1. Use the Internet to research what is happening in the video rental business (i.e. Blockbuster, Redbox).

2. What changes have online businesses such as Netflix caused in the video rental business? Discuss all five
categories of economic utility in your answer. (Form, Place, Time, Possession, and Information)
1. Form: Netflix takes online movie and tv show streaming and made it into an interactive streaming
service.
2. Place: Netflix has a website where you can purchase an account.
3. Time: Seasonal discounts on subscriptions.
4. Possession: Takes anything but cash and checks to purchase an account.
5. Information: Also on their website, Netflix has a customer service page where you can speak to a
customer service representative
3. With the improvement of economic utility in the video industry also came an ethical dilemma. Tennessee has
passed a law making it illegal to share Netflix (and Hulu and Spotify) passwords claiming it is stealing.
Explain your opinion on the ethical dilemma of sharing Netflix passwords.

4. Using your answers to the questions above, please write a three to four paragraph summary that compares
and contrasts the video rental business before and after the arrival of Netflix.

Netflix beat both Blockbuster and Redbox in the movie and tv show streaming

industry with its convenience and overall variety and selection it offers. In the 90’s,

Blockbuster was incredibly popular offering movie rentals for $1.99 for older movies and

$2.99 for newer movies. Redbox provided three tiers of payment; $6, $8, and $9 a

month. $6 provided the patron with streaming and rentals with a limited selection of

movies, $8 provided unlimited streaming and four kiosk rentals a month, and $9 gave

you all of the above plus four credits for Blu-ray rentals which at the time would cost

$1.50 a day. Netflix however, provides the customer with commercial free access to tv

shows and movies on any device for a minimum of $9.99 per month.

Now that we know Netflix has the overall competitive advantage against both

Blockbuster and Redbox, how did they achieve this leg up? Netflix realized that physical

renditions of movies such as DVDs were getting outdated, so they decided to create an

easy to navigate, accessible platform that is able to stream an unlimited number of

movies and tv shows. Unlike Blockbuster and Redbox, Netflix was able to be purchased

and installed at home, this grants the patron a very easily purchasable platform in just a

few clicks. The movies on Netflix - that aren’t taken down by licensing issues - are there

to stay year round, unlike Blockbuster which was constantly changing its product
selection with the seasons. Netflix is buyable with any form of virtual payment, this

includes credit or debit cards, gift cards, Apple pay, etc. The only disadvantage this has

is the very few people who just use cash aren’t able to purchase this. For concerns or

questions such as this, Netflix offers a customer support service on their website that

offers live chats, emails, calls, and more to answer any questions or clear up any

concerns from the customer.

With the new age of streaming services, this means that there are always people

trying to mooch off of others' subscriptions to use it for themselves. Netflix made it illegal

to share account passwords with anyone else because then they would see a decline in

sales and monthly payments. This is a fair rule because if Netflix wants to stay in

business, people should be loyal to the set prices and guidelines. If everyone shared

their passwords, Netflix would slowly decline in prices and thus render purchasing your

own account useless. In Tennessee, it is actually a felony that can come with jail time if

you share your account password. Overall this is a fair guideline set by Netflix.