The Evolution of the Netflix Revenue Model

Digital media’s rising popularity exposed a weakness in brick and mortar distribution companies like Blockbuster. Blockbuster lacked the convenience a digital distribution model offered and did away with the exorbitant late fees video rental businesses relentlessly imposed on the consumer.

From: Negotiations in the Entertainment Industry

By: Marjorie DeHey, JD/MBA

For over 15 years, Ms. DeHey has held high-level positions in marketing, business development and corporate strategy for a number of small and large companies, including MGM Studios, the Miss Universe organization, MEF (formerly the Mobile Entertainment Forum), MediaMojos, the Irish government, and LexisNexis.

Ms. DeHey has been named one of “The 25 Women to Watch” by Mobile Marketer Magazine (…) and was recently inducted in the Academy of Television Arts & Sciences.

In the CLE class clip, Ms. DeHey discusses The Evolution of the Netflix Revenue Model.

Netflix took advantage of the evolving technology and began to offer the consumer a broader set of products than could be normally offered by companies like Blockbuster. According to Sandvine in 2013, Netflix was the biggest source of North American downstream web traffic, at an amazing 32% of the market. Aggregate traffic consisted of 28.8% market share. Netflix didn’t stop there.

Netflix, not letting go of their competitive edge, quickly evolved into content creators, with award-winning programs only available on their service. This move gave Netflix a greater ability to negotiate better terms with licensors.

For more on The Evolution of the Netflix Revenue Model, by Ms. DeHey, check out the full CLE video clip by