Netflix is the leader in renting DVDs to its customers. When the customer returns one DVD, another is issued. Netflix gained a remarkable success but, on the other, it is facing some of the problems nowadays. Netflix charge a monthly fee from its customers and it has an agreement with the film studios. Due to this agreement, it pays the studios a specific amount from its revenue and this amount is paid on per issue rather than on monthly basis. Since film studios are observing dynamic growth of Netflix, it is likely that they will increase their share rate on per issue and since Netflix charge its customers on monthly basis, it is likely that a decline in its revenue will occur. For this, it should make an agreement of monthly profit sharing with the studios. Due to increase in technology, people do not prefer to rent a DVD; therefore,...
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