Distribution Strategy-Riding the Future by Abandoning the Past

A good way of studying distribution strategy is to look at the way the rules of film reaching the end consumer has changed. The movie halls were first beaten by CDs and DVDs which saved both commuting time and cost per ticket for each family member. In the early 2000s Netflix's revolutionary DVD by mail service put all the most powerful movie-rental stores out of business. If we remember blockbuster was the giant who controlled the DVD brick and mortar movie rental and was ultimately displaced by the dvd by mail service.

Netflix offered more than 100,000 titles, there was no commuting and late fees involved .By 2010 as Netflix surged the once mighty Blockbuster fell into bankruptcy. Also around the same time Coinstar's Redbox started a $1/day DVD rental kiosk and Hulu also started an ad supported high quality free access to movies and TV shows .

To come back to Netflix it had 25 million subscribers ,built up a massive physical DVD library and a streaming library of 20,000 high definition movie movies accessible to 200 different internet ready services.

As a sequel in 2010 video giants such as Google;s YouTube and Apple's I-Tunes began renting movie downloads and Hulu introduced subscription based Hulu Plus.

Despite various course corrections especially the Qwikster avataar wherein it converted the DVD customers into Netflix, the company continues to be conscious and makes offbeat moves like paying USD 100 million for exclusive rights to air the House of Cards. The challenge from Google and Amazon remains. Even in India Amazon Prime has booked Padmawaat and is gradually building a loyal base . Netflix tries hard to ride the future by abandoning the past.

Adapted from Phil Kotler

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