Netflix

In order for Netflix to improve its bargaining position between buyers and suppliers, it is vital

they capitalise on their existing strengths. Netflix began creating original content with TV

shows such as House of cards, Marco Polo (Rosenbaum, 2013) and Orange Is the New Black

which ended to be most-watched original series in 2013. Due to the success of these TV

shows, Netflix has increased investment on its original content with now approximately 20%

of Netflix’s content spend is on original content (Thompson). By investing around $6bn

on new TV and film content in next three years (Murray-Morris), it will enable Netflix to

have less reliance on current studio and content providers. In addition by applying backwards

integration, it will allow Netflix to become its on content providers which will decrease the

bargaining power of suppliers. (Pepitone J, 2013). By creating new and successful TV shows

it is also likely that the investment will reduce bargaining power of buyers. As Netflix

continues to create additional original content, it will mean the products will be more

differentiated between other competitors and switching costs will also increase as consumers

cannot view Netflix’s shows on other streaming services such as Hulu and Amazon.

Evaluation

In terms of suitability, the increased investment is x

Bibliography

Thomson, Stuart. 'Netflix Content Spend Outstrips BBC, HBO, Discovery - TBI Vision'. TBI Vision. N.p., 2015. Web. 15 Mar. 2015.

MURRAY-MORRIS, SOPHIE. 'Netflix To Spend $6Bn On TV And Film Content In Next Three Years'. The Independent. N.p., 2014. Web. 16 Mar. 2015.

http://www.forbes.com/sites/stevenrosenbaum/2013/02/05/netflix-risky-stratedy-for-house-of-cards/.

Pepitone, J. (2013). Amazon Prime scores Viacom shows after Netflix deal expires. Available:http://money.cnn.com/2013/06/04/technology/amazon-viacom/. Last accessed 3rd Feb 2015.