In a digital economy, the process of production, distribution and consumption takes place (mostly) online (pg 194, Flew 2008). As in the case with Netflix, production of content takes place offline, while distribution and consumption take place online. Of course this is very different to the beginnings of Netflix, which distributed DVDs by post, and were consumed by viewers on DVD players – a completely offline process. Being completely online now, Netflix can overcome geographic issues and expand its market (pg 200, Flew 2008). Costs of distribution and consumption are also greatly lessened for the company (pg 200, Flew 2008). Named by Brynjolfsson and Kahin as the “driver of economic growth” (pg 1, 2002), the digital economy increases efficiency, and in the case of Netflix, allows the business to focus on producing great content and maximizing profits.
Continue reading: Network Economy
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