Conclusion

In conclusion, Netflix has been extremely successful in maturing and developing to adapt to the changing needs of customers over time. While their original DVD-by-mail business model was effective against competitors such as Blockbuster, the rise of internet streaming’s popularity meant they had to adjust. The comparison to Blockbuster is important, as they were a company that failed to adapt and didn’t foresee the impact the internet would have on the movie rental industry (Kellmurray, n.d.) Netflix was then able to gain customer loyalty by providing things Blockbuster didn’t, such as no late fees and only needing to go to the mailbox to get the DVD (Kellmurray, n.d). When the popularity of online streaming grew, Netflix embraced the change and used it to their advantage to become the company they are today.

The long tail theory has been one of the most important factors for the success of Netflix. Their ability to provide significantly more content than any physical DVD rental store has allowed them the continuously gain customers. By being a purely internet based service, Netflix has benefited from e-commerce advantages such as reduced costs and the expansion of the marketplace. In 2015, 10 billion hours a month were spent watching Netflix (Smith, 2015). This shows that it has been effective in the attention economy despite the number of competitors and other options providing the same or similar material. It can therefore be concluded that by optimising things such as the long tail, the subscription business model and network effects, Netflix has developed over time to become a successful and attention gaining business in the attention economy.

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