The Evolution of Netflix's Business Model

Netflix originally started by challenging the video rental model established by Blockbuster, promoting its subscription service that eliminated late fees. This innovative move made the company appealing by allowing users to keep DVDs for as long as they wanted, fostering a new rental culture. Despite claiming its original model was a response to a negative personal experience with Blockbuster, the reality was that Netflix built upon a more expansive strategy that leveraged new DVD technology and e-commerce. The shift from DVD rentals to streaming was a strategic method of expanding their audience and market reach while capitalizing on growing internet infrastructure.