Excerpts from an article by Daniel B. Kline in Madison.com
Netflix has grown from a humble DVD-delivery service into a product that has changed how first Americans, then the world, consume content. The company has done something many successful businesses have failed to do. It transformed itself, moving away from a successful business model to one that had significant risks.
Netflix could have easily met the same fate as Blockbuster Video, a company it first disrupted, then helped put out of business. Had the streaming leader clung to its DVD-delivery model, it would either no longer exist, or it would be a small, niche player sending hard-to-find films to enthusiasts.
Instead, by pivoting its business to streaming, and then taking the further risk of committing billions to original content, Netflix has grown to just-under 99 million total subscribers and 94.36 paid memberships at the close of its first quarter of 2017.
A growing library of originals
By creating original programs, Netflix builds its asset library. As time passes and Netflix grows its library of originals, it becomes more appealing to non-subscribers.The company is building a programming library that increases its appeal while also making it hard for anyone else to compete.
Netflix still has more than half of its subscribers in the U.S. Going forward, the streaming service, which is available in nearly 200 countries, should be able to continue to rapidly grow across the world.
A strong base for the future
Netflix has created a global business with a strong library of assets. It has disrupted the traditional cable model and made itself a good value to existing customers that becomes ever more valuable to potential new subscribers.
Going forward, it’s hard to see what rival content providers can do to compete.
Read the full article on Madison.com
And download Zuora’s Blueprint for a Subscriber-Centric OTT Video Business