Question

Although Netflix had a larger distribution network than rivals, other firms could build a similarly large warehouse network. Why was the size of the Netflix DVD-by-mail customer base critical to repelling rivals?

a. A larger customer base allowed Netflix to negotiate better deals with movie studios.
b. Netflix's large customer base generated valuable user data for personalization.
c. A bigger customer base reduced the impact of occasional service disruptions.
d. Netflix's larger customer base enabled them to offer more attractive subscription packages.

Answer 1

The size of the Netflix DVD-by-mail customer base was critical to repelling rivals because it allowed Netflix to negotiate better deals with movie studios and generate valuable user data for personalization.

Step-by-step explanation:

The size of the Netflix DVD-by-mail customer base was critical to repelling rivals because it enabled Netflix to offer more attractive subscription packages. With a larger customer base, Netflix had more leverage in negotiating better deals with movie studios, allowing them to secure a wider selection of titles for their customers. Additionally, Netflix's large customer base generated valuable user data for personalization, which helped them tailor their recommendations and improve customer satisfaction.