People tend to view Netflix as a digital native, whereas in truth, its present business model is simply its third avatar. Netflix started off as a DVD rental, moved on to being a platform to stream movies, and is now an entertainment industry leader through its original content. It created content suing customer insights gleaned from the enormous bits of data warehousing done over the years on people’s usage patterns. Across all these three business models Netflix has dabbled in and been successful, the common thread has been its customer-first approach. Blockbuster was Netflix’s biggest rival early on, but completely folded about eight years back. A lot of companies are cursed by their early success in a different model. This is because older, legacy-businesses tend to be asset-heavy. Over time, with reduced cash flows, a lot of these heavy assets appear like liabilities. Unlike Spotify or Airbnb which were born in the digital era, and had little hesitation in adopting a modern outlook, many of the older firms have become dinosaurs. A parallel to Netflix would be Dominos who too have leapfrogged above competitors using technology-enabled customer-centric servicing.

Source:http://www.bain.com/publications/articles/reinventing-your-business-model-for-digital.aspx

Uploaded Date:15 June 2018