CH 4 When firms enjoy economies of scale they: e. leverage the cost of an investment across increasing units of production. Some 75 to 80 percent of what people watch on the service comes from Netflix _________. d. recommendations Crowdsourcing is: d. 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. 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? e. By going public, Netflix was required to disclose its financial position. In exchange for a percentage of the DVD-by-mail subscription revenue for every disk sent out by Netflix, movie studios offer Netflix: e. DVD titles at a discounted or wholesale price. Even if Netflix gave Cinematch away to its rivals, they would still not be able to make the same kind of accurate recommendations as Netflix. This is because of Netflix's _____. e. data advantage How does the Cinematch recommendation system work? b. Cinematch develops a map of user ratings and steers users toward titles preferred by people with similar tastes. Netflix can send out any DVD it buys because of a Supreme Court ruling known as the _____. a. First Sale Doctrine Brands are built through _____. b. customer experience 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? a. Video games b. Magazines c. DVD watching d. Amazon Prime e. All of the above 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. e. shelf space User ratings act as _____ for Netflix's customers. c. switching costs Choose the correct answer: Why is the "First-Sale Doctrine," including understanding when it does and doesn't apply, relevant to Netflix? a. It means content acquisition costs for DVDs are more predictable than streaming costs. b. It means that content acquisition costs for streaming are more predictable than DVDs. c. In cases of streaming media, it facilitates a shift of bargaining power to content suppliers. d. In cases of streaming media, it facilitates a shift of bargaining power to firms paying to license content from suppliers. e. None of the above. f. a & d g. b & c h. a & c i. b & d The practice of windowing involves: e. making content available to a distribution channel for a specified time period under a different revenue model. Netflix has used the long tail in the DVD-by-mail business to its advantage, crafting a business model that creates close ties with film studios. What do film studios stand to gain from taking advantage of the Netflix model targeted at increasing the firm's long-tail offerings? e. A cut of the subscription revenue from every disk sent out by Netflix Collaborative filtering is a classification of software that: c. monitors trends among customers to personalize an individual customer's experience. What solution has Netflix come up with to address the need to deliver content to customers' televisions? d. Netflix provides tools to firms seeking to build Netflix access into their devices. Internet retailers serve a larger geographic area with comparably smaller infrastructure and staff. This fact suggests that Internet businesses are more _____. e. scalable The long tail is a phenomenon whereby firms can make money by: b. offering a selection of products or services vastly greater than conventional retailers. Marginal costs: d. are associated with each additional unit produced.