Don’t cut that cord just yet!


These days it feels like every tech company is trying to get inside your living room. In years past it has been the cable companies who have had a major hold but as streaming services like Netflix and Hulu Plus are becoming much more accessible and a TV war is looming. One company trying to merge the cable and streaming industry is Fanhattan.

Leading up to now having both services is often a very conflicting proposition. Not only do you have to pay for two separate services, but it is such hassle to switch between them. If you are watching a sports game with cable but you want to switch to Netflix to watch a movie, you have to change the inputs on your TV and (if applicable) your surround sound. And if you would ask my parents to do that, they’d rather do open heart surgery than learn how TV inputs work.

Over the past few years Fan TV has designed and built a product that should remedy these issues. They have made their own set top box that connects straight to the internet and will allow you to run both cable and streaming services off one box. Not only will this make switching between the two much easier but it will also give you the ability to only have one box next to your TV. Another one of the company’s goals is to make finding programing easier. If you think about how cable companies have their channels set up now, it is just organized by a giant list of channels that you have to scroll through to get to the channel you want to watch. With Fan TV you can set it up like that, or more how Netflix and Hulu do it, which is sorting based on programming. Also if you were watching normal TV and wanted to switch to Netflix, the transition would be seamless.

The biggest hurdle that faces Fan TV is if they can get the cable companies to provide an internet stream of their content. They have not announced who their partners might be but I think it is in the best interest of the cable companies to adopt something new and fresh since they have had roughly the same type of box for the past 10 years, while their streaming competitors have been innovating much more.

Obviously one of the biggest indicators of quality is customer specifications and one of the qualities that customers look for these days is innovation. Clearly over the past 10 years the TV landscape has changed dramatically and it has been the new streaming services that have been the biggest innovators. Hopefully Fan TV can work with the cable companies to solve this issue and become more appealing to their demanding customers.

Do you think that cable companies are lacking compared to newer streaming services?

Do you think something like Fan TV could help keep cable companies current? Sources:

NEXTflix Problem

Netflix is taking a bold move after spending over two years recovering their losses from their last big controversial pricing and programming change. The Netflix CEO Reed Hastings is doing everything possible to avoid another Qwikster disaster.

Since their lose of nearly 800,000 users and 75% of it’s value, Netflix has worked it’s way back to the top with over 29.1 million members, surpassing enterprises like HBO. [1] However, Netflix could not have done this without turning back the focus to their users wants and needs.

Netflix has done a great deal to reinvent their service, pricing and licensing deals. Recently, Netflix has utilized Facebook to create a Netflix Social , where users can link their facebook and Netflix account and view tabs of “what your friends are watching” or “friends favorite”. [2] Netflix also just made a deal with Dreamworks to begin producing another Children’s original animation series. [3]  Furthermore, Netflix’s production and release of 15 new episodes of the popular show Arrested Development  has also received a lot of praise by Netflix users..[4]

Despite their growth and efforts to reconstruct their service, Netflix has run into a new growing problem.

Their current problem is that over 10 million users are not paying for the streaming service Netflix’s CEO is trying to be very cautious about handling the shared user and password issue. Hastings does not want to lose or ban viewers, but instead he wants to keep people positive and excited about Netflix’s service.[5]

Analysts insist that Netflix’s profit would exponentially increase if Hasting’s cracked down on the issue. One analyst believes they could be making up to 5% more per subscriber if they fix their current pricing or offer different plans for users.[6]

Instead, Netflix’s CEO is celebrating the idea “that people love the service”. [7]

The new plan that will be unveiled will allow four streams for $11.99, while the current pricing of $7.99 for two streams per account will still be available. They expect less than 1% of customers to opt for the new plan, but they hope as their service becomes in bigger demand that users will begin to see the value.[8]

Other plans consist of adding a $3 increase for added users , adding extra fees for children programming or limiting the number of devices that can be attached to the account. [9]

Netflix users are vulnerable  since the last price and policy change, so Hastings needs to remain very sensitive to the issue in order to sustain their level of expansion and growth in the market. Therefore, Hastings is not interested in making any drastic changes, but slowly implementing different plans with added benefits.


Whether you are a current Netflix user or considering a subscription to Netflix, what plan or price increasewould drive you away? What added benefits or licensing deals would make you keep your subscription?


Nine Retailers with the WORST Customer Service


In today’s changing world the product is no longer the most important thing in the shopping process, people are beginning to care more about customer satisfaction, especially in the retail industry. Although its true that customer satisfaction is improving, not all retailers are keeping up with today’s expectations, according to the American Customer Satisfaction Index (ACSI).

Brick and mortar are still the highest rated retailers; however e-commerce is beginning to excel as well. On the negative side, traditional retailers are the ones that are receiving the most negative assessments.

Although many traditional retailers remain with good or average scores, especially the ones that compete with online shops.

In the latest ACSI study, the average for retail companies was 76.6 of a 100-point scale in 2012. With the exception of Internet retail, which is considered as e-commerce for ACSI. This Industry got an 82 score, and from the nine worst rated retailers from ACSI scores, there was just one online retailer.

But even an “average” score, can be considered bad for business, because customer expectations are very important for a company’s score. However customers are lowering their expectations. They’re not actually looking for better shopping experience in the traditional retailers, and for internet retail is the other way around, customers are expecting more of them.

The businesses that failed to impress customers last year have been having a difficult time for many years. As we learned in class, many companies go under because they failed to understand what the customer really wanted. For example, Safeway has been struggling with customer satisfaction for the past 10 years.

For other companies underperforming is a relatively new obstacle, like the case of Netflix, that outperformed average for four years and in 2009 was rated the top retailers, but in the past two years the Internet video retailer has been considered the worst Internet rated company.

Although traditional retailers are struggling to keep customers satisfied, they still have the majority of the sales, but its probable that if Internet retailers continue outperforming in customer satisfaction (compared to traditional retailers) they will gain brick and mortar market share eventually.


Nine retailers with worst customer service:

9. Walgreens– Health/ Personal care

• Customer satisfaction score: 76

• 12-month revenue: $70.79 billion

• One-yr. share price change: 22.42%

8. TJX Companies — retail

• Customer satisfaction score: 76

• 12-month revenue: $25.88 billion

• One-yr. share price change: 20.18%

7. Gap — Retail

• Customer satisfaction score: 76

• 12-month revenue: $15.65 billion

• One-yr. share price change: 45.84%

6. Supervalu — supermarkets

• Customer satisfaction score: 76

• 12-month revenue: $34.77 billion

• One-yr. share price change: -35.60%

5. Sears — department Store

• Customer satisfaction score: 75

• 12-month revenue: $39.85 billion

• One-yr. share price change: -34.60%

4. CVS– health/personal care

• Customer satisfaction score: 75

• 12-month revenue: $123.13 billion

• One-yr. share price change: 15.95%

3. Safeway –– supermarkets

• Customer satisfaction score: 75

• 12-month revenue: $44.21 billion

• One-yr. share price change: 13.60%

2. Netflix – e-commerce

• Customer satisfaction score: 75

• 12-month revenue: $3.61 billion

• One-yr. share price change: 70.80%

1. Wal-Mart — department store

• Customer satisfaction score: 71

• 12-month revenue: $469.16 billion

• One-yr. share price change: 22.65%


Sources Cited:

Is Redbox Instant the new Netflix?

As you all may know, Redbox kiosks have been a great sensation to today’s generation. It started as a box kiosk filled with movie options to rent for only $1/night. People loved the idea of not having to have a traditional movie store card/membership in order to rent out movies. The locations of most of the kiosks are very easy to find and most of the time are located in places where you might stop for other errands as well. According to the Gadget Review, by the end of June 2011, Redbox had 33,000 kiosks in about 27,800 locations. It was everywhere!

Today, the Redbox sensation is about to get a little better. Just when we thought Netflix offered one of the best services in streaming movies, Redbox will now go INSTANT! With the help of Verizon wireless, Redbox will be streaming movies online, just like Netflix. According to John Matarese, from the prices will be a tad bit cheaper than Netflix as well. However, the number of options Netflix has to offer with movies and TV Shows does not compare to the lower number listed under Redbox, since there are no TV shows being offered.

Many may think that this is a huge competition for Netflix, as Redbox does tend to have more up to date movies choices. However, it has yet to be released that ALL movies offered at Redbox will be streamed online. This will cause Redbox a lower advantage over selling more than Netflix. Netflix’s variety of options may be higher, but when we look back at how Redbox took over the movie/game rental industry as compared to Blockbuster, the lower variety of options did not stop it from taking over. Blockbuster definitely offered a greater amount of movies but it was Redbox’s way to present their product and easier access/availability that made them succeed.

Just like Blockbuster and RedBox, the comparative advantage for these two companies, RedBox and Netflix, will be very high, as the launching of Redbox Instant gets closer. According to Russell Holly from the winner to this will only be the company that is really offering what people want to see. It is being able to offer the TV shows, movies, games, and all that at the right time. Most people subscribe to these services for their content and availability. Today’s generation does not seat in front of the TV waiting to watch a show, not because they don’t enjoy it but because there is no time. The fact that streaming videos of that one episode you missed can be found online makes this “issue” very easy to solve.

Netflix has already been competing with other online streamers, such as Hulu, but their fan base is still huge and what has kept it alive. Do you really think Redbox Instant can change the game?

Netflix “Forecasting Error” Aftermath


Netflix has been on a bumpy road due to managerial decisions that led some customers very unhappy. Around a year ago, Netflix decided to split up into two companies that separated it’s DVD rentals and instant online viewing of movies and television shows. The rebranding, along with pricing changes and some pretty bad PR, had many customers drop their Netflix subscription. There was definitely a need for change, so the company would not go under and could return to profits. This is where the importance of forecasting comes into play.


Netflix made some changes and recently released their third quarter earnings to the public. After the second quarter, Netflix returned to profitability and again in the third quarter. There was one issue that CEO Reed Hastings addressed in his third quarter investor call. He stated that the growth was “within the range of guidance from a year ago, although not from Q1.” He made it clear that it was a forecasting error instead of a stunt in overall growth. Netflix had to lower its own forecast by two million subscribers, even though it grew by five million subscribers this year.


I feel that two million is a big number to miss by an incorrect forecast. Why do you think that they missed this by this big of a number? Do you think Hastings is just trying to make light of the situation by saying that the forecast error has not really affected them? Is he doing this to just reassure his company is moving forward and continuing to grow? Will the forecast error affect the company in the future?


Hastings is optimistic about the future of Netflix due to strong growth abroad with recent expansions to Europe and South America. Also, Netflix is trying to compete with Amazon, Hulu, and HBO by the high value of exclusive content deals that Netflix has already and is still acquiring. Hastings has made it clear that “the outlook (for the company) has not changed” even after the disaster of splitting up the company.