Question

Describe ONE crisis that the Netflix has faced. Why did it happen? (can be from any time period)

Answer 1

In fact, when its original DVD rental company becomes redundant, Netflix is facing an existential strategy crisis much like the one it faced in 2007–10. To be certain, in the delivery of content, Netflix is the master of the next big thing. Just like broadcasting beat radio in the 1940s and' 50s and cable defeated broadcasting in the 1970s and' 80s, streaming now seems poised to overtake both. Over the past five years, cable service providers have lost several million subscribers. Average U.S. TV viewing time in 2015 dropped by 3 million, half of which was directly attributable to the binge-watching habits of Netflix and viewers.

However, the streaming business has relatively few economies of scale. Yes, Netflix has created its own network for content delivery, with servers in over 1,000 locations. But such investment is peanuts compared to building a network of local TV stations or setting up cable miles and miles. And yes, as the Netflix subscriber base grows, it is becoming increasingly sophisticated the "personalization" algorithms that power its recommendations engine.

But there is little indication that customers will ever be willing to pay such a feature for a premium. There is also little reason to believe that a time of intense consolidation would accompany the influx of new streaming entrants, including some very deep-pocketed ones, such as Hulu and Amazon, as was the case with broadcasting and cable. Nonetheless, if governments around the world become too dissatisfied with a single Internet service hanging the bandwidth of their country, dominant scale could become a negative