Netflix Business Model | Business Model Navigator

Overview:

Netflix is an American media services provider headquartered in Los Gatos, California, founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California. The company's primary business is its subscription-based streaming media service which offers online streaming of a library of films and television programs, including those produced in-house. As of October 2018, Netflix has 137 million total subscribers worldwide, including 58.46 million in the United States. It is available worldwide except in Mainland China, Syria, North Korea, and Crimea. The company also has offices in the Netherlands, Brazil, India, Japan, and South Korea.

Industries:

Information Technology

Entertainment

Similar firms (based on pattern co-occurrence):

2 shared patterns

5 shared patterns

4 shared patterns

2 shared patterns

4 shared patterns

2 shared patterns

3 shared patterns

2 shared patterns

5 shared patterns

2 shared patterns

3 shared patterns

2 shared patterns

3 shared patterns

5 shared patterns

Business Model Patterns:

Cash Machine

How they do it: Netflix’ subscription customers pay their monthly fee upfront. This give the company increased liquidity to operate their business and acquire additional users.

Digitization

How they do it: Netflix started out as a DVD rental service, realizing however that the consumption of digital content was growing. Hence it launched its online subscription service bringing the content to everyones home through the internet without needing physical storage such as DVDs anymore.

Flat Rate

How they do it: Netflix’s customers pay a monthly subscription fee, allowing users to consume an unlimited amount of content on the platform.

Guaranteed Availability

How they do it: Netflix’s offering is available 24/7 due to its digital nature, allowing it to scale its userbase rapidly.

Integrator

How they do it: Netflix’s core offering is providing the infrastructure and user interface for customers to watch content on the platform. The content in form of movies, shows etc. is usually not produced by Netflix (although they started producing their own shows and movies as well). As such Netflix can focus on the technical site of their platform as well as on user acquisition and license content from rights owners.

Long Tail

How they do it: Netflix offers a wide variety of content on its platform. This allows the company to target a broad audience as it is easy to make all the content available and let the user chose what to watch. This also includes niche content.

Mass Customization

How they do it: Through their broad choice of content, every user can customize its individual user experience on the Netflix website. Customers get displayed individual recommendations based on the content they watch.

Rent Instead Of Buy

How they do it: Initially Netflix started with a DVD rental by mail, allowing customers to order DVDs to their home. In 2007 they introduced the streaming platform which is now the core offering of the company.

Subscription

How they do it: Netflix streaming service operates on a monthly subscription model. There are various options and the price is determined by the amount of how many screens can be used to stream in parallel.

Learn from this company and apply the same patterns to create your own successful business model!

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