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Netflix and Consumer Behavior Trends

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Netflix and Consumer Behavior Trends
Netflix, Inc. is a subscription-based movie and television show rental service that offers media to it’s subscribers through on-demand internet streaming and DVD-by-mail service. Since its start in 1997, Netflix has taken the movie rental world by storm, becoming the world's largest online movie rental service. As of January 2013 Netflix had a total of 29.4 million streaming customers worldwide (Cohan). Netflix can attribute much of its success to its decisions to follow trends in consumer behavior, while its major competitors, namely blockbuster, sealed their fate by ignoring them.
In the following paper I will tell you how Netflix was able to stay afloat while other movie rental companies failed, and gained success by following trends in consumer behavior.

Background
Netflix was founded in 1997 by Marc Randolph and Reed Hastings. Hastings had the idea for the DVD-by-mail service when he was forced to pay $40 in late fees after returning an overdue video. The company began its operation in April of 1998, with its core business being DVD-by-mail rental service. Besides being one of the first companies to rent DVDs by mail, Netflix also planned to capitalize on the fact that major brick and mortar video stores, such as Blockbuster, did not carry a wide selection of DVD rentals at the time. Netflix experienced much success with DVD-by-mail rentals, hitting the one million subscribers mark in February of 2003, and shipping over 1,000,000 DVDs by mail per day by 2005. In 2007 Netflix introduced it’s Video on Demand Service. This service was extremely successful, eventually making Netflix the number one online video streaming service in the world. (Netflix, Inc. History)

Consumer Behavior Trends Towards Entertainment There are several key trends in consumer behavior towards entertainment that Netflix was able to capitalize on. The first consumer behavior trend is convenience. The fast paced world that we live in has the average consumer seeking out


Cited: Blodget, Henry. "Actually, The US Smartphone Revolution Has Entered The Late Innings." Business Insider. N.p., 13 Sept. 2012. Web. 01 Apr. 2013. Cohan, Peter. "Why Blockbuster Went Bust While Netflix Flourished." DailyFinance.com. N.p., 23 Sept. 2010. Web. 01 Apr. 2013. Forbes Magazine, 03 Jan. 2013. Web. 01 Apr. 2013. http://www.forbes.com/sites/deancrutchfield/2013/01/03/4-consumer-trends-that-will-drive-marketing-growth-in-2013/ Kang, Cecilia "Netflix, Inc. History." FundingUniverse. N.p., 2012. Web. 01 Apr. 2013. . Stelter, Brian. "A Resurgent Netflix Beats Projections, Even Its Own." The New York Times. N.p., 23 Jan. 2013. Web. 01 Apr. 2013. http://mediadecoder.blogs.nytimes.com/2013/01/23/netflix-adds-subscribers-posts-quarterly-profit/
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