Netflix Model for Shift to Digital

August 1, 2011 on 8:44 am | In Build, IdBlog, Tools | Add a Comment

Netflix’s recent move to shift subscribers from DVDs by mail to streaming over the net holds some valuable lessons for the newspaper business, argues Ken Doctor, the author of Newsonomics. By making streaming roughly half the cost of DVDs by mail, Netflix is moving their customers to where the company needs them to be, Doctor writes in The Newsonomics of Netflix and the Digital Shift.

“Imagine 2020,”  Doctor writes,  “and the always-out-there-question: Will we still have print newspapers? Well, maybe, but imagine how much they’ll cost — $3 for a local daily? — and consumers will compare that to the ‘cheap’ tablet pricing, and decide, just as they doing now are with Netflix, which product to take and which to let go.”

Of course, Netflix doesn’t have to contend with the huge revenue gap between print advertising and digital advertising as newspapers do. All that is still TBD, Doctor writes, but Netflix may point the way.

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