30 July 2011
Netflix, LVLT, How the recent price change will affect their relationship?
Recently Netflix announced a step price increase and effectively separated their online streaming and traditional DVD by mail business models. Initially this caused an revolt by even its most loyal subscribers. People in general hate change but usually calm down after the hype has disappeared and calmer heads prevail. The efficiency that customers have experienced from not having to wait for their DVD's to appear in the mail has gained more customers than they will lose after separating the two. I believe the price increase will have a revenue increasing situation for the company. Netflix answers the revolt by announcing new deals that will increase their large inventory. This will give its online subscribers more choices for less than the cable company charges for a premium channel. Netflix is still able to serve the DVD crowd that was the core of its business model and pay the higher cost associated with it. The greatest benefit for the company is that it separates the higher return online subscribers and the lower profit subscribers to the DVD service. It also gives its subscribers an incentive to become online streamers. This should increase rather than decrease the online subscribers. Therefore the demand it generates for LVLT's Services will only increase.
Customization of the Burger
As customers become more educated of menu ingredients they are going to begin demanding new and exotic plants, fruits and vegetables. As people also become aware of the processing much of the pre-prepared meals undergo to increase their shelf life. Farm fresh vegetables, organic choices and gluten free diets are becoming lifestyle choices rather than trend diets. Freedom of choice or customization is also becoming a growing trend. Just look at the growth of small sandwich shops(Subway, Quizno's) that feature unlimited combinations of flavors, fresh vegetables, fresh bread and protein options. Buffalo Wild Wings has traditional fast food items paired with unlimited sauces, choices in sports and teams, and a wide selection of beer, liquor and even wine. Neighborhood cafes, restaurants and coffee shops are once again social gathering places. Social media can let hundreds of people know their personal recommendations. People now gather at coffee shops to write their blogs, post their whereabouts on Facebook while they shop for clothes. The internet has even changed when people eat because the 9-5 factory jobs are gone and office workers find that they have as much to do form their internet connected office at home as they did at work. Many of todays students take their college classes online at their leisure.
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