Info Tech - Chapter 4 Netflix

"First Sale Doctrine"

A US Supreme Court ruling stating that an individual who knowingly purchases a copy of a copyrighted work from the copyright holder receives the right to sell, display or otherwise dispose of that particular copy, notwithstanding the interests of the copyright owner.

collaborative filtering

A classification of software that monitors trends among customers and uses this data to personalize an individual customer's experience.

bandwidth caps

A limit, imposed by the ISP (e.g., a cable or telephone company) on the total amount of traffic that a given subscriber can consume (usually per each billing period).

By going public, Netflix encountered competition from the large, established firms Wal-Mart and Blockbuster. What aspect of Netflix going public lured these firms into the market?

By going public, Netflix was required to disclose its financial position.

How does the Cinematch recommendation system work?

Cinematch develops a map of user ratings and steers users toward titles preferred by people with similar tastes.

Which of the following is true of Netflix streaming?

Content providers enjoy greater bargaining power as the sole source for unique titles unavailable from any other source.

Collaborative filtering is a technology that allows customers to meet and select titles for viewing parties.

False

Long tail

In this context, it refers to an extremely large selection of content or products. The long tail is a phenomenon whereby firms can make money by offering a near-limitless selection.

Which of the following is true of Netflix?

It began as a DVD subscription model and then simultaneously introduced a video streaming subscription while maintaining the legacy business.

Why is the "First-Sale Doctrine," including understanding when it does and doesn't apply, relevant to Netflix?

It means content acquisition costs for DVDs are more predictable than streaming costs and In cases of streaming media, it facilitates a shift of bargaining power to content suppliers.

Which of the following represents an advantage enjoyed by the Netflix DVD-by-mail business over traditional video stores?

Larger entertainment selection

Windowing

Making content available to a given distribution channel (in theaters, through hospitality channels like hotels and airlines, on DVD, via pay-per-view, via pay cable, and later broadcast on commercial TV) for a specified time window, usually under a different revenue model.

OTT

Over-The-Top, an industry term referring to media services that are provided over the Internet instead of through conventional broadcasting mechanisms like cable or TV broadcast.

While the size of the tail in the long tail phenomenon is disputable, one fact that is critical to remain above this debate is that:

Selection attracts customers, and the Internet allows large-selection inventory efficiencies that offline firms can't match.

colocation facilities

Sometimes called a "colo," or carrier hotel; provides a place where the gear from multiple firms can come together and where the peering of Internet traffic can take place. Equipment connecting in colos could be high-speed lines from ISPs, telecom lines from large private data centers, or even servers hosted in a colo to be closer to high-speed Internet connections.

Churn Rate

The rate at which customers leave a product or service.

The yearly cost to run a Netflix-comparable nationwide delivery infrastructure is about $300 million.

True

binge-watching

Viewing several episodes of a program in a single sitting.

Today the Netflix is so focused on _____________ that it offers its streaming-only subscription as the default option for consumers.

digital distribution