Netflix has revolutionized the way we watch movies and series and defeat one of the biggest

companies in the process, Blockbuster. When they started, they bet on DVDs and send them by mail
instead having a physical stores and years later jumped into a website being able to expand their
objective market. This is why Netflix is a study case really interesting that teach us how a company
take can advantages of new technology and innovate over time.

One of the main advantages of Netflix is the flexibility. Initially, you could choose from more than
100 000 DVDs and receive your selection by mail. This was more practical for costumers and for
the company and became in their principal competitive advantage. But times changed and Netflix
also did the same. Now, all is simpler: You pay a monthly membership and watch what you want of
their extensive catalog in any device with internet connection.

Another advantage is their variety. The absence of physical stores allows Netflix to have more titles
in their catalogs and earn more profits. The effect of Long tail applies here. Most popular products
sells more but a good percentage of the profits are from the less popular ones. For example, Music
service Rhapsody makes more money from songs outside of the top 10 000 than it does from songs
ranked 10,000 and above, 60% of the books sold in Amazon aren’t available in big book stores and
two thirds of the DVD that Netflix shipped were back-catalog titles. Even more, Netflix takes
advantage from this tail offering movies for an specific public, like Bollywood cinema.

Finally, one of their main innovations is their recommendation system called Cinematch. This
system learns from the feedback from costumers and create profiles. In this way, based on what
movies and series you like or dislike, Cinematch knows what to offer you based on other profile
preferences. This make costumers have always something to see according their preferences making
them happy and recommending the platform to other people.

To sum up, Netflix is always adapting to new technologies and strategies. Flexibility, variety and
good recommendation system are some of their competitive advantages that make them a 21 st
century company that in 20 years dominated their market.