Showtime for Netflix (Business 2.0 magazine, March 2005 issue) Netflix is the pioneering Web-based DVD-rental firm. For a flat monthly fee, subscribers can order as many movies as they want, up to four at a time, and keep them as long as they want. Netflix doesn't have due dates, late fees, or titles out of stock; and movies usually arrive by mail in a day. As well, the Netflix service is more superior to in-store rentals. In 2004, …
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…demand curve to be kinked and the marginal-revenue curve will have a vertical break, or gap. Moreover, economies of scale cause the entry barrier in the Web-based DVD-rental market. The Big Four companies have sufficient scale and sales; therefore, any new firm that will enter the market will have a small market share, and will not be able to survive competing will Netflix, Blockbuster, Wal-Mart, and Amazon.com. _________________________________________________________ Analyzing Article from: Business 2.0 magazine, March 2005 issue