• Create a business model for a start up in an established market and present the business concept, highlight critical success factors and layout the competitive framework of the industry • In the video rental market, my team was asking investors to put money into HappyKids, an online kids focused content streaming and downloading website.

1. HappyKids!
Keeping
both
Kids
AND
Parents
Happy
On-­‐the-­‐Go
Investor
Presenta,on
Lauren
Campion
Kyle
Hilbrenner
Courtney
Kiel
Sara
Maaske
Ike
Nwankwo
Paul
Rudolph

2. Have
you
ever…..
• …watched
siblings
fight
over
their
favorite
outside
toy?
• …seen
a
bored
child
at
a
siblings
pracFce?
• …seen
a
child
who
was
just
disheartened
overall?
We
have
and
that’s
why
we
created
HappyKids!

3. Agenda
• IntroducFon
• Trends
&
CompeFFon
• Industry
Overview
• CompeFFve
Landscape
• Weaknesses
&
Blocking
Strategy
• Closing
Remarks

4. Introduction!
Necessary
framework
to
understand
the
key
reasons
HappyKids!
will
be
successful

5. We
Are
HappyKids!
We’re
Here
to
Keep
BOTH
Kids
and
Parents
Happy
On-­‐
the-­‐Go
• Solves
problems
with
keeping
kids
happy
AND
occupied
– Families
on
the
go:
Soccer
games,
grocery
shopping,
travel
• Helping
parents
maintain
sanity
– Happy
kids
=
happy
parents
– Re-­‐live
your
favorite
childhood
memories
&
pass
them
on
to
your
kids

6. HappyKids!
has
MulFple
Key
DisFncFons
• Both
Stream
and
Download
children’s
movies,
shows,
games
– Targeted
at
Children
ages
0-­‐8
– Wide
variety
with
a
complete
soluFon
of
TV,
movies,
games
both
educaFonal
and
entertaining
– App
for
downloading
directly
to
tablet
/
mobile
• Lower
cost
than
our
compeFFon,
because
of
kid
focus
• Offer
an
online
community
for
both
parents
and
kids
– Plus
online
games
for
kids

7. Several
Key
Ways
to
MoneFze
this
Service
• SubscripFon
Model
– 3
key
pricing
Fers
– Downloads
expire
72
hours
or
30
days
• Partnership
with
Disney
&
Warner
Bros
– Exclusive
Sponsoring
Rights
– PromoFon
of
trailers
• UFlizing
Older
Content
• Click
through
rights
for
partners
– Kids
can
click
through
to
view
partners’
content
on
their
pages
– Kids
can
play
unlimited
games
via
partners’
pages

8. Trends & Competition!
Analysis
of
the
current
state
of
the
market
and
how
HappyKids!
can
effecFvely
enter

9. Market
Status
Leaves
Room
for
Growth
• 19.8%
of
families
in
the
US
have
children
under
the
age
of
6
• Parents
connect
emoFonally
when
purchasing
for
their
children
• Parents
in
constant
need
to
cut
costs
• Our
Goal:
1. ExploiFng
exisFng
problems
in
the
industry
2. Focus
on
one
segment
3. Force
our
compeFFon
to
move
NE

10. Key
Success
Factors
Lead
to
Sustainability
• CriFcal
Success
Factors:
– Strategy
– Partnerships
– ExecuFon
• Sustainability
– SubscripFon
model
(constant
flow
of
revenue)
– RecommendaFons
– Sharing
between
community

11. MulFple
Ways
to
DifferenFate
and
Increase
Revenue
• PosiFoned
Against
CompeFFon
– Specialist
Company
– Pick
up
“over-­‐served”
customers
– Force
compeFtors
NE
• Future
revenue
sources
(Growth
Strategies)
– Expansion
outside
of
the
U.S.
– Expansion
to
ages
outside
of
0-­‐8
(tween,
teen)
– Possibility
of
creaFng
original
content
– Growing
categories
of
content

12. HappyKids!
Business
Model
Customization of
content
Entertainment
for the child
*without the need
for parental controls
Access to
downloads
for 72 hours /
30 days
Low cost
Multiple
pricing options
Avoid new
releases
(Only get movies that
are over 13 weeks old)
Quick Download
Speeds
(Downloads complete
in under 5 min)
Categorized
videos by
age, age
appropriate
content
Play /
access free
online
games
Learning,
Interactive,
Entertaining
content
Recommend
ations based
on past
purchase
Email sent
with
streaming
capacity of
movies
Access to
multiple
languages
Interactive
website,
easy for
children to
use
Application
for mobile
devices ,
tables, etc.
Online
games
sourced
from
partners
Children’s
online
rating
system
Parent’s
online
message
board /
Forum
Online forum
for parents to
chat
Multiple subscription
tiers
(3 separate pricing
options)
Wide selection
of options
(2000 movies, 1000
shows, 500 games)
Download
content easily
& quickly
Ability to
download
Ability to
stream
content
Amazon
Cloud
based
servers
Partnership
with Warner
Bro’s and
Disney
Content for kids
that parents enjoy
Access to Wide
Selection of
children's
content
Have a
Complete
Solution

13. Industry Overview!
Highlights
the
current
status
of
movie
rental
industry
and
HappyKids!
key
disFncFons

14. Overall
Movie
Rental
Industry
is
in
MulFple
Phases
• Moving
to
online
format,
moving
away
from
linear
TV
&
DVDs
• Able
to
use
portable
devices
to
watch
or
stream
movies
and
shows
– Over
61%
of
Gen
X
and
younger
own
a
smartphone
– Over
40MM
Americans
own
a
tablet
• Increase
in
mobile
usage
leaves
opportunity
for
growth

15. Majority
of
Key
Distributors
are
Integrated
• Although,
Nemlix
is
a
Product
Leader,
Blockbuster
is
the
most
integrated
– Blockbuster
has
the
highest
cost
and
is
the
least
flexible
• Redbox’s
overall
low
price
and
ability
to
modify
the
movies
in
each
box
based
on
demand
• HappyKids!
will
focus
on
being
Integrated
while
retaining
overall
flexibility
IntegraFon
Modularity

16. Growth
is
Possible
via
Successful
CRM
• Currently
the
3
major
video
outlets
are
in
different
segments
• Customer
InFmacy
has
the
most
growth
potenFal
• Based
on
anributes,
able
to
anract
customers
in
CI
and
PL
categories
Performance
Price

17. Competitive Landscape!
Detailed
analysis
and
how
three
direct
compeFtors
can
impact
HappyKids!
overall
success

18. Redbox
Disrupts
the
Movie
Rental
Business
with
a
Southwest
Anack
Redbox’s
Low
End
Delighters
• No
membership
required
• Last
minute
rentals
of
latest
new
releases
• Return
DVD
to
any
Redbox
kiosk
locaFon
• Low
Cost
compared
to
Blockbuster
• Convenience
and
proximity
(68%
of
populaFon
within
5
minutes
of
a
kiosk)
External
Factors
(Porters
5
Forces)
• Customers
are
over-­‐served
by
services
of
BB
and
Nemlix
• Recession
in
late
2000’s
caused
need
for
lower
cost
rentals
• Customers
willing
to
accept
lower
performance
(less
movie
>tles)
for
greater
convenience
(store-­‐front
kiosks)
Strategy
Lane:
Redbox’s
Cri,cal
Success
Factors
• Partnerships-­‐wide-­‐ranging
agreements
with
McDonalds
and
retailers
Walmart,
Walgreens,
Albertsons
and
7-­‐Eleven
• Technology
to
Scale-­‐kiosk
approximately
$15k
to
install
• Vision
and
Innova,on-­‐Took
advantage
of
recession
and
kiosk
boom,
for
customers
seeking
convenient
last
minute
rentals
• Execu,on-­‐within
3
years
Redbox
had
surpassed
Blockbuster
in
number
of
locaFons

19. Redbox’s
Business
Model
Lower Cost
Last Minute
Rentals
At Low Cost
Tailoring
DVDS
for Specific
Areas
To Obtain
Reliability
Service with
No Hassle
Better Value
Relative to
In-store Rentals
Target the Budget
Conscious
Movie Renter
Focus on
Strategic
Partnerships
(Revenue sharing with
retailers 15%)
Access to a Large
Amount of Consumers
(68% of people live within 5
min drive of kiosk)
Return
Rentals
At any
Kiosk
Location
Create
Foot
Traffic
for
Retailers
Send Teams
To Purchase
Movies
At Retailers
To Supply
Kiosks
Relocate
kiosks to
more
profitable
locations
Sign Wide
Ranging
Installation
Agreement
Movies
Available
For Sale
$7
No
Membership
Required
Kiosks in
Top
Retailers:
WMT,WAG,
MCD,7-11
Albertsons
Automated
Kiosks
Direct
Sales
From All
Hollywood
Studios
New
Releases
Available
Same Day
As Retail
Stores
Increase Utilization
Of Kiosks
(Average Daily Rental
49.1 a day)
Immediate usage
for consumer
Continue to
Increase DVD
Rental Share
(As of 2010, 25%
Streaming away from DVDS)
Provide Current
Movies
(200 newest titles
630 disks per kiosk)
Online
Streaming
with
4 Video
credits/mo
Verizon
Joint
Venture
Located
in High
Traffic 24/7
Locations
Rigorous
Data
Analytics
Video
Game &
Blue Ray
Rentals
Sold
used
DVDs
Much
Quicker
Than BB
Increased
Convenience
to Consumers

20. Nemlix
has
NE
MigraFon
&
Adjacency
Moves
• Consistent
NE
MigraFon
with
Adjacency
moves
– IntroducFon
of
Streaming,
Global
Expansion,
Original
Content
&
Series
• Resources:
SophisFcated
algorithm
helps
the
company
decide
what
content
to
invest
in,
leadership
that
is
constantly
innovaFng,
great
brand,
high
number
of
streaming
customers
• Ac,vi,es:
Streams
new
content
online
through
its
own
plamorm,
recommends
original
content
to
Nemlix
members
• Values:
Only
shown
through
streaming
&
those
subscribers
make
up
80%
of
their
total
number
of
subscribers,
spent
the
same
amount
on
“cards”
as
it
would
have
on
an
exclusive
streaming
deal
with
an
outside
studio

21. High
Performance
Delivery
Access to both
DVD rentals and
Streaming
Unlimited
monthly
rentals with
no late fees
Sophisticated,
Navigateable
website
Low Cost,
Subscription
Based Model
Access to a
Wide
Selection,
Large Variety
of Titles
Ultimate online
destination for
movie enthusiasts
Personalized
Recommendation
& rating system
Copyright
©
2007
Zafar
Iqbal
Wide selection of titles
(more that 100,000 DVD titles)
Personalized database and
Recommendations
(3 bil + member ratings,
60% member selected moves
on recommendations)
Integrating
service into a
growing # of
devices
(ex: game
consoles)
Match
customers
with new
& obscure
films
Personalized
member
pages
Titles reaching
customers
quickly
Highly
automated /
rapid
processing
Create
Original
Programming
Easy for
customers
to return
Sophisticated
systems
to track
customer’s
queues &
inventory
Partnerships
with
distributors,
Sony /
Microsoft
and
Hollywood
Streaming
Capabilities
Online
platform for
ordering /
searching /
queue
Agreements
with USPS
CineMatch /
proprietary
rating system
R& D on
what people
watch,
nventing &
fine tuning
algorithms
Original &
On Demand
Content
High
switching
costs
No pressure
of Late Fees,
Unlimited Viewing
Quick delivery
(95% of customers
received DVDs in 1 day)
Long Tail Selection
(70% of DVDs shipped were
titles released older
than 13 weeks)
60 regional
distribution
centers
Nemlix’s
Business
Model

22. Blockbuster
has
had
Bad
Responses
to
DisrupFons
• Poor
response
to
previous
disrupFon
– Result:
Large
market
share
stolen
– Forced
eliminaFon
of
many
‘physical’
locaFons
– Anack
Blockbuster
in
Customer
InFmacy
– Bankruptcy
–
not
posiFoned
well
to
defend
their
space
– Not
personal
enough
– No
kid
focus
–
carve
out
a
niche

23. Blockbuster’s
Business
Model
Affordable
Price
Multi-channel
Presence (store,
online, mail, kiosk)
Focus on
increasing
USA
presence
Customer
Service
Wide
Selection
Reliable
Service
Increased Sales
Versatile Website
(5 ways to get
movies)
Local
Connections
(Approximately
500 stores)
Have a
wide array
of movies
and
games
Leverage
name,
image
and
brand
Sustain
only
Profitable
stores
Capable
to review,
order,
purchase
videos
online
High costs
to cover
old
business
model
Connect
with
customers
Megastores
and
standard
stores
Sell used
DVDs
Rent
DVDs,
VHS, and
Games
Good Brand
Awareness
Blockbuster.
com
No late
fees
“Rent it,
Like it, Buy
it”
promotion
Clean
family-
friendly
environment
Remain
current with
consumer
preferences
Broad Presence
Each Store
(Average store
had 6,000 units )
Efficient Pricing
($3.50 pricing)
Global
Footprint
Customer
Loyalty

24. Final Analysis!
Highlights
potenFal
weaknesses
and
provides
confirmaFon
that
HappyKids!
will
be
successful

25. Weaknesses
of
HappyKids!
can
be
Overcome
• StarFng
out
with
less
content
• Establishing
&
maintaining
relaFonships
• Start
up
in
a
compeFFve
market
• DifferenFaFng
ourselves
from
other
children’s
networks
• Building
a
brand
-­‐
CreaFng
customer
awareness
from
scratch

26. HappyKids!
has
an
EffecFve
Blocking
Strategy
• Become
InFmately
Involved
with
the
Customer
– Create
a
Community
&
History
of
RecommendaFons
• Creates
high
switching
costs
– Gain
visibility
in
community
(partner
with
schools,
sponsor
community
events)
• Launch
Loyalty
Program
• Create
IncenFves
for
Referrals

27. Closing
Thoughts
• Specialist
company
taking
slice
of
business
from
Nemlix
and
Blockbuster
• Lower
subscripFon
cost
than
NFLX
and
BB
for
over-­‐served
customers
• SaFsfying
the
‘Job
to
be
Done’
of
keeping
children
entertained
&
happy
• Focus
iniFally
on
limited
content
through
strategic
partnerships
• Seize
upon
conFnuing
trend
away
from
DVDS
to
streaming
&
downloads
• Heavy
focus
on
developing
a
strong
online
brand
community

28. Looking for Angel Investors to
make this crying stop!
Invest
in
us
to
help
get
HappyKids! off
the
ground
and
stop
kids
from
crying
everywhere!!!

29. You’ve got Questions?
If
so,
HappyKids!
has
answers!!!

30. References
• Consumer
CharacterisFcs
– hnp://www.hiebing.com/wp-­‐content/uploads/2009/10/4_EmoConnecFon.pdf
– hnp://nces.ed.gov/programs/digest/d10/tables/dt10_024.asp
• Redbox
– Verizon
to
set
up
streaming
service
with
Redbox:
Associated
Press
2/5/12
Peter
Svensson
– Redbox
Instant
vs.
Nemlix:
newsnet5.com
3/31/13
John
Matarese
– How
Redbox
Instant
Will
Take
on
Nemlix
AdAge|Digital
04/4/2013
Jeanine
Poggi
– Movie
Rental
Business:
Blockbuster,
Nemlix,
and
Redbox:
02/08/2012
Sunil
Chopra
– Wall
Street
uncertain
about
Redbox:
L.A.
BIZ
04/30/2013
Gina
Hall
– Lessons
from
a
Dying
Business:
Inc.
12/13/2011
Karl
Stark
and
Bill
Stewart
• Nemlix
– Chopra,
Sunil
(2012).
Movie
Rental
Business:
Blockbuster,
NeHlix,
&
Redbox.
Kellogg
School
of
Management.
– Wesley,
David
(2012).
NeHlix
Inc.:
Streaming
Away
from
DVDs.
Richard
Ivy
School
of
Business.
• Blockbuster
– Coughlan
Peter
(2004).
Blockbuster
Inc
&
Technological
Subs>tu>on
(B):
Confron>ng
New
Digital
Formats.
Harvard
Business
School
• Overall
Industry
– hnp://www.newmediatrendwatch.com/markets-­‐by-­‐country/17-­‐usa/855-­‐mobile-­‐devices