Netflix as a Model: How Innovative Business Owners Are Cashing in on Netflix-Style Success

Watching trends in consumerism is important for businesses of every type. Looking at what is today's "luxury" points to what tomorrow's "necessity" will be. And while we continue to operate from offices, storefronts, and warehouses, the Internet has become an integral part of how we do business - because consumerism demands it.

In recent years, there has been a very real trend that affects Internet-operating businesses most strongly: the Netflix model. Start-ups that tweak the Netflix model, the rent-not-buy concept, in innovative ways are reaping huge rewards - and they're doing it with very little overhead.

What is the Netflix Model?

When Netflix began their service, it was a stroke of genius. Regardless of where things might lead, as a business model Netflix revolutionized the way we rent movies - and movie rental services had to scramble to compete by mirroring that model.

The true genius behind the Netflix Model is the way it plays into the way customers view goods. More and more, we're becoming a society that practically worships the temporary. If we can spend less but still have the feel-good associations of a luxury item, we'll take it. If that luxuy item is a temporary thing, which we don't have to update or maintain, we're even happier. Using the Netflix model, a customer gets just that - a product that doesn't take up a large part of their budget, that they don't have to mess with, and when they're bored with it they can get a new product without any hassle.

Broken down, the Netflix Model looks something like this:

PRODUCT
Membership Levels
Rentals based on levels
Exchange product as little or often as needed

Beginning at the top, using the Netflix model would begin with focusing on a very specific type of product. Movies, games, designer handbags, baby clothing, baby toys, fine kitchen items, even luxury cars all work with the model. The product must be luxury in some way - in other words, it should be something that the average person either couldn't afford to purchase outright, or couldn't afford to purchase as many as they'll be able to rent and experience.