Provide an economic analysis of Netflix Essay Example | Topics and Well Written Essays - 500 words

Provide an economic analysis of Netflix - Essay ExampleNetflix drives its tax income enhancements from two sources monthly subscriptions from users who can instantly stream TV shows and movies over the internet and delivery of DVDs and Blu-ray discs to customers homes.The major cost components or Netflix include fixed-fee licenses, revenue sh ard and direct purchases made from studios and other content providers. The company also has to spend money in maintaining its streaming services through Amazon Web Services and Content Delivery Networks.There ar many factors that impact the supply and carry of the companys business. One of the primary factors determining demand is the economic situation. The demand also depends on the quality of content produced.As can be seen from the describe of competitors, all the competitors have a different unique characteristic in the agency they are providing pastime video to the customers. While c competent providers and direct-to-home service providers offer a fixed list of entertainment videos on a monthly fees, internet based content providers provide customers which is more similar to Netflix. The other competitors are retailers which provide entertainment videos to customers through brick and mortar shops. This can be said to be a noncompetitive competition. Monopolistic competition can be defined as the market structure where there are many sellers of the same commodity but there is a slight difference in the way the service is provided (Jain & Ohri, 249).Although there are many companies that provide similar service to customers, however, none of the companies providing online companies have been able to come close to Netflix in areas of market share or revenue. Thus, the company is having significant market index finger and drives the market.The company has been very successful in increasing its subscriber base over the period of time. It had a total subscriber base of 20 million at the end of 2010. The company s revenue was $2.16