Updated: Jul 24
Netflix started in 1997 as a small DVD rental store. Since then the company is tweaking its offering consistently. The concepts of flat fees and unlimited rentals have revolutionized its modus operandi. It has now become the world’s leading international streaming company. It has 80.5 million subscribers across the world. 35 million of these watch Netflix internationally. It has not been an easy ride and it took almost 8 years to become profitable for the company.
Netflix adopted the subscription model and did away with the original business model. It led the company to growth and profitability. The fact that subscribers could watch their favorite movie whenever it suited them and as many times with no deadline was the catalyst. It changed the very course of the movie rental business.
Change doesn’t happen overnight. It rarely does. It’s not an exaggeration that Video on Demand through a subscription model is the driving source of revenue and the leading change agent in the television, movie, and entertainment business. But it is not without some challenges. The limitations to Netflix’s international ambition are Copyright, and local laws blocking certain content in some areas. The downside is not all content is allowed in every location.
Throughout its journey, Netflix has partnered with many like-minded and synergic businesses. MGM, Lionsgate, Paramount, and Starz have all been tied up for exclusive access to movies not available elsewhere. This has given rise to intense competition for content and has led to the birth of original programming.
The concept of exclusive content that Netflix started by buying, and then developing its original programming has been a game-changer for the company. Though criticized initially, Netflix has proven its ability to create its shows cheaper and then in delivering them in a way that meets viewer demands.
In providing unlimited access to its subscribers Netflix takes it to the very extreme. All of its library is available to most of its members. And to top it all, the platform works on every device in the market today.
The main benefit of the subscription-led model is the no commercial approach. Since Netflix doesn’t depend on ads for operation, it saves money by not needing ad sales vertical and viewers gain the benefit of a commercial-free experience.
Netflix is forever on the hunt for compelling content and usually contracts it for an entire season. It does away with the pilot process tradition and relies on its data while anticipating the drive for more viewership.
There has been a fundamental shift in how the content is created and delivered and finally consumed. Its trickle-down effect is forcing other industries to change as well. Compared to a few years ago, every source of media has a website streaming its content these days.
There is no denying the fact that Netflix is changing the world in more ways than one. Its ad-free viewing experience has brought a new zeal to watching TV. In a fastly changing technological realm, it is difficult to predict the future but even if disruption happens, Netflix, at the time of writing this, is standing on solid foundational values with a bright future in sight. And whichever take the industry takes consumers stand to benefit. TV watching is getting cheaper convenient, cheaper, and easily available.