Tradeoffs

How Netflix is making the wrong tradeoffs in the streaming market

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As one of the most popular and longest-running streaming services in the market, Netflix took a DVD rental service and transformed it into a cultural icon. We’ll show you how their relentless focus on quality content positioned the platform for impressive growth and how that has to change as the market evolves and expands.


The Tradeoffs

  • Netflix’s content-first strategy shifted focus away from other potential revenue streams such as merchandising and live events.
  • Choosing not to run ads on their platform means Netflix has to rely solely on subscriptions for their recurring revenue, which drives their price into the upper ranges of willingness to pay.
  • By allowing shared logins, Netflix runs into an issue with personalization. Their recommendations can only be specific when customers choose to create separate logins for each family member.


    •      This is a ProfitWell Recur production—the first media network dedicated entirely to the SaaS and subscription space. 

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