5 Business Lessons From The Netflix Business Model

netflix business model lessons

Despite its recent woes, Netflix remains the most iconic streaming service in the popular conscious. Once started as a tiny startup (and mocked at the time), it has risen to be a multi-billion dollar company. It is still one of the hottest businesses in the world. And where business success stories happen, valuable lessons follow.

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Here are 5 key lessons all of us can take from Netflix’s current business model.

5 Lessons From The Netflix Streaming Business Model

1. Being A Trendsetter

Staying ahead of new competitors and on top of trends is one of the most important lessons any business can learn. Starting as a DVD rental company, Netflix has managed to weather the changes in the entertainment landscape through the widespread adoption of both subscription models and then online streaming. A vital part of this adaptability comes through them setting trends rather than following them- in fact, Netflix is widely credited as the inventor of ‘binge watching,’ watching a series in bulk instead of sticking to the weekly episodic format. And not to mention the now ubiquitous phrase ‘Netflix and Chill’! While many of us would love a chance to delete Netflix history, so no one knows what low-quality shows we like to kick back and relax with, you can’t deny the powerful pull of a brand name they have built from the ground up.

2. Capitalizing On Disruption And Opportunity

If your competition is comfortable, they can encroach on your business. Netflix, for example, threw a spoke in the wheel of Blockbuster’s success by making it easier and more convenient to access the (then) top-of-the-line DVD rentals, ditching VHS entirely. In short, they did something the competitor could have done but didn’t have the nerve to do. We likewise see this embracing of opportunity in their move into in-house production. After all, they needed the content; why not bring it onboard themselves?

3. Focus On Experience

Until very recently, Netflix has been offering ‘consumer comforts’ we don’t see among competitors, like the keen ability to allow account sharing. They have launched data tracking users’ previous watching habits to recommend choices of interest to the viewer. They save progress within shows so users can instantly bounce back to where they were. In short, the customer experience has been a critical cornerstone of the Netflix business model. As they have moved into new global markets, they have tailored content and experience to suit local demographics. Additionally, we see them set their pricing at a monthly flat-fee long before streaming subscription models were a reality in the industry. In short, they gave people what they wanted and kept user experience at the center of their operational model.

4. The Power Of Far-Reaching Data

Not that Netflix has done all this just for us! They also use the data provided to them by customer behavior and feedback to better tailor their services to a shifting and rapidly-evolving market. They have ensured that they can always give the user what they want by having the data on hand to know what that is and paying attention to it.

5. Constant Evolution

Last but certainly not least, they have kept themselves at the pinnacle of adaption through the streaming industry. As smart TVs become the norm, Netflix was expanding platform access. As people needed affordable entertainment in the 2008 recession, they offered a model that provided that. They started in a form that is now forgotten by many users in an industry in desperate need of reform. They have kept themselves relevant through ceaseless willingness to change their business model to suit people’s wants and needs.


With these 5 fundamental business principles in place, Netflix has made itself a globe-dominating power in the streaming industry. By paying attention to its business model lessons, you can do the same for your business success for years or decades to come.