Which of the following is true about Netflix?
A) Its marginal cost is zero as it is currently focusing on distributing digital content.
B) It has the support of major studios such as Fox and Warner that have allowed it to send DVDs to customers simultaneously as titles go on sale.
C) Its cost of acquiring streaming content has fallen in the recent past due to its long tail advantages.
D) It has attempted to counter rivals with exclusive content by securing exclusive streaming rights for several popular shows.
E) It is likely to stick with its revenue model of a single monthly subscription fee in the future.

Question

Quizplus · Accepted Answer

Netflix has secured exclusive streaming rights for several popular shows like Stranger Things and Orange is the New Black to counter its rivals with exclusive content. This has been an important strategy to retain its subscribers and attract new ones. Option A is incorrect as while the marginal cost of digital content distribution is low, it is not zero. Option B is no longer relevant as Netflix no longer sends out DVDs to customers. Option C is partially true, but the cost of acquiring streaming content has been fluctuating and is dependent on several factors. Option E is unclear and cannot be determined from the given information.

Which of the Following Is True About Netflix