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Netflix, Inc. (NFLX) Message Board

  • playmeortrademe2win playmeortrademe2win Jul 22, 2002 3:48 PM Flag

    Ideas for improving NFLX's model 2of 2

    � Ok, what incentives would a customer have to participate in this mail forward process?
    Give them one. Each time a customer participates in the forwarding process, give them a $.25 reward toward the next subscription. This will do two things: keep them royal and the reward money is a new future revenue stream rather than an expense.
    � What if there�s no customer is on the queue for the DVD to forward to?
    Then ask them to use send the envelope back to NetFlix. Remember the new Netflix re-useable/re-sealable envelope �s see-thru feature, the default address was Netflix�s. so the customer do not have to print or write on the envelope. Since they weren�t �lucky� enough, no incentive is rewarded. After awhile, this status tracking can become addictive as it encourage customers to hold the DVD(s) until a forwarding addressee is available so they can earn their incentive rewards. In some cases, 2 DVDs may go to one customer, further reducing shipping costs.
    � What if the participating customer does not have a printer available when he found a new forwarding addressee?
    They can use a any paper or a business card�s back to hand write the new addressee. Thereafter, insert the card into the see-thru address enclosure, covering the Netflix�s default return address. If the card fell off in-transit, it will still ends up at Netflix.
    � Will this improved process require a chance in Netflix�s logical methods?
    Yes, but a minor one. Since the current business model requires the customer to send in their current DVDs, if holding any, before getting the new ones, Netflix would have to add a �proactive� or �no-wait� feature on the customer profile, where the next 3 wish-list DVDs arrive first and return/forward the current DVDs to someone else. At worst, each customer holds 2 sets of maximum allowed number of DVDs. This no doubt will reduce its inventory quite a bit, but with the new reward incentives for forwarding, it will recycle faster than otherwise.
    In the second quarter of 2002, Netflix reported that it acquired a total of 236,000 new trial subscribers, which is 944,000 at an annual rate. Since most NetFlix subscriptions are triggered by the acquisition of DVD player, we can assume NetFlix new subscribers will increase at the same 50% rate as DVD sales are growing. This suggests that if there's no changes are made to NetFlix's business model, then new subscribers will increase to 1,340,000 in by end of 2002, 2,010,000 in 2003 and 3,015,000 in 2004.
    See any holes on thos process or have any other ideas from the readers? As for me, I have more ideas in the bag, so if you�re a Netflix (or a Blockbuster, Movie Gallery, or Hollywood Video) HR person looking for a business process engineer with a MBA and a Oracle OCP-DBA certification with over 8 years of Big 5 consulting experience, drop me a line @ Warren@Lieu.org, may be we can talk further about an assignment to maximize your shareholders� wealth.

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    • sorry but I don't think this idea has even half a chance. The privacy issue is the #1 killer, passing around peeps names and addresses - I don't think so - and the integrity issue is the net - integrity in the sense that I log on and say I am sending my movie on to the next subscriber - so when do I get to the mailbox? Next day, day after, left it in the car and forgot???? This is a no fly.

      • 1 Reply to ClackClack
      • I agree. It�s not going to work for the very reasons you mention. There is no need to be creative.

        All NFLX needs to do is get the rest of the nation up to the same level of service California has. It may take some time, but they are well on their way.

        Those not close to postal hubs (rural subscribers) will just have to deal with the extra day or two each way to NFLX and back.

 
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