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The Netflix Model

The Netflix Model

The Netflix Model

Netflix has really taken over the movie and television entertainment experience.

Market research from Blockbuster showed that people liked seeing the back of VHS’s and DVD’s – I know I did. But the real reason why Netflix won was because of their unbeatable price. $7.99/ month (now, they’ll go up to $10.99). So cheap for dozens (and now, hundreds of movies and television shows). Regardless of convenience, Blockbuster couldn’t compete on price.

Think of models for your business where you can offer a lot of bundle for a low price, at least as an entry level offer. Add in a subscription model to it and you’re golden.

Sumo Briefcase did a very good job with this. Noah Kagan sought after all kinds of business applications and offers them as a bundle for around $40 per month. This is a great value for not much money. Try to make things as enticing for people as possible to join. If it’s a subscription model, you’ll get recurring revenue and if there’s a lot of value there, odds are they won’t cancel even if they don’t use it much.

iTunes took the idea of music and allowed you to buy singles for $0.99.

I know I hated buying the album for $13.99 or $19.99 in some cases when I only listened to one song. They found a way by negotiating with the music industry.

Think outside the box. Partner up with people who have what you want.
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