Business Model Pivot

Editor's Note

Hello from London!

I enjoy watching the transitions of business models that companies have to move towards to maintain growth and stay alive. Netflix suffered from bad results in the first quarter of the year. (down 200k subscribers vs expected growth of 2.5M). Netflix said that the pandemic "clouded the picture by significantly increasing our growth in 2020, leading us to believe that most of our slowing growth in 2021 was due to the Covid pull forward." It appears that with such stagnation, Netflix may need to move to advertising as an option. While that might seem like a step back, it also might open up growth prospects allowing choice - and a way to attract those who can't afford Netflix, many of whom are sharing passwords.

What might happen in the future - as self-driving cars take off - are movies or Netflix becoming part of the transport service ecosystem. I know this sounds crazy but - hypothesize with me for a minute:

If the tech lives up to its promise, it should be. A good implementation of a level 3 or level 4 self-driving car – one that expects drivers to take over occasionally – will also take into account the fact that drivers are naturally poor at monitoring the operation of a machine they do not need to control. This is known as the “paradox of automation”: the more efficient an automated system, the more crucial the human contribution when they’re required.

Could we be transported between two locations by an Uber self-driving car service, funded by a Netflix partnership itself part funded by advertising? I agree - this does sound idealistic and ridiculous - but my point is that business models will emerge as structures change. Netflix might be moving to a new model that will allow choice - but how will choice evolve in new areas? Metaverse advertising cookie tracking? Subscribing to Spotify and getting unlimited coffee? Who knows? Netflix has grown to a monster - but now looks to have to make a pivot to a model it never really wanted to dabble with.

Stay Curious,

Onward! - Rahim

PS. Be Danish. Get Happy.

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