Question 1

Describe Netflix's streaming video business model.

Accepted Answer

Today the firm is focused on d...

Question 2

Crowdsourcing is:

Accepted Answer

A)   a phenomenon whereby firms can make money by offering a near-limitless selection.
B)   the act of taking a job traditionally performed by a designated agent and contracting it out to an undefined generally large group of people in the form of an open call.
C)   a classification of software that monitors trends among customers and uses this data to personalize an individual customer's experience.
D)   the removal of an organization from a firm's distribution channel.
E)   an industry practice whereby content is available to a given distribution channel for a specified time period or 'window,' usually under a different revenue model.

Question 3

Netflix is now crunching and comparing user preferences across 75 nations, worldwide - a level of profile detail and user preferences that no one can come close to matching.

Accepted Answer

A) True 
 B)False

Question 4

Netflix's initial revenue model was based on a flat-rate monthly subscription fee rather than a per-disc rental fee.

Accepted Answer

A) True 
 B)False

Question 5

Brands are built through _____.

Accepted Answer

A)   customer awareness
B)   data assets
C)   excessive advertising
D)   customer profiling
E)   customer experience

Question 6

The Netflix customer experience was always weaker than the in-store experience of DVD rental firms, which had human staff. However, consumers were willing to overlook their dissatisfaction given Netflix's other benefits.

Accepted Answer

A) True 
 B)False

Question 7

Churn rate is a term that refers to the:

Accepted Answer

A)   average number of recommended titles in a user's queue.
B)   rate at which the demand for a product or service fluctuates with price change.
C)   number of movie titles that are difficult to assign reliable user ratings.
D)   rate at which customers leave a product or service.
E)   number of new users that each existing user attracts through word-of-mouth and social sharing.

Question 8

One of the benefits of Netflix moving internationally is that any title licensed from the United States also comes with the right to stream the title worldwide, regardless of customer geography.

Accepted Answer

A) True 
 B)False

Question 9

Fixed costs vary according to production volume.

Accepted Answer

A) True 
 B)False

Question 10

Walmart and Blockbuster were well-known firms. Why weren't they able to leverage their brands to compete against Netflix?

Accepted Answer

Blockbuster and Walmart, discovered that...

Question 11

A manager's decision making is often shaped by its perception of the competition. Which of the following does Netflix see as being in competition with the firm?

Accepted Answer

A)   Video games
B)   Magazines
C)   DVD watching
D)   Amazon Prime
E)   All of the above

Question 12

Explain the long tail phenomenon at Netflix.

Accepted Answer

The long tail is a phenomenon whereby fi...

Question 13

Why is bargaining power shifting to content providers as the video content industry shifts from atoms to bits?

Accepted Answer

Video content is perfectly differentiate...

Question 14

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:

Accepted Answer

A)   traditional brick and mortar retailers offer selections that cannot be rivaled by Internet pure-plays.
B)   energy costs and worker wages drive up the costs of running stores like Netflix.
C)   selection attracts customers, and the Internet allows large-selection inventory efficiencies that offline firms can't match.
D)   the turnover rate of obscure titles in traditional video rental stores is only slightly higher than those for Internet pure-plays.
E)   the cost of store maintenance and real estate makes stores such as Netflix unattractive.

Question 15

Marginal costs:

Accepted Answer

A)   are minor, insignificant costs.
B)   are associated with each additional unit produced.
C)   are the costs incurred as a result of choosing one option over another.
D)   are constant and do not vary according to production volume.
E)   are also known as overhead.

Question 16

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

Accepted Answer

A)   Lower technology overhead
B)   Lower shipping expenses
C)   Larger entertainment selection
D)   Higher energy costs
E)   Higher churn rates

Question 17

In context to Netflix, what are the scale advantages associated with streaming?

Accepted Answer

Despite rising costs, a difficult-to-con...

Question 18

For traditional retailers selling physical goods, _____ is the biggest constraint limiting a firm's ability to offer customers what they want and when they want it.

Accepted Answer

A)   shelf space
B)   video piracy
C)   shipping costs
D)   distribution rights
E)   disintermediation

Question 19

When firms enjoy economies of scale they:

Accepted Answer

A)   have a greater share of liquid assets than rivals.
B)   have bigger production facilities than their competitors.
C)   have a wider employee base than their competitors.
D)   leverage the cost of an investment across increasing units of production.
E)   leverage investment costs to decrease their subscriber acquisition costs.

Question 20

How does the Cinematch recommendation system work?

Accepted Answer

A)   Cinematch develops a map of user ratings and steers users toward titles preferred by people with similar tastes.
B)   Cinematch gathers user ratings to calculate a gross average user rating which is continually updated with each subsequent user rating.
C)   Cinematch requests users to create profiles detailing their interests and preferences and serves recommendations accordingly.
D)   Cinematch uses a team of professional movie critics to create a comprehensive ranking system for each movie in its inventory.
E)   Cinematch ranks movies in two separate lists based on their critical and box office ratings, and subsequently alters user preferences.

Exam 4: Netflix in Two Acts: the Making of an E-Commerce Giant and the Uncertain Future of Atoms to Bits

Crowdsourcing is:

Correct AnswerverifiedShow Answer

Explain the long tail phenomenon at Netflix.

Correct AnswerverifiedThe long tail is a phenomenon whereby fi...View AnswerShow Answer

Fixed costs vary according to production volume.

Correct AnswerverifiedShow Answer

A manager's decision making is often shaped by its perception of the competition. Which of the following does Netflix see as being in competition with the firm?

Correct AnswerverifiedShow Answer

Marginal costs:

Correct AnswerverifiedShow Answer

When firms enjoy economies of scale they:

Correct AnswerverifiedShow Answer

Walmart and Blockbuster were well-known firms. Why weren't they able to leverage their brands to compete against Netflix?

Correct AnswerverifiedBlockbuster and Walmart, discovered that...View AnswerShow Answer

Netflix's initial revenue model was based on a flat-rate monthly subscription fee rather than a per-disc rental fee.

Correct AnswerverifiedShow Answer

Why is bargaining power shifting to content providers as the video content industry shifts from atoms to bits?

Correct AnswerverifiedVideo content is perfectly differentiate...View AnswerShow Answer

Describe Netflix's streaming video business model.

Correct AnswerverifiedToday the firm is focused on d...View AnswerShow Answer

How does the Cinematch recommendation system work?

Correct AnswerverifiedShow Answer

For traditional retailers selling physical goods, _____ is the biggest constraint limiting a firm's ability to offer customers what they want and when they want it.

Correct AnswerverifiedShow Answer

In context to Netflix, what are the scale advantages associated with streaming?

Correct AnswerverifiedDespite rising costs, a difficult-to-con...View AnswerShow Answer

Brands are built through _____.

Correct AnswerverifiedShow Answer

One of the benefits of Netflix moving internationally is that any title licensed from the United States also comes with the right to stream the title worldwide, regardless of customer geography.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Churn rate is a term that refers to the:

Correct AnswerverifiedShow Answer

Netflix is now crunching and comparing user preferences across 75 nations, worldwide - a level of profile detail and user preferences that no one can come close to matching.

Correct AnswerverifiedShow Answer

The Netflix customer experience was always weaker than the in-store experience of DVD rental firms, which had human staff. However, consumers were willing to overlook their dissatisfaction given Netflix's other benefits.

Correct AnswerverifiedShow Answer

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:

Correct AnswerverifiedShow Answer

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The long tail is a phenomenon whereby fi...
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Correct Answer
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Blockbuster and Walmart, discovered that...
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Correct Answer
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Video content is perfectly differentiate...
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Correct Answer
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Today the firm is focused on d...
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Despite rising costs, a difficult-to-con...
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