) distribution rights to certain movies free of cost.
E) strong bargaining power in negotiations for digital distribution rights.
A) online streaming rights free of cost.
B) higher fees for marketing less-popular movies.
C) their DVD catalog at a wholesale price.
D) distribution rights to certain movies free of cost.
E) strong bargaining power in negotiations for digital distribution rights.
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28
The high degree of customer satisfaction that Netflix enjoyed is tightly linked with the firm's _____ advantages.
A) geographical
B) size-based
C) infrastructure
D) talent-based
E) technological
A) geographical
B) size-based
C) infrastructure
D) talent-based
E) technological
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29
Collaborative filtering is a classification of software that:
A) is used to gather user ratings and calculate a gross average user rating for each movie.
B) provides Netflix users with parental controls and other options while streaming movies online.
C) selectively sorts movies based on their censor ratings and delivers age-appropriate search results.
D) monitors trends among customers to personalize an individual customer's experience.
E) collates user ratings for a movie and creates a ranked list of movies most liked by users.
A) is used to gather user ratings and calculate a gross average user rating for each movie.
B) provides Netflix users with parental controls and other options while streaming movies online.
C) selectively sorts movies based on their censor ratings and delivers age-appropriate search results.
D) monitors trends among customers to personalize an individual customer's experience.
E) collates user ratings for a movie and creates a ranked list of movies most liked by users.
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30
_____ is a term that can be used to refer to the extent to which recommended titles form a part of the content users place in their queues.
A) Market share
B) Penetration rate
C) Marginal factor
D) Churn rate
E) Queue turns
A) Market share
B) Penetration rate
C) Marginal factor
D) Churn rate
E) Queue turns
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31
User ratings act as _____ for Netflix's customers.
A) marginal costs
B) fixed costs
C) switching costs
D) variable costs
E) barriers to entry
A) marginal costs
B) fixed costs
C) switching costs
D) variable costs
E) barriers to entry
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32
The true exploitable resource created and leveraged through collaborative filtering technology is the data asset.
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33
Netflix offers its subscribers a selection of over one hundred thousand titles, while other video rental firms can only offer as much as three thousand. This presents a significant _____ for Netflix over its rivals.
A) marginal cost
B) price advantage
C) variable cost
D) studio preference
E) scale advantage
A) marginal cost
B) price advantage
C) variable cost
D) studio preference
E) scale advantage
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34
For traditional retailers selling physical goods, _____ is the biggest constraint limiting a firm's ability to offer customers what they want and when they want it.
A) shelf space
B) video piracy
C) shipping costs
D) distribution rights
E) disintermediation
A) shelf space
B) video piracy
C) shipping costs
D) distribution rights
E) disintermediation
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35
How does the Cinematch recommendation system work?
A) Cinematch develops a map of user ratings and steers users toward titles preferred by people with similar tastes.
B) Cinematch gathers user ratings to calculate a gross average user rating which is continually updated with each subsequent user rating.
C) Cinematch requests users to create profiles detailing their interests and preferences and serves recommendations accordingly.
D) Cinematch uses a team of professional movie critics to create a comprehensive ranking system for each movie in its inventory.
E) Cinematch ranks movies in two separate lists based on their critical and box office ratings, and subsequently alters user preferences.
A) Cinematch develops a map of user ratings and steers users toward titles preferred by people with similar tastes.
B) Cinematch gathers user ratings to calculate a gross average user rating which is continually updated with each subsequent user rating.
C) Cinematch requests users to create profiles detailing their interests and preferences and serves recommendations accordingly.
D) Cinematch uses a team of professional movie critics to create a comprehensive ranking system for each movie in its inventory.
E) Cinematch ranks movies in two separate lists based on their critical and box office ratings, and subsequently alters user preferences.
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36
While the size of the tail in the long tail phenomenon is disputable, one fact that is critical to remain above this debate is that:
A) traditional brick and mortar retailers offer selections that cannot be rivaled by Internet pure-plays.
B) energy costs and worker wages drive up the costs of running stores like Netflix.
C) customers are primarily attracted to the stores which offer a larger selection of titles.
D) the turnover rate of obscure titles in traditional video rental stores is only slightly higher than those for Internet pure-plays.
E) the cost of store maintenance and real estate makes stores such as Netflix unattractive.
A) traditional brick and mortar retailers offer selections that cannot be rivaled by Internet pure-plays.
B) energy costs and worker wages drive up the costs of running stores like Netflix.
C) customers are primarily attracted to the stores which offer a larger selection of titles.
D) the turnover rate of obscure titles in traditional video rental stores is only slightly higher than those for Internet pure-plays.
E) the cost of store maintenance and real estate makes stores such as Netflix unattractive.
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37
Internet retailers serve a larger geographic area with comparably smaller infrastructure and staff. This fact suggests that Internet businesses are more _____.
A) centralized
B) decentralized
C) capitalized
D) vertically integrated
E) scalable
A) centralized
B) decentralized
C) capitalized
D) vertically integrated
E) scalable
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38
The long tail is a phenomenon whereby firms can make money by:
A) selling the same product at different prices with only minor tweaks in their design.
B) leveraging customers to promote their products or services.
C) reselling multiple versions of a single product under different brand names.
D) offering a near-limitless selection of products or services.
E) performing different tasks than rivals or the same tasks in a different way.
A) selling the same product at different prices with only minor tweaks in their design.
B) leveraging customers to promote their products or services.
C) reselling multiple versions of a single product under different brand names.
D) offering a near-limitless selection of products or services.
E) performing different tasks than rivals or the same tasks in a different way.
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39
Which of the following represents an advantage enjoyed by Netflix over traditional video stores?
A) Lower technology overhead
B) Lower shipping expenses
C) Larger entertainment selection
D) Higher energy costs
E) Higher churn rates
A) Lower technology overhead
B) Lower shipping expenses
C) Larger entertainment selection
D) Higher energy costs
E) Higher churn rates
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40
Offering a nearly limitless selection results in an interesting phenomenon where:
A) customers are willing to pay more for inferior goods.
B) more money is made selling obscure goods than popular ones.
C) firms with physical storefronts are more profitable than pure-plays.
D) it is less profitable to sell physical products than otherwise.
E) maintenance overheads are slashed contrary to conventional wisdom.
A) customers are willing to pay more for inferior goods.
B) more money is made selling obscure goods than popular ones.
C) firms with physical storefronts are more profitable than pure-plays.
D) it is less profitable to sell physical products than otherwise.
E) maintenance overheads are slashed contrary to conventional wisdom.
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41
Netflix competitors in streaming are small and relatively new.
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42
Which of the following statements is true about retailing?
A) Internet retailers stock their shelves with only popular items.
B) More money can be made through the sale of latest products than obscure items.
C) Accessibility rather than selection attracts customers.
D) Nearly limitless selection allows Internet retailers to leverage the long tail.
E) Both traditional and internet retailers face limitations such as shelf space and geography.
A) Internet retailers stock their shelves with only popular items.
B) More money can be made through the sale of latest products than obscure items.
C) Accessibility rather than selection attracts customers.
D) Nearly limitless selection allows Internet retailers to leverage the long tail.
E) Both traditional and internet retailers face limitations such as shelf space and geography.
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43
Explain the long tail phenomenon at Netflix.
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44
By shifting to a streaming model, Netflix stands to eliminate shipping and handling costs.
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45
When firms enjoy economies of scale they:
A) have a greater share of liquid assets than rivals.
B) have bigger production facilities than their competitors.
C) have a wider employee base than their competitors.
D) leverage the cost of an investment across increasing units of production.
E) leverage investment costs to decrease their subscriber acquisition costs.
A) have a greater share of liquid assets than rivals.
B) have bigger production facilities than their competitors.
C) have a wider employee base than their competitors.
D) leverage the cost of an investment across increasing units of production.
E) leverage investment costs to decrease their subscriber acquisition costs.
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46
Walmart decided to pull the plug on their DVD-by-mail effort because they:
A) didn't have an early moving lead in that industry.
B) didn't have sufficient cash to compete with rivals.
C) had insufficient selection.
D) had only a single distribution center.
E) were unable to handle their large customer base.
A) didn't have an early moving lead in that industry.
B) didn't have sufficient cash to compete with rivals.
C) had insufficient selection.
D) had only a single distribution center.
E) were unable to handle their large customer base.
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47
The act of taking a job traditionally performed by a designated agent (usually an employee) and outsourcing it to an undefined generally large group of people in the form of an open call is known as _____.
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48
Crowdsourcing is:
A) a phenomenon whereby firms can make money by offering a near-limitless selection.
B) the act of taking a job traditionally performed by a designated agent and contracting it out to an undefined generally large group of people in the form of an open call.
C) a classification of software that monitors trends among customers and uses this data to personalize an individual customer's experience.
D) the removal of an organization from a firm's distribution channel.
E) an industry practice whereby content is available to a given distribution channel for a specified time period or 'window,' usually under a different revenue model.
A) a phenomenon whereby firms can make money by offering a near-limitless selection.
B) the act of taking a job traditionally performed by a designated agent and contracting it out to an undefined generally large group of people in the form of an open call.
C) a classification of software that monitors trends among customers and uses this data to personalize an individual customer's experience.
D) the removal of an organization from a firm's distribution channel.
E) an industry practice whereby content is available to a given distribution channel for a specified time period or 'window,' usually under a different revenue model.
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49
Netflix enjoys the triple scale advantage of the largest customer base, the largest selection, and the largest network of distribution centers. This can be attributed to:
A) Netflix's specialized focus on advertising and marketing.
B) Netflix's first-mover advantage.
C) Netflix going public to generate funds for expansion.
D) Netflix's effective and aggressive pricing strategy.
E) the bargaining clout it exercises over movie studios and the government.
A) Netflix's specialized focus on advertising and marketing.
B) Netflix's first-mover advantage.
C) Netflix going public to generate funds for expansion.
D) Netflix's effective and aggressive pricing strategy.
E) the bargaining clout it exercises over movie studios and the government.
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50
A low _____ is usually key to a firm's profitability because acquiring a customer is more expensive than keeping one.
A) subscription fee
B) inventory size
C) churn rate
D) switching cost
E) opportunity cost
A) subscription fee
B) inventory size
C) churn rate
D) switching cost
E) opportunity cost
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51
The Netflix work culture is in many ways similar to its peers.
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52
Netflix uses data to create tailored audience promotions.
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53
Churn rate is a term that refers to the:
A) average number of recommended titles in a user's queue.
B) rate at which the demand for a product or service fluctuates with price change.
C) number of movie titles that are difficult to assign reliable user ratings.
D) rate at which customers leave a product or service.
E) number of user ratings accrued per movie.
A) average number of recommended titles in a user's queue.
B) rate at which the demand for a product or service fluctuates with price change.
C) number of movie titles that are difficult to assign reliable user ratings.
D) rate at which customers leave a product or service.
E) number of user ratings accrued per movie.
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54
At Netflix, the marginal cost for digital goods is zero for all licensees.
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55
How does Cinematch offer Netflix additional operational advantages?
A) Cinematch offers alternate recommendations of movies based on critical acclaim and box office performance parameters.
B) Cinematch is linked to warehouses and recommends movies that are likely to be in stock.
C) Cinematch is often used by movie studios to plan movie scripts based on user preferences.
D) Cinematch is a source of additional revenue to Netflix as a marketing tool for recommending newly-released movies.
E) Netflix leases the Cinematch collaborative filtering software to smaller firms at a fee, withholding the valuable user ratings.
A) Cinematch offers alternate recommendations of movies based on critical acclaim and box office performance parameters.
B) Cinematch is linked to warehouses and recommends movies that are likely to be in stock.
C) Cinematch is often used by movie studios to plan movie scripts based on user preferences.
D) Cinematch is a source of additional revenue to Netflix as a marketing tool for recommending newly-released movies.
E) Netflix leases the Cinematch collaborative filtering software to smaller firms at a fee, withholding the valuable user ratings.
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56
The shift from atoms to bits is realigning nearly every media industry.
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57
Fixed costs vary according to production volume.
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58
_____ is a classification of software that monitors trends among customers and uses this data to personalize an individual customer's experience.
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59
How does Netflix use collaborative filtering software to match movie titles with customer tastes? In what ways does this software help Netflix garner sustainable competitive advantage?
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60
In the context of the Netflix case, _____ refers to an extremely large selection of content or products.
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61
Walmart owns the video streaming outfit called _____.
A) Hulu
B) Vudu
C) Voddler
D) Spotify
E) Grooveshark
A) Hulu
B) Vudu
C) Voddler
D) Spotify
E) Grooveshark
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62
Which of the following is true about Netflix?
A) Its marginal cost is zero as it is currently focusing on distributing digital content.
B) It has the support of major studios such as Fox and Warner that have allowed it to send DVDs to customers simultaneously as titles go on sale.
C) Its cost of acquiring streaming content has fallen in the recent past due to its long tail advantages.
D) It has attempted to counter rivals with exclusive content by securing exclusive streaming rights for several popular shows.
E) It is likely to stick with its revenue model of a single monthly subscription fee in the future.
A) Its marginal cost is zero as it is currently focusing on distributing digital content.
B) It has the support of major studios such as Fox and Warner that have allowed it to send DVDs to customers simultaneously as titles go on sale.
C) Its cost of acquiring streaming content has fallen in the recent past due to its long tail advantages.
D) It has attempted to counter rivals with exclusive content by securing exclusive streaming rights for several popular shows.
E) It is likely to stick with its revenue model of a single monthly subscription fee in the future.
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63
Netflix's decision to unbundle the single fee for its $10 base service into two separate $8 plans for DVD-by-mail and streaming over the Internet proved to be beneficial to the firm.
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64
The practice of windowing involves:
A) making content available to a distribution channel for a specified time period under a different revenue model.
B) scheduling movies to be streamed online at primetime periods to pull in more revenue from advertising.
C) relaying advertisements for limited time periods during online movie steaming, as opposed to frequent ad breaks.
D) delaying the sending of DVDs to customers until 28 days after titles go on sale.
E) streaming movies to customers' computers beforehand and then relaying them on television.
A) making content available to a distribution channel for a specified time period under a different revenue model.
B) scheduling movies to be streamed online at primetime periods to pull in more revenue from advertising.
C) relaying advertisements for limited time periods during online movie steaming, as opposed to frequent ad breaks.
D) delaying the sending of DVDs to customers until 28 days after titles go on sale.
E) streaming movies to customers' computers beforehand and then relaying them on television.
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65
An internal team at Netflix developed a prototype set top box to enable the direct streaming of content to customers' television sets. However, the idea of offering it to Netflix customers was dropped because:
A) the market for online streaming was nascent and unprofitable.
B) firms such as Apple and Amazon offered third-party set top boxes to stream Netflix movies.
C) of the commoditization of Blu-ray players, which rendered set top boxes obsolete.
D) of the brutally competitive nature of the consumer electronics business.
E) the firm was apprehensive about investing in the hardware business when it was losing revenue during the economic recession.
A) the market for online streaming was nascent and unprofitable.
B) firms such as Apple and Amazon offered third-party set top boxes to stream Netflix movies.
C) of the commoditization of Blu-ray players, which rendered set top boxes obsolete.
D) of the brutally competitive nature of the consumer electronics business.
E) the firm was apprehensive about investing in the hardware business when it was losing revenue during the economic recession.
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66
The shift from atoms to bits does not stand to impact content creators, middlemen, and retailers.
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67
_____ refers to removing an organization from a firm's distribution channel.
A) Disbarment
B) Repudiation
C) Annulment
D) Disintermediation
E) Revocation
A) Disbarment
B) Repudiation
C) Annulment
D) Disintermediation
E) Revocation
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68
One of the benefits of disintermediation in the video industry is that:
A) studios get to retain all the money generated through new windows.
B) movie rental firms such as Netflix can exercise greater bargaining power while negotiating streaming rights.
C) customers have a wider choice of services to choose from and at reduced subscription costs.
D) video rental firms have opportunities to replace studios in their interface with customers.
E) it creates equal opportunities for small firms to conduct business within studio distribution channels.
A) studios get to retain all the money generated through new windows.
B) movie rental firms such as Netflix can exercise greater bargaining power while negotiating streaming rights.
C) customers have a wider choice of services to choose from and at reduced subscription costs.
D) video rental firms have opportunities to replace studios in their interface with customers.
E) it creates equal opportunities for small firms to conduct business within studio distribution channels.
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69
Costs that do not vary according to production volume are called _____.
A) total costs
B) marginal costs
C) switching costs
D) variable costs
E) fixed costs
A) total costs
B) marginal costs
C) switching costs
D) variable costs
E) fixed costs
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70
Netflix attempted to rebrand its DVD-by-mail service under the name _____.
A) Qwikster
B) Cinematch
C) Starz
D) PurePlay
E) Epix
A) Qwikster
B) Cinematch
C) Starz
D) PurePlay
E) Epix
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71
Netflix can send out any DVD it buys because of a Supreme Court ruling known as the _____.
A) clickwrap agreement
B) Betamax ruling
C) fair use law
D) First Sale Doctrine
E) Copyright Directive
A) clickwrap agreement
B) Betamax ruling
C) fair use law
D) First Sale Doctrine
E) Copyright Directive
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72
Which of the following is true of Netflix DVD-by-mail?
A) Its content acquisition cost is fixed.
B) Its competitors are numerous with different models.
C) It is more appealing for new entrants.
D) It allows unlimited monthly subscription to all content.
E) It provides opportunities for new content and revenue models.
A) Its content acquisition cost is fixed.
B) Its competitors are numerous with different models.
C) It is more appealing for new entrants.
D) It allows unlimited monthly subscription to all content.
E) It provides opportunities for new content and revenue models.
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73
Title availability is complicated by a distribution practice known as _____.
A) audience finding
B) windowing
C) customer filtering
D) disintermediation
E) viral marketing
A) audience finding
B) windowing
C) customer filtering
D) disintermediation
E) viral marketing
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74
The idea that many media products are digital files of ones and zeros sold in physical containers, is known as:
A) information integration.
B) metaphysical assimilation.
C) data congruence.
D) atoms to bits.
E) technology restructuring.
A) information integration.
B) metaphysical assimilation.
C) data congruence.
D) atoms to bits.
E) technology restructuring.
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75
Netflix DVD-by-mail differs from Netflix stream, in that Netflix DVD-by-mail:
A) is expensive to replicate infrastructure regionally.
B) has numerous competitors with different models.
C) is more appealing for new entrants.
D) allows for unlimited monthly subscription to all content.
E) provides opportunities for new content and revenue models.
A) is expensive to replicate infrastructure regionally.
B) has numerous competitors with different models.
C) is more appealing for new entrants.
D) allows for unlimited monthly subscription to all content.
E) provides opportunities for new content and revenue models.
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76
Priceline.com is a company and a commercial website that helps users obtain discount rates for travel-related purchases such as airline tickets and hotel stays. The company facilitates the provision of travel services by its suppliers to its customers. People can directly access a complete array of schedules and fares. This process has, to a great extent, eliminated the travel agency as a middle man. This is an example of:
A) disbarment.
B) repudiation.
C) annulment.
D) disintermediation.
E) revocation.
A) disbarment.
B) repudiation.
C) annulment.
D) disintermediation.
E) revocation.
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77
Marginal costs:
A) are minor, insignificant costs.
B) are associated with each additional unit produced.
C) are the costs incurred as a result of choosing one option over another.
D) are constant and do not vary according to production volume.
E) are also known as overheads.
A) are minor, insignificant costs.
B) are associated with each additional unit produced.
C) are the costs incurred as a result of choosing one option over another.
D) are constant and do not vary according to production volume.
E) are also known as overheads.
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78
What solution has Netflix come up with to address the need to deliver content to customers' televisions?
A) Netflix has entered into a revenue sharing agreement with Apple to produce customized set top boxes.
B) Netflix access is being baked into new-age Blu-ray players that are fast on the track to commoditization.
C) Netflix has invested in a hardware division to build and market its own set top boxes.
D) Netflix has acquired Vudu, a firm that specializes in the online streaming business.
E) Netflix provides a software platform to firms seeking to build Netflix access into their devices.
A) Netflix has entered into a revenue sharing agreement with Apple to produce customized set top boxes.
B) Netflix access is being baked into new-age Blu-ray players that are fast on the track to commoditization.
C) Netflix has invested in a hardware division to build and market its own set top boxes.
D) Netflix has acquired Vudu, a firm that specializes in the online streaming business.
E) Netflix provides a software platform to firms seeking to build Netflix access into their devices.
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79
Netflix's attempt to rebrand its DVD-by-mail service as Qwikster was moderately successful.
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80
Which of the following is true of Netflix streaming?
A) Its content acquisition cost is fixed.
B) Its competitors have been mostly vanquished.
C) It has little appeal for new entrants.
D) It allows for unlimited monthly subscription to all content.
E) It provides very little opportunity for innovation.
A) Its content acquisition cost is fixed.
B) Its competitors have been mostly vanquished.
C) It has little appeal for new entrants.
D) It allows for unlimited monthly subscription to all content.
E) It provides very little opportunity for innovation.
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